In-hospital drug-use optimization using the Marginal Utility Theory

Abstract

Objective To use cost‐utility analysis as an application of the Marginal Utility Theory whereby optimal drug use in terms of optimal drug cost and volume is estimated based on the diminishing marginal utility conditions. Methods Data were collected between 2003 and 2005 from the billing system of two large hospitals that belong to the University of Pittsburgh Medical Center. Domains of interest were stored and correlated in a multidimensional, highly structured Drug Use and Management System (DRUMS) developed by the Center for Clinical Pharmacology at the University of Pittsburgh. Optimal in‐hospital drug use is achieved when there are equal marginal rates of substitution between in‐hospital drug use and therapeutic outcome subject to diminishing marginal utility conditions. Key findings Patient disposition after hospitalization and length of stay appeared to be reliable indicators of patient therapeutic outcome. Drug cost and volume were over‐extended in patients with a length of stay exceeding 20 days and disposition into long‐term care, implying over‐utilization and/or over‐prescribing of drugs. All categories of length of stay and disposition were investigated; they each present a different potential for cost‐utility optimization. Conclusion We recommend that entrepreneurial hospital strategists adopt knowledge systems such as DRUMS to analyse aggregate data, and use cost utility as a tool for aggregate in‐hospital drug use analyses.