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Praxis makes perfect?

If you like theory, you'll love the current debate about health care reform, in which theories and projections abound. But if you want to put your money on a proven winner, you'll have to look beyond the klieg lights that illuminate the deliberations of health policy analysts. Perhaps to your surprise, you'll have to return to the workings of most American hospitals.

Tucked away in the hospital bureaucracy, out of sight of health policymakers, committees that regulate the purchase and use of drugs have learned to weave larger policy objectives into the web of clinical practice. With the support and active participation of clinicians, these hospital formulary committees have controlled costs, regulated physician practice patterns, and improved patient care.

Policy planners would do well to test their theories against the practical model provided by the formulary committee. These committees have learned how to translate data collected in the aggregate into savings at the patient's bedside without alienating practitioners or distorting the healing enterprise. As we evaluate proposals to reform and perhaps restructure the health care system, formulary committees provide a working model for thoughtfully balancing the needs of patients, practitioners, and institutions. If indeed "God is in the details," we would be well advised to understand this equitable, creditable, and scientifically sound strategy.

A Formulary Primer

Formulary committees control drug expenditures by selectively purchasing pharmaceutical products and by regulating their use once they are on the formulary. Employing a hybrid blend of cost-effectiveness analysis, peer review, and continuing medical education, these committees use an interdisciplinary method to evaluate drug purchases and to ensure that practitioners use drugs thoughtfully. Drugs that are not approved by the formulary committee are available initially only on an emergency basis and thereafter only through a special appeals process.

Drugs are considered for inclusion on a hospital's formulary after rigorous peer review by a committee composed of individuals with expertise in a range of medical and surgical specialties as well as pharmacology, epidemiology, infectious disease, microbiology, and hospital administration. Drugs can be proposed for inclusion by hospital pharmacologists or clinicians who believe that an addition to the formulary is indicated. Committees assess the clinical merit of prospective additions by reviewing the published literature and considering what additional benefits new drugs might bring to the existing formulary.

Drug choices may vary from one institution to another, and formulary committees can select drugs based on the needs of their institutions and the patients they serve. For example, a specialized cancer center treating immunocompromised patients may need a wider assortment of antibiotics than a community hospital treating an unselected population. Formulary committees can choose agents based on these local demographic data and tailor their selection of antibiotics to best meet the drug resistance patterns of the bacteria within the institution.

All selections are made by considering the benefits new agents will bring to the existing formulary. Like the college admissions officer who selects a freshman class based on its balance and diversity, the formulary committee evaluates drugs based on their individual merit and what an agent adds to the range and scope of the entire formulary. This strategy minimizes the purchase of new drugs that duplicate the indications of drugs already available. It also identifies when new agents confer a significant benefit over older drugs and when older, less effective drugs need no longer be maintained in stock.

Because formulary committees purchase all drugs used within hospitals, they provide an important buffer between the practitioner and the marketplace. Decisions to place a drug on the formulary are isolated from the lobbying efforts of drug company representatives who have a vested interest in which ulcer drug or antibiotic the hospital decides to purchase. By contrast, in the outpatient setting these pharmaceutical detailmen visit practitioners in their offices and attempt to influence their prescribing patterns by showcasing their newest products. The activities of the formulary committee negotiate the interface between the marketplace and the clinic and help to minimize the inflationary costs of drug company marketing.

The Formulary and Clinical


Limiting the number of drugs that are generally available doesn't only save money, it also improves clinical practice within an institution. A circumscribed formulary helps clinical staff to familiarize themselves with the characteristics of the drugs they will routinely use and to develop expertise with these agents. Committee selections also help keep the nonspecialist from having to choose from a potentially bewildering array of possibilities. Instead of having to select one third-generation cephalosporin antibiotic from the myriad of choices on the market, clinicians are limited to a manageable range of options.

Formulary committees also influence the clinical use of drugs within the hospital through a novel mix of regulation and medical education. This is best appreciated by considering the use of broad spectrum antibiotics within a hospital. Ideally, an antibiotic is chosen based upon the patient's status and the clinician's opinion of which microbe is responsible for the infection. Yet a physician who prescribes an antibiotic for a hospitalized patient generally has to choose a drug, or combination of drugs, before definitive cultures and drug sensitivities are available. Given this uncertainty, decisions about which antibiotic is appropriate can be highly subjective. Some physicians respond to this incomplete data set by overtreating their patients with antibiotics that have an excessively broad spectrum.

