The 229 Podcast: Automated Pharmacy Centers of the Future with Tricia Julian and Nilesh Desai

Bill Russell: [00:00:00] Today on the 2 29 podcast.

Tricia Julian: we're wearing a new hat in IT. Because none of the healthcare IT team members that I have today came to healthcare expecting to create automation that's really a warehouse akin to some of the automation that Amazon or UPS would see.

Bill Russell: My name is Bill Russell. I'm a former health system, CIO, and creator of this Week Health, where our mission is to transform healthcare one connection at a time. Welcome to the 2 29 Podcast where we continue the conversations happening at our events with the leaders who are shaping healthcare.

Let's jump into today's conversation. Here we are. It's the 2 29 podcast where we continue the conversations that start at the meeting. Today we're joined by Tricia Julian, CIO, for Baptist Health, I should say the Baptist Health in Kentucky. 'cause there's so many Baptist Healths around the [00:01:00] country.

And Nilesh Desai, chief Pharmacy Officer for Baptist Health. How do you guys distinguish yourself? Just start there. How do you distinguish yourself as Baptist health? 'cause there's a number of them.

Nilesh Desai: Wait, we just say Baptist Health? Louisville.

Kentucky,

Bill Russell: there you go.

Tricia Julian: Or Baptist Health, Kentucky and Indiana, because we have. Location there too.

Bill Russell: I'm gonna try to get this, the Baptist health to stick. You ever hear him say the Ohio State University? That's yeah. Yeah. We're gonna continue a conversation that started at the 2 29 project, which was really fascinating and it's on Central Pharmacy Services Center that you guys stood up.

And Nilesh, I wanna start with you. What prompted the decision. To invest in 102,000 square foot Central Pharmacy Center at this point in history.

Nilesh Desai: When I came to Baptist, one of our I guess opportunity I call it I literally, I started during COVID time.

So, the first year and a half was. Like, okay, you know, how do you survive with everything that was out there? But during this [00:02:00] time you know, it took me about six months to assess the gaps. You know,, what are we doing? What are we not doing? We had retail pharmacies at some of our hospitals, but not at all our sites. And then specialty pharmacy and inventory management you know, call center, you name it. And the things that we didn't have in place the way we should or many health systems have are that are out there doing it. And you know. About 10 years ago, I actually had a vision building out a central services center for, you know, systems that have seven eight hospitals or more.

To really leverage and create a centralized process where you can be a lot more efficient. Now, if you think about from a, you know, there are many aspects to it and that industry challenges that are out there. So if you think about, you know, staffing shortages we, for the last 15 years, we've been battling pharmacy technician shortages very dangerously post COVID.

We're actually battling pharmacist shortages in some markets now. And by [00:03:00] 2030 you're gonna experience a lot more pharmacist shortages. And then we already had drug shortages 20, 30 years ago we used to have 30 drugs and no one felt an impact. But now when you have 200 and 300 drugs on shortages, it becomes a operational management issue.

You know, how do you manage your drugs? How do you manage certain things where, so care is being provided. Medication access becomes a larger issue for us. And I don't know of how many headlines have you seen, but in a lot of chains in our closing stores on weekend, or they are closing their stores early in the evening.

So now our patients, when they leave their emergency room at seven, eight o'clock in the evening. If there are no pharmacies open, so how do they get their medications? As a lot of independent pharmacies are starting to fold up because of the reimbursements getting tighter, you know, they couldn't even keep the lights open.

So, when you start putting everything together and you know, the same issues resonate with Baptist opportunity, [00:04:00] was there, challenges were there, how do you take this to that next level of what a pharmacy should look like?

So, i'm, part of this Omnicell board where, you know, we kind of designed this autonomous pharmacy. Workflow, I call it. So it's it's five levels where you assess your health system and then you kind of say, okay, I'm at level three.

So when we did that exercise at Baptist we were around 2.9 and then I said, well, we need to get closer to that 4.5 level where you have technology. And in order to do that, you really have to be brave enough to go explore other industries because supply chain has done it.

