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Hospitals facing a financial tsunami will need new solutions to improve inefficiencies and detect drug diversion events

Hospitals facing a financial tsunami will need new solutions to improve inefficiencies and detect drug diversion events

By Charles D’Amato, RPh

The cost of staffing up

Few predicted the financial tsunami that hospitals are facing today. Hospital CEOs say multiple factors are impacting their ability to generate revenues. Confronted with the pandemic, facilities rapidly expanded to meet the unprecedented demand for patient care. They hired retired providers, newly graduated (or soon to graduate) medical and nursing students, and other essential workers. They quickly turned to private staffing agencies for clinical staff and to neighboring communities for volunteers. Unfortunately, these proactive steps were costing hospitals hundreds of thousands of dollars in recruitment fees, salaries, and supplies.

Add to this pressure the importance of providing all staff with the necessary supplies to stay safe. Initially when supplies were scarce, hospitals contacted alternative sources for their personal protective equipment (PPE). The Texas Medical Association reported that in 2020, the cost of one N95 mask quickly skyrocketed in price by as much as 800%. Multiply that by thousands of products and the cost becomes staggering.  

The loss of elective procedures


With elective procedures suspended, hospitals suddenly found themselves struggling. In a four-month period from March to June 2020, facilities have reported an estimated loss of $161.4 billion, according to the American Hospital Association (AHA). The AHA cites that approximately 90% of hospitals may already be experiencing negative profit margins — all thanks to COVID-19. At least 47 hospitals in the U.S. have already filed for bankruptcy, as reported in Becker’s Hospital Review.

The rise of drug diversion

In the midst of pandemic chaos, mental health experts began sounding the alarm. The long hours and the number of patient deaths have taken a toll on staff mental health. The CDC has reported a rise in mental health disorders and substance abuse. Millennium Health, a drug testing laboratory, conducted an analysis of more than 500,000 drug test results and found the use of four drugs — fentanyl, methamphetamine, cocaine, and heroin — had significantly increased.


Unfortunately, the heroic steps that hospitals took to handle the growing crisis also led to a rise in opportunities to divert drugs. 

For example, background checks were delayed or didn’t occur, so facilities may not have been aware of individuals who had been discharged for diverting drugs at other locations. With a reduced number of staff, monitoring nursing personnel — especially when entering patient rooms to administer and dispose of clinical waste — has fallen to the wayside.


While the pandemic has exacerbated the inefficiencies, it also has provided an environment ripe for drug diversion. An example? The growing number of medical discrepancies that are now surfacing.

Medication discrepancies, in general, could be attributed to simple errors, such as inadequate training, the rush to administer medications at the end of a shift, and poor compliance. However, they could also be clues to potential drug diversion, such as:

• Unopened medications that were not documented as being returned to the pharmacy

• Opened and leftover substances that had not been documented as being discarded

• Delays in wasting

These forms of medication discrepancies have started to increase, hinting at something more ominous. 

Not surprisingly, medications related to the treatment of COVID-19 may be the new targets of drug diversion. According to Premier, Inc., a large purchasing group for 4,000 hospitals in the US, there was a 300% week-over-week increase in orders of drugs used for treating COVID-19. While these products were not normally the preferred medications for drug diversion before the pandemic, they are now more likely to be taken, especially when supplies run low.

A medical center in West Carson, Calif. charged a pharmacy technician with the theft of more than 700 hydroxychloroquine tablets, azithromycin, morphine, PPEs, and other items. In Indianapolis, two women stole morphine, PPEs, and sanitizers. The city’s police department reported that they had planned to sell the items online.

A decision to install or update drug diversion prevention programs

Given the chaos that hospitals are experiencing, hospitals would seemingly want to delay any investment in a new drug diversion (DD) prevention platform until after the turmoil has subsided because of cost.

On the contrary, it may be prudent to implement a DD program now. Its use would slow the downward spiral that hospitals are experiencing; recapture revenues lost by reducing discrepancies and improving efficiencies; and identify potential diverters before a crime or patient harm occurs.

