VA Health Care
Modernizing VA's Mail-Service Pharmacies Should Save Millions of Dollars Gao ID: HRD-92-30 January 22, 1992The Department of Veterans Affairs (VA) could save millions of dollars by modernizing its mail-service pharmacies. Currently, VA runs too many mail-service pharmacies, which rely on labor-intensive processing of veterans' prescriptions. Also, because VA's pharmacies fill prescriptions in small quantities that are uneconomical, they incur unnecessary handling costs. VA recently began studying ways to change the basic structure of its mail-service pharmacies. This study, however, lacks an assessment of optimal prescription-dispensing quantities. VA will be unable to implement a systemwide modernization plan that maximizes cost savings unless it dispenses prescription medications in economical amounts.
GAO found that: (1) although VA mail-service pharmacies are capable of filling prescriptions in 90-day quantities, most routinely dispense drugs in 30-day quantities; (2) dispensing drugs in 30-day quantities causes VA to incur unnecessary mail-handling costs, since mailing drugs generally costs more than the drugs themselves; (3) VA could save as much as $34 million annually by reducing the number of mail-service pharmacies and modernizing them to increase productivity; (4) in a February 1989 circular, VA informed its pharmacies that they could submit consolidation and automation plans to regional directors, but only a few of the 226 pharmacies developed plans to change their operating practices; and (5) in 1991, VA headquarters pharmacy officials developed a pilot test study to test equipment and assess the operational requirements of consolidated, automated mail service pharmacies.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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