So we started exploring we went into UPS, we went to Cardinal, we went to Medline, we went to Amazon, we went to many other health systems, and there were other health systems that were doing some type of central pharmacy, but not to the level of automation that we wanted. So we really you know, we.

I talked to many vendors. We settled on eight vendors. We had a eight way NDA done [00:05:00] between Baptist and all the vendors. So, yeah.

Bill Russell: I'm looking at this partner list, this vendor list. Yeah. I recognized one, two, I recognized three out of all of them. So Tricia, he threw this, that's it.

Curve ball to you and said, all right, here's what we're gonna do. Make it all work.

Tricia Julian: Here's our vision. And so, I love though, bill, because the fact that you said when you looked at it, you said, I recognize three. That was my exact feeling. And so, you know what's interesting is. The pharmacy IT team, right?

Partnering with them, pausing with them to say, this is gonna be brand new for us, for all of us, for Nilesh and his team. They've never done this. The vendor partners have never done this. We've never done it. So what we're gonna have to do is enter this space, recognizing we're gonna have to be really intentional about [00:06:00] communication.

And we're not gonna have anyone else that's done it before in healthcare this way that we're gonna be able to call. So again, , we are going to have to be unafraid to ask questions, many questions, you know, put the flag up.

If something doesn't feel right, doesn't look right, do the pauses. So. It's been a journey.

Bill Russell: You guys are gonna educate me. I've joked over the years that this is the education of Bill Russell. So drug shortages, tariffs, staff shortages, pharmacy deserts.

I mean, these were some of the things that you touched on earlier. Is this just as simple as saying for the state of Kentucky, we have one highly automated pharmacy that's doing a series of services and we have a distribution mechanism to all of our remote locations.

Is it, is that oversimplifying it?

Nilesh Desai: Actually yeah I, if you think about, this was kind of designed for Baptist, so we, if you think about the inventory that [00:07:00] we have from a Baptist per, we have eight hospitals, we have 12 retail pharmacies, we have close to 400. 50 plus clinics. Right. And this covers pretty much the whole state, right?

This is a good 70, 75% of the state. When you're planning a center like this you have to plan a lot of logistics around it because you have to obviously deliver these drugs.

You know, that's just one component from an inventory management perspective. The second business component was prescription fulfillment. We were not capitalizing our prescription fulfillment the way we should. Even when it was our own employees. They would go to CVS, Walgreens, whatever, and then all the same issues with pharmacy does it, et cetera.

So we started to, you know, put in where you have to come to fill your meds at our own pharmacies whether you're at the hospital or, you know, and then sent as a local pharmacy started to max out. They didn't have a space to grow. So that's when the right idea for a central pharmacy came into [00:08:00] play.

Bill Russell: How many pharmacists are involved are they actually at the center? Are they located?

Nilesh Desai: Yeah, so at the center on the inventory side, there's five pharmacists and about 14 techs. And then on the fulfillment side there, there's quite a few more pharmacists and techs because there you're doing a lot more volume.

I mean, we started with 50 scripts August 12th of last year, 2024 and a year later we're filling 3000 scripts a day.

Bill Russell: You have community pharmacy fills here. I'd love to hear the metrics on you know, they'd walk out of the hospital, walk past your pharmacy and go to CVS and get it filled.

Ha has that number changed?

Nilesh Desai: Yeah. So, again, five six years ago our meds to beds ratio was around 15 to 20% at best. Today we are hovering around 40 to 60% depending on what hospital. My goal is to get to 90%. When patients will go home, they should go home with their medications. Now, that's only possible if my volume at the retail pharmacies [00:09:00] is, you know, lesser.

So they can manage this increased volume in central pharmacies filling the stuff that they need to. So all your maintenance medications come out of central pharmacy, so now they can work on the one-time fields.

Bill Russell: So do you need less pharmacists? I mean, you talked about the staffing shortage. Do you need less pharmacists as a system?

Nilesh Desai: It's almost as you increase your volume, you're gonna need more pharmacists. More pharmacists.