Proactively installing an effective, comprehensive DD prevention program would also be less expensive than the cost of a federal fine. McLaren Health Care Corporation agreed to pay the federal government $7.75 million — the largest in US history — for alleged violations of the Controlled Substances Act. The health system, which has more than a dozen hospitals across Michigan, is now taking steps to rebuild its reputation. 

To survive in this new era financially, facilities need a platform that has the capability to:

• Identify opportunities for improving costly inefficiencies 

• Correct all false positives and negatives — including administration, wasting and documentation of transactions involving multiple administrators

• Protect hospital staff and patients from harm caused by impaired employees

Reduce the risk of giving drug diverters new opportunities by tracking, monitoring and predicting their behavior. 


MAAP Analytics® as a solution

MAAP Analytics was designed and built based on clinical workflow. The acronym MAAP stands for Medication Administration Analysis Program.  

MAAP Analytics is different from current products in the marketplace. It offers a multi- dimensional approach, applying machine learning to harmonize data and enable facilities to find and predict occurrences of drug diversion. No drug diversion product has been able to collect these various data points into one repository for analysis. The innovative platform leverages machine learning to: 

• Continually capture and analyze data

• Rapidly identify and prevent drug diversion

• Pinpoint areas that need process improvement 

• Improve standard operating procedures in managing patient medication

Additionally, MAAP Analytics has the capability to help facilities recoup lost revenues. Proof of concept for this DD prevention platform began surfacing in 2013. Data research studies executed at Mayo Clinic Arizona demonstrated significant discrepancies, or large variances, 

of medication administration that were undetectable using report-based monitoring. The team at Mayo Clinic knew that solving discrepancies created an immense opportunity for cost savings. After implementing MAAP Analytics, the facility was able to significantly decrease the variance rate over three years to less than 1%, recovering millions of dollars.  

Uncovering discrepancies

Not all discrepancies uncovered are a result of drug diversion. Most variances can be attributed to poor training, inefficient processes, or missed opportunities. An effective drug diversion solution should be able to pinpoint these variances by location and by user, enabling facilities to identify areas of practice improvement. This alone can save hospitals hundreds of thousands of dollars annually.

When it comes to medication “wasting,” the typical protocol for controlled substances (CS) requires two clinical staff members — one for wasting the CS, the other as a witness. In this time of chaos, there are reports of staff not being available to witness waste, leading to opportunities for diverters to pocket the CS. MAAP Analytics utilizes a one-person wasting process, which saves a considerable amount of staff time by eliminating the interruption of a colleague’s patient care to witness a CS waste. 

Looking beyond the pandemic

Hospitals are struggling. In their effort to manage the pandemic, they’ve added temporary workers to help overworked staff; purchased overpriced supplies to keep employees safe; and suspended elective procedures and tests to protect patients. These efforts, unfortunately, 

have also led to a financial tsunami, placing greater pressure on hospital CEOs to find new ways to keep their facilities open and profitable. Already, 47 hospitals have filed for bankruptcy. ANiGENT has designed a patent-pending, comprehensive DD prevention platform capable of helping facilities solve multiple challenges. It’s an automated solution that improves inefficiencies, protects patients and employees, and captures lost revenues. Importantly, it can also predict and prevent drug diversion from occurring because it is capable of collecting, analyzing, and harmonizing data in real time to deliver a comprehensive view of all users, all medications in all locations. 

Given the current chaos that facilities are experiencing, hospitals may consider delaying any investment in a new platform. However, implementing a comprehensive drug diversion prevention program now would not only help protect hospital staff and patients from potential drug diverters, but it could also help slow the downward spiral that hospitals are experiencing financially.

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About the author


Charles “Chuck” D’Amato, RPh worked as a hospital pharmacist for over 20 years, most recently at Mayo Clinic Arizona. In 2018 he co-founded ANiGENT, a drug diversion solutions provider. ANiGENT introduced MAAP Analytics in 2019 as the most comprehensive solution for monitoring, detecting and identifying drug diversion events or practice improvement issues. Designed by clinicians for clinicians, MAAP Analytics has been successful installed in more than 80 facilities across the U.S.

For more information about ANiGENT visit: ANiGENT.COM 

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