White, Brown Bagging Requirements Cost Hospitals $310 million Annually

U.S. hospitals are spending $310 million annually to manage the additional clinical, operational, logistical, and patient care work associated with white and brown bagging requirements, according to a new report.

The Vizient analysis and survey shows that, due to payer-imposed mandates, hospitals have already spent an estimated $114 million on additional staff to manage the excess coordination associated with white and brown bagging.

“White and brown bagging is causing staffing resource challenges and increased expense for hospitals at a time when COVID-19 has already caused significant hardships,” said Dan Kistner, PharmD, group senior vice president, Pharmacy Solutions for the healthcare improvement performance firm, in a news release. “Beyond those challenges and hardships, it’s impacting the crux of what hospitals do: provide patient care. This can cause patients who require chemotherapy medications and other critically important drugs to experience gaps in care coordination that result in delay in treatment.”

Brown bagging is when a patient acquires their medication from an external pharmacy and takes it to their provider for administration, Vizient explained.

Recent payer-imposed policies have forced the shift for many physicians and health systems from a traditional buy-and-bill model, where the provider purchases the medication and dispenses or administers it to the patient, to one known as white bagging where the physician receives a specialty medication from an external pharmacy (on demand) and the patient visits their physician's office/outpatient infusion center for administration.

“These changes to dispensing policies complicate access and creates delivery and dispensing delays impacting speed to therapy for patients, possibly resulting in negative outcomes and more financial burdens,” Vizient said.

The survey found that 92% of respondents experienced problems with the medication received through white/brown bagging, including: wrong drug, damaged product, dose not arriving in time for administration, and dose no longer appropriate due to patient's therapy changes.

In addition, 95% of respondents experienced operational and safety issues associated with white/brown bagging, including: separate inventory management system, delivery location/security disruptions, and lack of space to hold medication (e.g., refrigeration).

Fifty-two percent of respondents do not have an established policy in place in attempt to prohibit white/brown bagging, Vizient found, while 56% have not developed educational materials on the impact of alternate channels and their effect on the hospital.

“The reality is that this may simply be the tip of the iceberg, as most hospitals have not taken the steps to quantify the financial impact white and brown bagging have had on their institutions,” Kistner said. “As hospitals navigate this complex issue, they must develop a strategy to evaluate the extent of impact to their organization and their patients, educate their financial and managed care leaders, and advocate for legislative reform for themselves and their patients.”