8/2/2019 Hail to the Chief . . .

Pharmacy Officer

9/7/2004

Hail to the Chief . . . Pharmacy O cer

Cheryl A. Thompson

Chief executive officer (CEO), chief operating officer, chief financial officer, chief information
officer, chief medical officer, chief nursing officer, chief privacy officer, chief compliance officer.
Know what's missing from what some people call the C suite or the O-zone layer? Chief pharmacy
officer.

But not everywhere, according to pharmacists close to a new trend in health-system management
that places a pharmacist among an organization's top-level decision-makers.

"If you are more than a couple levels below the CEO, then I'm going to suggest to you that your
effectiveness in the organization is too dependent upon communication in authority lines that go
through too many people," said David A. Kvancz, speaking about the topmost pharmacist in a
health system or hospital.

Kvancz became chief pharmacy officer at Ohio's Cleveland Clinic Foundation in late fall 2003 after
six years as the pharmacy director. Before that, he was associate director of clinical pharmacy
services at the University of Texas Medical Branch, Galveston, and assistant pharmacy director at
the Tucson Medical Center in Arizona.

He now reports directly to Cleveland Clinic's chief operating officer, belongs to the medical
executive committee, and continues to direct the pharmacy department.

Greater influence. Not that the new title, in and by itself, has enabled Kvancz to accomplish
anything more than he did as pharmacy director at the 1058-bed hospital, coordinator of the
pharmacy directors and programs at the health system's nine community hospitals, and chair of
the pharmacy directors group, but the face-to-face interactions with people in the highest echelon
have made a difference. "It really just facilitates," he said, "and, if you will, greases the wheel so that
when opportunities develop or problems develop, there's a much smoother process for resolution."

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Ronald H. Small, chief pharmacy officer at Wake Forest University Baptist Medical Center
(WFUBMC) from 2002 until recently, said he believes that the new title made other people at the
North Carolina health system recognize that pharmacy fits differently than other departments into
the organizational structure.

Small started his managerial career at Baptist Hospital in 1975. Over the years, he assumed
responsibility for pharmacy practice at the growing health system's academic medical centers,
hospital affiliates, community and home care pharmacies, and long-term nursing centers and for
management of the pharmacy benefit in WFUBMC's self-insured health plan. His staff grew from 12
persons to 250, and the main hospital alone expanded to about 830 beds.

He said the change in title to chief pharmacy officer resulted from the WFUBMC president and
chief operating officer realizing that "director of pharmacy" no longer matched what he really did.

Small said his 25-plus years as a student of the "quality commitment" taught by Joseph M. Juran,
W. Edwards Deming, and Stephen R. Covey made the pharmacy department stand out as "being
unique and picking a quality strategy and sticking with it." Because of that reputation, Small said,
he became part of the group, which included the president and vice presidents, that selected the
medical center's strategy for quality, Six Sigma.

And, on September 6, Small gave up the role of chief pharmacy officer and assumed the new
position of vice president for clinical quality outcomes, which places him on WFUBMC's quality-of-
care executive council and over the pharmacy, infection control, and value analysis and outcomes
management departments.

The pharmacy department stands out not only for its reputation in quality, he said, but for its new
facilities.

"The organization allowed me to build an office area that is quite unique in pharmacy," Small said,
describing it as a separate organizational facility on the ground floor. While all of the assistant
directors and clinical coordinators have individual offices, the chief pharmacy officer has an office
with an adjacent large conference room. There are other conference rooms for the staff's use.

Jack S. Newberry, chief pharmacy officer at Michigan-based Trinity Health, said his move in June
from hospital pharmacy director to member of the clinical corporate staff changed his primary
role to strategic development and planning, particularly of clinical and professional pharmacy
services, contracting initiatives, and pharmacy informatics. He gladly gave up responsibility for
operational issues. The pharmacy directors do not report to him.

At Trinity, a health system that includes 45 hospitals in seven states, Newberry said the major
clinical project underway is adoption of an information system, by Cerner Corporation, to enable
computerized prescriber order entry and other electronic functions.

"We are finding that we need to make more and more system-level decisions" as the project
proceeds, he said. Whereas the corporate level of Trinity tends not to make many decisions that
dictate practice, he said, the group has been contemplating ways to improve the medication-use
system, such as incorporating bedside scanning of bar-coded medications.

Newberry said the hospital pharmacy directors make "collaborative decisions" at the monthly
conference call for Trinity's pharmacy council. He then advocates those decisions throughout the
health system.

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"I was one of the directors in our organization for about 30 years," he said. "I'm seen as their
representative," not an antagonist.

The concept. The first published appeal for hospitals to have a chief pharmacy officer apparently
came from Harold N. Godwin, who recently retired as pharmacy director at University of Kansas
Medical Center, Kansas City, after 35 years and remains professor and chair of pharmacy practice.
On retirement, he was appointed an associate dean of pharmacy.