Bill Russell: It's like

Nilesh Desai: you're building a volume up, right? Right. I mean, we filled 10,000 scripts a month to now we're filling 90,000 scripts a month, so obviously you're gonna need more people, but it's not vis Avis the same number because now there's technology in place.

If we didn't have robots, we didn't have any of that stuff in place. You would have to have a quite a, you know, a large number of people. Yes. But because of the technology aspect, now the numbers are lesser.

Bill Russell: I'm flipping through these pictures of this center. Yeah. This is not technology that I ever had to deploy, so I'm glad that you did it, Tricia.

[00:10:00] You know, what did you learn in this process of deploying, I mean, this is serious automation and equipment in here.

Tricia Julian: It is what I remember saying to some of the executives that I report to CFO , COO was I was just reminding them that we're wearing a new hat in it because none of the healthcare IT team members that I have today.

Came to healthcare expecting to create automation that's really a warehouse akin to some of the automation that Amazon or UPS would see. And so, you know what was familiar to us was Epic communicating with Omnicell cabinets that happens in the hospital that's familiar. What wasn't familiar is now we're going to.

Collect all that data from what's going on in the hospital cabinets throughout Baptist, and we're gonna send that information to the CPSC and then That data [00:11:00] is gonna convene in a couple of different products, vendor partners that are in the CPSC so that the inventory replenishment happens automated.

And so all the picks of the meds are starting with robots and it's automated and, things are running along conveyor belts so that then it gets packaged, and then when it's packaged, it's again, that's all automated. Nobody's touched it, and it's figuring out which of our hospitals that package now goes to.

And then everything about what's in that package has been. Closely, right? Identified so we know exactly what's in it, down to the pars, down to the NDCs, it gets shipped, and then when it gets on the other end, it gets received. And so now again, how do we have the right sort of communication in mass occurring back to CPSC so that everything is right about where all the controls are in terms of the inventory and where it stands, and then all the [00:12:00] financing.

So all the. Necessary ledger. Right. Accounting for all those activities was also new to do it in that type of, in mass replenishment activity. And we're live everywhere. He's replenishing all of our hospitals with these tools today.

Bill Russell: It's wild. Did you have to work with Epic to do some things they hadn't done before?

Tricia Julian: We did.

Bill Russell: Yeah.

Tricia Julian: So the good news is that's where the, there's a powerful synergy that. did evolve between the expertise within the team, much like we were talking. He has pharmacists on his team. I have pharmacists on our team. The IT team has pharmacists. So they're talking a common language in that regard.

'cause they all are pharmacists. And then they're working with the vendor partners. So with Epic, yes, there was a pharmacist on our side who was able to say to Epic, here's what we need. Here's where our gap is and we're gonna need you to help lean in. [00:13:00] So there was some development for sure on the Epic side

Bill Russell: Which stakeholder was hardest to win over to this. This concept you know, on the deck it says, better for patients, better for physicians, and better for the hospital. Was there a stakeholder that was harder to win over than another?

Nilesh Desai: I don't think that was a issue because I think the way in this was pitched it, it was about, you know, from a community perspective, having medication access. Surprisingly, we had a 93% retention rate. The patients, once they came to Baptist, they didn't leave Baptist. They said, we like the service you're providing. So that gave us that additional arm to say, all right, if this is at this scale, if we're able to retain our patients, then imagine if we roll out to 40, 50 clinics now we can be talking different numbers altogether.

And that's where, you know, the process started.

Bill Russell: The proof was in the pudding, so let's I don't know where that phrase came from, but anyway metrics. So [00:14:00] what key metrics define success for this program at this point? Nilesh I'm I'm curious what the outcome has been.

Nilesh Desai: So outcome wise, I mean, if you think about you know, I gave you, we were five and a half years ago.

We were at 10,000 scripts a month. Today we're filling close to 90,000 scripts a month. Geez. That's amazing. So incrementally it's, you know, ability to negotiate better pricing providing better costs to our patients. You know, some of the, because if I'm able to negotiate better pricing why am I not gonna provide that to our patients?

