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Telepharmacy Startup Targets California's Rural Hospitals

California Healthcare Foundation's investment in Pipeline Healthcare Solutions could help rural and safety-net hospitals gain round-the-clock access to pharmacists' expertise.

Ken Terry

March 20, 2012

4 Min Read

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The California Healthcare Foundation (CHCF) has invested in a startup firm called Pipeline Healthcare Solutions to bring the benefits of telepharmacy to California's rural and safety-net hospitals. Pipeline, which has worked with rural facilities in Washington State and Illinois, is now meeting with administrators of critical access hospitals across California, according to Margaret Laws, director of CHCF's Innovation for the Underserved Program.

Telepharmacy uses Internet and teleconferencing tools to deliver the expertise of pharmacists remotely to hospitals that do not have around-the-clock pharmacist coverage. Rural hospitals might not be able to afford this kind of coverage, or they might not be able to find enough pharmacists to staff their pharmacies on evenings and weekends.

Some larger hospitals also use telepharmacy, to save money. In fact, the group purchasing organization Cardinal has been selling telepharmacy services to big hospitals for years, Laws told InformationWeek Healthcare. But up to now, she said, the telepharmacy market for hospitals of under 250 beds--all the way down to critical access hospitals, which have 25 beds or fewer—has been underserved.

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Pipeline aims to fill this gap. Launched with "angel" investments in 2009, the company recently received venture capital financing and has expanded into 19 states, with plans to go nationwide.

CHCF's investment in Pipeline grew out of the foundation's strategy to buy into healthcare firms with socially positive goals, rather than just providing grants to programs that would disappear after the grant money ran out. To date, CHCF has invested in five companies, including Pipeline.

The foundation's involvement with telepharmacy began a few years ago, when it funded a University of California Davis pilot of the technology in several rural hospitals. The program worked well, and the hospitals liked it. But UC Davis decided to bow out when the money was gone.

Last year, some venture capitalists brought Pipeline to CHCF's attention, Laws recounted, and she recognized that it could be a big help to rural and critical-access hospitals. "We compared the cost of having Pipeline in place with having a full-time pharmacist [in a rural hospital], and that was very compelling to us from a cost-saving perspective. We looked at the quality improvement, which included a reduction in medical errors caused by pharmacy errors in the hospital."

Although UC Davis found that telepharmacy averted some potentially serious medical errors, Laws admitted that Pipeline's methodology has not been rigorously evaluated in this respect. So CHCF plans to fund an independent study of Pipeline's ability to improve patient safety in hospitals, she said.

What Pipeline typically does, Laws explained, is to oversee pharmacy orders that have been approved by a physician or a nurse. By comparing an order with pertinent facts about a patient, such as his age, gender, weight, and diagnoses, as well as the other medications he's on, the remote Pipeline pharmacist can tell whether the prescription is safe and appropriate. In some cases, the pharmacist might suggest replacing a medication with something else because of its side effects.

Pipeline's pharmacists document their prescription reviews and clinical interventions in a hospital's pharmacy information system (PIS), Laws said. They either record the data within the PIS or send it to the system through an interface.

In California, unlike some other states, there's no need for a pharmacist to have a face-to-face encounter with a patient, Laws said. So there is no need for videoconferencing equipment to use Pipeline. But she pointed out that a hospital might want to use teleconferencing to educate patients about how to take a medication, especially at discharge.

By using Pipeline, the company claims, the average hospital pharmacy can reduce its cost per-medication order by 40%. But it is not clear how much the California critical-access hospitals will have to pay for the service. Pipeline, which offers both per-hour and per-prescription rates, will contract individually with each hospital, Laws said. CHCF's role, she added, is to bring potential customers that otherwise wouldn't have access to this technology and make sure Pipeline understands their needs.

"The value proposition of Pipeline is to provide affordable pharmacy oversight to small and rural hospitals in a way that can meet some of the needs that we know they have," she concluded.

The 2012 InformationWeek Healthcare IT Priorities Survey finds that grabbing federal incentive dollars and meeting pay-for-performance mandates are the top issues facing IT execs. Find out more in the new, all-digital Time To Deliver issue of InformationWeek Healthcare. (Free registration required.)

About the Author(s)

Ken Terry


Ken Terry is a freelance healthcare writer, specializing in health IT. A former technology editor of Medical Economics Magazine, he is also the author of the book Rx For Healthcare Reform.

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