HOSPITAL DRUG FORMULARIES AND USE OF HOSPITAL SERVICES

Many hospitals have introduced formularies to reduce hospital pharmacy expense, among other reasons. This study provides empirical evidence on the influence of hospital formulary restrictions on pharmacy charge s, all other hospital charges, and on length of stay, using a survey o f hospital drug policies and hospital discharge data from Washington S tate in 1989. Limiting the number of drugs in particular therapeutic c ategories reduced total charges incurred for gastrointestinal disease and asthma patients, increased total charges for cardiovascular diseas e patients, and had no effect on charges for infectious diseases patie nts. Restricting availability of drugs reduced pharmacy charges, but t hese savings tended to be offset by increases in other charges. Combin ing the categories, we found that restricting availability of drugs di d not affect charges. We conclude that across-the-board restrictions d o not result in cost savings, although savings may be realized for par ticular drug categories.