Tracking. VA Organizational Structure and Pharmacy Policies

VA’s health care system is organized into entities at the headquarters,  regional, and local levels. Each VAMC is responsible for implementing VA’s pharmacy  policies and programming. Selected VAMCs Have Generally Similar Approaches for Managing Their Pharmacy Inventories, with Some Unique Approaches

In general, all five of the selected VAMCs we reviewed take similar  approaches for the various steps included in the pharmacy inventory  management process—that is, procuring medications from vendors or  other suppliers, receiving and storing these medications, tracking  medications at the pharmacy to account for all items and prevent  diversion, dispensing medications to patients, and disposing of expired  medications. 2). VA policy outlines parameters for VAMCs to manage their pharmacy  inventories, and VA officials told us that VAMC pharmacy staff can use  discretion to implement their own approaches for managing their  pharmacy inventories. To better anticipate and address potential medication shortages, officials  at another selected VAMC pharmacy told us they established a shortage  committee that meets on a weekly basis. One of the  selected VAMC pharmacies uses a modular automated dispensing  machine together with inventory management software that maintains a  perpetual inventory for most non-controlled substances stored in its  inpatient pharmacy. Oversight of Pharmacy Inventory Management Is Limited, as VA Lacks a Comprehensive Inventory Management System or a Focal Point for System-Wide Oversight

VA does not yet have a VA-wide pharmacy inventory management  system in place that would allow it to monitor VAMC pharmacy inventory  in real time and provide better oversight of how VAMC pharmacies  manage their inventories. VA concurred  with our recommendation. VA officials told us that the new system  will have the capability to monitor pharmacy inventory in real time across  VA. VA signed the contract for this new system in May 2018; however, full  implementation is expected to take up to 10 years. The lack of a focal point with  defined oversight responsibilities is inconsistent with federal internal  control standards for establishing structure and authority to achieve the  entity’s objectives and internal controls related to monitoring. Without a focal point for  system-wide oversight of VAMC pharmacy inventory management, VA  has limited awareness of the unique approaches that VAMCs use to  manage their inventories and is missing an opportunity to evaluate these  approaches. Additionally, VA cannot effectively share and standardize pharmacy inventory management best practices as appropriate. Leveraging these existing  mechanisms is especially important given that VAMCs have historically  had challenges in managing their inventories, and also because a VA- wide pharmacy inventory management system may not be available for  the foreseeable future. Recommendation for Executive Action

We are making the following recommendation to the Department of  Veterans Affairs:  The Secretary of the VA should direct the Undersecretary for Health to  designate a focal point for overseeing VAMCs’ pharmacy inventory  management system-wide and define the focal point’s responsibilities.
Why GAO Did This Study

VA provides health care services, including pharmacy services, to approximately 9 million veterans each year. Since 2000, VAMCs have faced recurring challenges in managing their pharmacy inventories, including difficulties with accurately accounting for and updating inventory totals through their pharmacy systems.
GAO was asked to review VA pharmacy inventory management. This report (1) describes approaches selected VAMCs use to manage their pharmacy inventories and (2) assesses the extent to which VA oversees VAMCs' efforts to manage their pharmacy inventories.
To conduct this work, GAO visited a non-generalizable selection of five VAMCs chosen for the complexity of services offered and variation in location. GAO also reviewed VA national policies and local polices for the selected VAMCs and interviewed VA officials at the headquarters, regional, and local levels. GAO assessed VA's oversight of pharmacy management in the context of federal internal control standards.

What GAO Found

Selected Department of Veterans Affairs' (VA) medical centers (VAMC) use generally similar approaches for managing their pharmacy inventories. For example, all VAMCs store certain medications in secured areas. However, GAO found that VAMCs have also taken unique approaches for procuring and tracking medications, as allowed under VA policy. For example, to better address medication shortages, one VAMC pharmacy GAO visited established a shortage committee that meets on a weekly basis. Another VAMC pharmacy uses an automated dispensing machine together with compatible software that allows the pharmacy to track the location of most inpatient medications in real-time (see figure).
GAO also found that VA's oversight of VAMCs' pharmacy inventory management is limited as VA lacks a comprehensive inventory management system or a focal point for system-wide oversight. In May 2018, VA signed a contract for a new electronic health records system that should allow VA to monitor VAMCs' inventories; however, VA officials expect implementation of this system to take up to 10 years. Based on a review of VA policies and interviews with VA officials, GAO found that VA has not designated a focal point with defined responsibilities for system-wide oversight of VAMCs' pharmacy inventory management. This is inconsistent with federal internal control standards for monitoring and establishing structure and authority to achieve an entity's objectives. Without a focal point for system-wide oversight, VA has limited awareness of the unique approaches that VAMCs use to manage their inventories and is missing an opportunity to evaluate these approaches. Additionally, VA cannot effectively share and standardize inventory management best practices as appropriate. Having a focal point is especially important given that VAMCs have historically had challenges in managing their inventories and a comprehensive pharmacy inventory management system may not be available for the foreseeable future.

What GAO Recommends

GAO recommends that VA designate a focal point for overseeing VAMCs' pharmacy inventory management efforts system-wide and define the focal point's responsibilities. VA concurred in principle with the recommendation.