whitepaper 4 20-fn%5_b2%5d

The Business Case for Bar-Code Readiness

Aligning Acute Care Hospital Goalswith Pharmacy Objectives to Ensure Patient Safety,

Operational Effi ciency and Cost Containment

By Janet Silvester, R.Ph, MBA, FASHP and Chris Jones, R.Ph

About the AuthorsJanet A. Silvester, R.Ph, MBA, FASHPDirector of Pharmacy and Emergency ServicesMartha Jefferson HospitalCharlottesville, VA

A past president of both the American Society of Health-System Pharmacists (ASHP) and the Virginia Society of Health-System Pharmacists (VSHP), Janet A. Silvester has more than 30 years experience advancing pharmacy practice in a hospital setting. She currently serves as Chair of the ASHP Executive Vice President Search Committee and Chair of the Virginia Pharmacy Congress. She has received numerous honors, including VSHP’s Pharmacist of the Year award. Janet is a participant in the ASHP Pharmacy Practice Model Initiative.

Chris Jones, R.Ph Senior Executive Pharmacist ConsultantSix Sigma Advanced Green BeltMcKesson Automation Inc.

An Executive Pharmacist Consultant with McKesson for the past 10 years, Chris Jones has worked with hundreds of hospital pharmacies across the country to improve medication safety and operational effi ciency. Chris has over 22 years of hospital pharmacy experience, including leadership roles as a former Director of Pharmacy and former Clinical Coordinator. He is actively involved at the local, state, and national level of various pharmacy organizations, including past service on the Board of Directors for the North Carolina Association of Pharmacists and as an ASHP delegate. Chris is a two-time winner of the North Carolina Innovative Pharmacy Practice award and a recipient of the McKesson Automation President’s Award of Excellence.

2

Table of Contents

Executive Summary ....................................................... 4

Drivers for Change ......................................................... 6

The Evolving Pharmacist Practice Model .......................... 9

Building Your Business Case ......................................... 15

Conclusions ................................................................ 17

Appendices ................................................................ 17Appendix A: Advantages of Patient-Focused Dispensing

Appendix B: Examples of the Impact of Bar-Code-Based Automation

Appendix C: Business Realization Measurements

Appendix D: Things to Keep in Mind

3

Executive SummaryWhile electronic health records (EHR) have garnered a signifi cant amount of attention from U.S. hospital administrators, bar-code-based medication systems have quietly gone about doing their job of protecting patients, improving effi ciency, and containing costs.

The implementation of bar-code-based systems in the hospital is both good medical practice and good business. Several studies have shown that bar-code technology can reduce errors in medication dispensing, and this message has obviously hit home with hospital administrators and Directors of Pharmacy. In one survey, a signifi cant 41% of hospitals responding were using bar-code medication administration in 2010.1

Bar-code readiness is defi ned as having implemented the systems that serve as the foundation leading to full, enterprise-wide bar-code medication administration (BCMA) and bar-code, electronic medication administration record (MAR) systems. By this defi nition, hospitals vary widely in terms of their bar-code readiness. We believe this will change, as more hospitals implement the appropriate systems. This will be largely driven by three important developments:

1) Requirements of the Patient Protection and Affordable Care Act (H.R. 3590). Beginning in 2013, this legislation will begin to penalize hospitals that do not meet performance measures established by the Centers for Medicare and Medicaid Services (CMS). Sixty-fi ve percent of those measures are related to medication use and safety; further implementation of bar-code-based technology will make it easier for hospitals to maintain full reimbursement.

2) Greater clinical involvement by hospital pharmacists. Pharmacist involvement in patient care has been widely accepted as a way to improve patient outcomes. In fact, 97.3% of hospitals responding to the 2009 American Society of Health-System Pharmacists (ASHP) national survey of hospital pharmacy practice have pharmacists regularly monitoring medication therapy in some capacity.2 According to an analysis of 298 studies published in the October 2010 issue of the journal Medical Care,3 pharmacist participation in patient care was associated with a nearly 50% decrease in adverse drug reactions, along with fewer medication errors, improved patient compliance with drug regimens, higher overall quality of life scores, and improved outcomes, including better diabetes control, lower blood pressure, and lower cholesterol. Bar-code-based pharmacy automation is largely responsible for freeing pharmacist time and allowing them to assume expanding clinical responsibilities. This continuing trend points to further adoption of bar-code systems moving forward.

1 State of Pharmacy Automation. (2010, April). Pharmacy Purchasing & Products. 8(4).

2 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Monitoring and patient education—2009. Am J Health-Syst Pharm. 2010; 67:542-58.

3 Chisholm-Burns MA, Kim Lee J, Spivey CA, Slack M, Herrier RN, Hall-Lipsy E, Graff Zivin J, Abraham I, Palmer J, Martin JR, Kramer SS, Wunz T. US pharmacists’ effect as team members on patient care: systematic review and meta-analyses. Medical Care. 2010; 48(10):923-33. 4

3) The effect on the bottom line. Bar-code-driven automation helps reduce the incidence of adverse drug events (ADEs) and avoid their associated costs; can increase revenue through better medication charge capture; and also can result in reduced medication inventory, labor effi ciency, and other savings. Few hospitals are in a position to ignore this collective positive impact on their balance sheet,4 making it highly probable that bar-code readiness will gain increasing attention in hospital board rooms and executive offi ces.