In a 2000 commentary in the American Journal of Health-System Pharmacy (AJHP), Godwin wrote: "It
would seem that a health system also needs to have a chief pharmacy officer (CPO) who has
recognition and organizational parity with the other "O's" in the hospital. The CPO should be
responsible for drug-use-control policies throughout the organization."

He said recently that he proposed the position after reviewing the findings of the 1999 ASHP
national survey of pharmacy practice in acute care settings, a study that focused on drug
dispensing and administration.

Chief pharmacy officer was an idea, he said, conceived from his irritation at the "lack of
fundamental progress" in the wide-scale adoption of established practice standards and
guidelines.

"You wonder whether we've got these gaps [in pharmacy practice] and we're ineffective maybe
because our position in the organization is not where it should be," Godwin said of pharmacy
directors.

He raised the idea of chief pharmacy officer again in AJHP earlier this year and, he said, at the
December 2003 strategic planning meeting of the pharmacy council for University HealthSystem
Consortium (UHC), an alliance of 90 academic health centers. Discussion by the pharmacy council
led to the development of a white paper.

"It's getting a lot of positive reaction . . . from the UHC folks, and they're probably going to lead the
way" in getting a chief pharmacy officer at their facilities, Godwin said. There may also be smaller
hospitals without academic affiliation, he said, where the topmost pharmacist should have a seat
at the corporate table.

"Medication therapy is high on the radar screen at any institution budgetwise, so why shouldn't it
be equally as visible from a priority standpoint of the organization?" he said.

But the title and position in the corporate group do not confer magical powers. "If you get the
influence, you get the position, and then you don't know how to lead or you don't know how to tell
the story, then you're not better off," he said.

Prevalence.The topmost pharmacist at one in four UHC institutions has a title connoting a
position higher than pharmacy director, according to the 50 responses that Steve Rough received
from his survey of managerial structure.

Rough, pharmacy director at the University of Wisconsin Hospital and Clinics, based in Madison,
said he conducted the survey in July to help him better match the department's managerial titles
with the holders' actual responsibilities.

He said 5 of the 13 institutions with a pharmacist in a position higher than the director level used
the title chief pharmacy officer. The other 8 institutions had a corporate pharmacy director, vice
president of pharmacy services, or assistant vice president of pharmacy services. But at all 13
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institutions, he said, the corporate-level pharmacist had at least one pharmacy director as a direct
report.

Overall, Rough said, the 50 UHC pharmacy departments that provided information had an average
of 10.5 managers. Twenty-seven departments had at least three levels of management between the
pharmacy director and staff pharmacists.

The view above and below.Kvancz and Small said their medical centers' chief pharmacy officer
reports to the chief operating officer. In addition, Small said, WFUBMC's chief pharmacy officer
reports to the vice president of operations at Wake Forest University Hospital and has a "dotted-
line relationship" to the vice president of operations at each place with pharmacy services.

Newberry, whose office is in one of the two buildings that house Trinity's corporate headquarters,
reports to the executive vice president for medical affairs, the equivalent of the chief medical
officer.

At the moment, no one reports directly to Newberry, although he said he is recruiting for a business
manager to work with the group purchasing organization on contracts. Members of Trinity's
clinical corporate staff do not have direct reporting relationships with the clinical staff at the
hospitals, he explained.

The position of chief pharmacy officer at Trinity, Newberry said, originated with Mercy Health
Services, one of the two Catholic health systems that merged in 2000 to create the health care
giant. Mercy's corporate structure included a chief pharmacy officer whose responsibilities were
clinical and professional services and the managed care program. That chief pharmacy officer left
the organization a year and a half ago, he said, and Trinity decided to maintain the position, albeit
with a new responsibility for the supply chain.

Small said the pharmacy directors at WFUBMC's numerous sites report directly to the chief
pharmacy officer. When Small held that position, the inpatient and ambulatory care pharmacists
who care for transplant patients, the pharmacy medication safety coordinator, and the coordinator
of the drug information service center also reported to him.

Kvancz, who doubles as Cleveland Clinic's pharmacy director, said he has delegated many of his
department-level responsibilities to his four assistant directors and expanded some of their
previous responsibilities. In addition to the assistant directors, Kvancz directly supervises the
contracting manager, billing and reimbursement manager, and utilization manager.

Potential as a career step?Small said he did not view the earlier change in his title to chief
pharmacy officer as something intended to keep a long-term employee in place and satisfied.

Kvancz, who said he developed his new position with Small's help, admitted that his future job
opportunities in institutional pharmacy management shrunk, in his mind, once he became
director at the well-respected Cleveland Clinic.

With a chief pharmacy officer, he said, the institution recognizes the importance and benefit that a
good pharmacy service and department bring to patient care in the health system.

"Chief pharmacy officer may be an appropriate title for me or Ron Small at Wake Forest," Kvancz
said in July, "but it may not be an appropriate title in other organizations, depending upon what
they title their chief nursing executive or the chief medical staff person."

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Newberry said he doubts that the position of chief pharmacy officer at Trinity is meant to be an
avenue for career development. After all, there are 45 hospital pharmacy directors and only one
chief pharmacy officer.

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