So this you know, scaling down from a health system perspective, we're self-insured. So, you know, there is a way you can manage. Pharmacy benefit management you know, from a health system perspective, the second largest expense, it used to be medical benefits, but now it's turned around your second largest expense is your PBM, which is your pharmacy benefit. So how do you help manage that? And then if you have [00:15:00] better controls in this place and then you're able to control costs which indirectly benefits the health system, especially when you are in a zone where cuts are occurring, Medicaid cuts are occurring, tariffs are coming on board, you know, so one after another you know.

Constraints on health systems. So there's a way you have to mitigate, and this is another way where pharmacy can come step out and really help the health systems in a very different way

Bill Russell: from concept to build, what was it about two years or little,

Nilesh Desai: Three and a half years from concept business plan.

Construction going live.

Tricia Julian: Yeah. And the IT work with the design and all of the details there really started in earnest in January of 24. And to Nilesh' point, we had a first go live. With pieces of it last August and we're still not finished. We don't really finish all the pieces of the project until March of 26.

So it [00:16:00] build intensity has been from January 24th through March of 26.

Bill Russell: Well, you may want to, you know, you may want to get that done Tricia. 'cause it sounds like you know. At 90,000 scripts. I mean, he might outgrow that 102,000

Tricia Julian: bill. I hadn't even thought of that. Nilesh, I'm not ready for that quite yet.

Expansion of a new facility,

Bill Russell: did you have to build a special facility or could you just get any. Warehouse and like retrofitted?

Nilesh Desai: No. So we did look for ready to go warehouses where you have to do some modifications, but the issue was we couldn't find it at centrally located or it was way too expensive and fortunately one of our hospitals right behind that Baptist actually owns quite a bit of land there. So, you know, they said, Hey, you have this property. We don't have to pray for property. All you have to do is you'll get a brand new building. I'm like, all right, we'll take it. So it was a ground up, you know, build when we kicked it off.

[00:17:00] And we have a beautiful building.

Bill Russell: I think in these times with Medicaid cuts and other challenges coming down the pike, it is a shame. You didn't tell me that, Hey, you could stand this up in six months. 'cause

Nilesh Desai: no I wish I can tell you. The vision was in the head. But getting people to do what you want is a whole nother thing. Yeah. And then especially in the technology world, it world, you know? Yeah. It's easy to say, Nilesh, do this, but is it really possible?

Right. And you know, I was tough, with a lot of the vendors, I would say no, I'm not negotiating on this one. This has to flow. There, there cannot be an FTE here. Because, you know, my plan was already done. Business plans were already submitted. So it wasn't like, oh, I can go back and add another 40 people or 30 people.

That wasn't gonna happen. Fortunately the vendors played the right workflows. They designed the technology as such, you know, we've already had over 30, 35 health systems already come for site visits. There are more coming. Interestingly, I have a lot of pharma [00:18:00] companies doing a lot of site visits as well.

So, you know, to, to our benefit, it worked out for us. And now if I have to redesign this, I mean, there are some things I would. Do little differently, but definitely I would say again, it takes a village. It literally took a village to make this happen. I mean internally and externally, both to really get this done.

But it's something to be very proud of. It's a nice crown that we have here now, so.

Bill Russell: Well, congratulations. This is a great project and I love the outcome. And Tricia, thanks for sharing. It was early on that you shared where you were at. 'cause it was actually the problem or challenge that you were dealing with.

And you put it out in front of the other CIOs and said, here's the technology stack. And they all looked at you the way I did, which was like. I don't know what that is like.

Tricia Julian: Good luck. Yeah. Yeah. There was moles. You should know. They did say good luck. And can this, can they really [00:19:00] do this? Can they really do this?

That was the

Bill Russell: conversation. It was like, man, when you're done, let us know. 'cause this looks really interesting.

Nilesh Desai: Yeah. We're at the final pieces of what we have to do by March of 2026, we should be done at least 90% of it. And then we have one or two things that we have to do to really get this going.

The intent was take it to that maximum level of workflow efficiency.

So this way you're not spending people human resources the way you need to. You should have technology to the work for us. Right.

Bill Russell: Fantastic. Well, thank you for coming on the show. Thank you for sharing this. Niles, Tricia, thank you.

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