Some formulary committees countervail this tendency by limiting the use of powerful antibiotics to specific situations in which they are clearly indicated. Regulating the use of powerful drugs, which have a tendency to be costly, not only saves money, it confers benefits upon the patient, hospital, and greater community as well. Individual patients are spared the cost of a drug they may not need plus the additional risk of a drug reaction. While a patient may marginally benefit from the use of an overly potent, "fail-safe" antibiotic, circumscribing its use protects current and future patients from alterations in the hospital's ecosystem that lead to drug-resistant bacteria.[1]

The significance of this point can be appreciated by drawing out its relationship to what, following Norman Daniels, we might call the "closure" issue in resource allocation. Daniels points out that it seems much easier to justify denying marginally beneficial care to one patient if we can be sure that the money we're saving will stay in the health care system, purchasing more effective care somewhere else: better prenatal care is a tradeoff easier to accept than more tax breaks for small businesses. If resources saved by denying health care to some patients stay in the system, that system is "closed."[2]

Analogously, when the formulary committee's policy results in denying patients pharmaceuticals that might be marginally more effective for those individuals, there are benefits that stay in the system - biological benefits. Prescribing patterns that optimize individual benefits may undermine the future efficacy of medications that all hospitalized patients must ultimately rely upon. The undisciplined use of antibiotics increases the number of times that bacteria are exposed to these agents and allows them to develop defenses against the drug's mechanism of action. Unindicated dispensing of drugs accelerates the rate at which these mutations occur and leads to significant drug resistance. Antibiotics (which might remain effective outside the hospital's environment) may retain a fraction of their former power on some wards of a hospital where the agent is overused. Because bacteria often respond to these environmental challenges faster than pharmaceutical houses can produce new drugs to outmaneuver them, formulary committees encourage policies that prevent the development of unnecessary resistance. Restrictive formulary policies thus observe what might be called biological closure: the added therapeutic effect that might be denied to one patient stays in the system, enhancing the effectiveness of the hospital's drugs overall.

By attending to these ecosystemic consequences, clinicians can appreciate that their patients have current and future medication needs that may be mutually exclusive within the context of the hospital's self-contained ecosystem. Clinicians learn that the use of a drug that adds a marginal benefit may make that same drug ineffective in that same patient a week hence when that medication is the only available therapy for a serious pneumonia or case of sepsis. This longitudinal perspective helps to legitimate denial of a marginally beneficial medication to some patients because doing so makes it biologically possible for future patients to receive that medication for nonmarginal indications while they are in the hospital. Moreover, patients who are denied a drug that might marginally have benefitted them and who are then discharged might be reassured by the greater likelihood that the drug they were denied will still be efficacious when they are again admitted to that same hospital.

Regulation also spares the community the unnecessary and potentially iatrogenic costs of defensive medicine: clearly delineated practice patterns set community standards and minimize the tendency to overprescribe that might otherwise be prompted by litigation or malpractice concerns.

Acting Locally

In many hospitals with active formulary committees, clinicians are expected to abide by the practice guidelines outlined by their colleagues. Although such regulation might appear to interfere with the physician's clinical discretion, the activities of the formulary committee have become part of daily hospital practice in many institutions. Physicians generally accept this level of micromanagement in part because of the "user friendly" and informed manner in which this kind of regulation reaches the practicing physician and patient at the bedside.

In hospitals where formulary committees actively guide practice patterns, the work of the committee is an exercise in professional self-regulation. The committee pursues larger strategic goals like cost-effectiveness and standardization of medical practice while respecting individual physician's professionalism and the doctor-patient relationship. Practitioners tend to accept this level of intrusion because they perceive the activities of formulary committees as emanating from within their clinical world through a process that privileges clinical information.

For example, a physician who wants to use an antibiotic in a situation that does not correspond with guidelines articulated by the formulary committee may use the drug for twenty-four hours before an appeal must be made for its continued use. This probationary window acknowledges that even the best guidelines will not satisfy patients' needs in all situations. Clinicians may appeal decisions on drug use to physician representatives of the formulary committee. While these discussions may result in a confrontation, more often they take the form of a consultative exercise in which physicians discuss the clinical situation and the rationale for using a drug in a manner not recommended by the formulary guidelines. Formulary representatives with subspecialty expertise either accept their colleague's rationale and make an exception or propose an acceptable alternative. In either case, this consultative process is an exercise in continuing medical education that improves patient care and attempts to standardize prescribing practices.

Physicians appreciate this flexibility. It acknowledges the value of their own clinical judgment and also admits that guidelines need not be airtight to meet their overall goals. I believe that the formulary committee's acknowledgement of its limitations is in part responsible for its success and positive reception among clinicians. Decisions are not arbitrary but based upon the best available clinical data as it is applied to specific clinical circumstances. In contrast to other strategies that attempt to manage the use of technology, the activities of formulary committees are seen as complementing the clinician's activities rather than impinging upon professional authority.

Moreover, unlike national practice guidelines, which are often resisted as a regulatory intrusion, guidelines promulgated by formulary committee decisions are generally integrated into practice patterns because they are known to originate locally. Written and maintained by respected peers, formulary guidelines put a local face on national norms that might otherwise be resisted. The committee's influence is supported by local clinicians' knowledge that their deliberations are open to question and modification. For this reason, at the local level, committee guidelines feel more like education than regulation.

The power of the formulary committee may stem from its awareness of institutional needs and practices. Local committee members strive to make decisions influenced by nationally accepted practice patterns. This minimizes regional variation while at the same time maintaining the local political viability of the formulary committee. This local sensitivity paradoxically becomes a means of bringing national norms to the institutional level.

The Limits of Praxis

Although a formulary committee may justly distribute the resources allocated to it based on a theory of biological closure, this virtue by itself does not mean that the process is without its limitations. In the first place, because the formulary committee operates within a larger hospital committee, the justness of its deliberations alone cannot guarantee that adequate institutional resources overall are being spent on drugs. Even the most deliberate of formulary committees would be found wanting if it made "wise" decisions about the resources at hand yet failed to recognize that its budget was grossly underfunded. But while institutional priorities might lead to inadequate allocation for formulary purchases, the careful deliberations of the formulary committee will likely make a compelling argument for a judicious appropriation of institutional resources.

We might also ask why we should draw on this model of a priority scheme because practitioners find it acceptable. This is a formidable challenge and may indicate that we have to circumscribe the authority of formulary committees to debates about medical indications of certain agents. Before we can generalize the formulary method to broader issues of allocation, we need to come to a clearer understanding of the normative theory guiding the formulary's praxis. Such a normative theory might incorporate an unarticulated communitarianism among medical professionals or an attempt to reconcile medical and economic concerns within a utilitarian framework.

But while the formulary model cannot purport to represent broader societal preferences on the allocation of resources, this method does sanction a forum for practitioners to address these issues in a novel manner. By discriminating the physician's obligation to individual patients from the clinician's obligation to the larger hospital community, the formulary process creates a dynamic that has practitioners acting both as advocates for individual patients - their traditional role - and as guardians of the public health within an institution. This deliberate dichotomy creates an opportunity to balance the needs of individual patients with the broader concerns of the hospital community.

While this dialogue occurs only within a professional sphere, the process could provide a mechanism for physicians to consider these issues and, more importantly, might provide an actual forum for patients and others to join in these deliberations. This would be analogous to the participation of lay people on institutional review boards that monitor hospital research programs. Although it would be imprudent to believe that formulary committees can fully reflect larger societal preferences about allocating health care resources, it would be equally unwise to discount the range of both professional and lay perspectives that this process might be expected to integrate.

The formulary committee's actual and potential deliberations might also provide a means to examine the sorts of normative assumptions that as a practical matter get factored into rationing or clinical priority-setting schemes. By holding these assumptions up to scrutiny, we may be able to determine whether the praxis of the formulary committee can serve as a model for other clinical allocation decisions.

Regulation from Within

As we reform the health care system there is a natural tendency to invoke economic and managerial models that are alien to the practice and ethos of medicine. Although this may be a function of our current frustration with the slow pace of reform, we shouldn't fail to recognize that the formulary committee provides an indigenous mechanism that functions beautifully within the confines of clinical medicine. The activities of the formulary committee only pertain to the use of drugs. They could, however, be modified to assess other new technologies and coordinate their introduction into the clinic. Modified formulary committees might also provide a mechanism for bringing other voices into these complex deliberations.

The professional self-regulation offered by the formulary model confers many of the benefits sought by health policymakers. It would be a costly oversight not to recognize the value of their potential contribution.


[1.] Joseph J. Fins, "The Rationing of Health Care: A Doctor's Dilemma, "Journal of Religion and Health 32, no. 1 (1993): 9-20. [2.] Norman S. Daniels, "Why Saying No to Patients Is So Hard: Cost Containment, Justice and Provider Autonomy," NEJM 314 (1986): 1381-83.
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Title Annotation:hospital formulary committees and regulation of drug purchases and prescribing
Author:Fins, Joseph J.
Publication:The Hastings Center Report
Date:Sep 1, 1993
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