Economics and patient centricity, then, make a strong case for bar-code readiness as the essential requisite step toward bar-code-driven dispensing technology and BCMA. Given the length of time needed for planning and implementing bar-code-enabled systems, there is some urgency to doing so in advance of H.R. 3590 taking effect. It is also worth noting that bar-code readiness meets the defi nition of “meaningful use” described in H.R. 1, the American Recovery and Reinvestment Act of 2009, making some or all of a bar-code readiness initiative eligible for federal funding. Hospitals should understand, however, that the stimulus package does not fund the introduction of new systems, only systems already under consideration. For this reason, now is the time for Directors of Pharmacy to engage with C-level administrators to formally acknowledge bar-code readiness and BCMA projects and initiate project planning stages.

Achieving bar-code readiness with bar-code-assisted distribution systems in the pharmacy frees pharmacists from other tasks and can signifi cantly increase the time they have available for clinical duties that improve patient care. At the same time, these technologies also increase patient safety through greater accuracy in the medication distribution process within the hospital.

In this white paper, you will learn:• how to overcome common cost and technology obstacles to achieving bar-code readiness;• how to align bar-code processes with administration’s outcomes-based goals; and• quantifi able benefi ts of bar-code readiness at hospitals that have successfully established the essential bar-code medication foundation.

According to an analysis of

298 studies...pharmacist

participation in patient care

was associated with a nearly

50% decrease in adverse

drug reactions.

4 Kiselev M. Hospitals in Distress: How the Economy has Affected Financing of Health Care. Illinois Business Law Journal. March 16 2010, 15:34.


Percentage of Hospitals Using BCMA, 2002-20095

2003 20042002 2005 2006 2007 2008 2009

1.5%

25.1%

4.4%3.2%

9.4%

13.2%

19.6%

27.9%30%

20%

10%

0%

5

Drivers for ChangeThe Patient Protection and Affordable Care Act (H.R. 3590) is a signifi cant driver for change faced by hospitals, and should serve as a major impetus for technology investments related to bar-code readiness. The bill establishes value-based purchasing of hospital services, emphasizing quality of care over quantity of care. This will have fi nancial repercussions for hospitals. Beginning in 2013, for example, Medicare and Medicaid reimbursements will begin to be awarded – or withheld – based on a hospital’s score according to performance measures determined by the government. Fully 70% of the measures involved are Centers for Medicare and Medicaid Services (CMS) Performance Measures; the remaining 30% will be based on the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey of patient priorities. The percentage of reimbursement at risk begins at 1% in FY13, rising to 1.25% in FY14, 1.50% in FY15, and so on. In a mid-sized hospital, 1% of reimbursement can total millions of dollars in a single year, so meeting or exceeding performance standards will be critical.

This aspect of the bill is, in itself, a convincing case for investment in pharmacy automation and bar-code readiness. Analysis of the CMS measures shows that two-thirds of care indicators (27 of 40) are related to medication use. This comprises more than half of the total performance score on which reimbursement will be based. In addition, 15 of 26 indicators of the Joint Commission Center for Transforming Healthcare’s quality measures are also medication-related.

Centers for Medicare and Medicaid Services (CMS) Performance Measures

OTHER

CARE INDICATORS RELATED TO

MEDICATION USE

27

13

6

Pneumonia

Heart Failure

Acute MI

Surgical Care Improvement Project

Hospital Outpatient Measures

Children’s Asthma Care

Pregnancy and Related Conditions

Process of Care Measures

Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)

5 of 7

2 of 4

6 of 9

6 of 10

5 of 7

2 of 3

0 of 3

27 of 40

1 of 10

Medication-Related Indicators

Centers for Medicare and Medicaid Services (CMS) Performance Measures: Medication-Related Indicators

H.R. 3590 and the CMS measures align the interests of hospital administrators with those of the pharmacy. Medications are used in nearly every area in the hospital, all of which would benefi t from safe systems that employ bar-code technology. Bar-coded medication administration, partially enabled and strongly supported by pharmacy automation, addresses enterprise-wide medication issues that can dramatically affect performance scores – more so, for example, than computerized physician order entry (CPOE). The drug administration step is the last in the medication-use system where a medication error can be detected and a potential adverse drug event (ADE) prevented. Indeed, a 2005 study showed that the use of bar-code technology reduced the rate of potential ADEs due to dispensing errors by 63%.6 BCMA thereby provides a wider-ranging safety net in the medication-use process and greater potential safety gains, with a greater potential positive impact on performance scores.

The decrease in ADEs has a signifi cant fi nancial aspect, as well. Each ADE equals $2,2007 in additional hospital costs; each preventable ADE, $8,750.8 At a hospital dispensing millions of medication doses every year, bar-code technology can prevent thousands of ADEs. The savings can run into millions of dollars annually.9

At a hospital dispensing millions of medication doses every year, bar-code technology can prevent thousands of ADEs. The savings can run into millions of dollars annually.

6 Poon E, Cina J, Churchill W, Mitton P, et al. Effect of Bar-code Technology on the Incidence of Medication Dispensing Errors and Potential Adverse Drug Events in a Hospital Pharmacy. AMIA Annual Symposium Proceedings. 2005.

7 Classen DC, Pestotnik SL, Evans RS, Lloyd JF, Burke JP. Adverse drug events in hospitalized patients: excess length of stay, extra costs, and attributable mortality. JAMA. 1997; 277:301-306.

8 Aspden P, Wolcott J, Palugod R, Bastien T. Preventing Medication Errors. Institute Of Medicine. 2006; 115-117.

9 Poon E, Cina J, Churchill W, Mitton P, et al. Cost-Benefi t Analysis of a Hospital Pharmacy Bar Code Solution. Archives of Internal Medicine. April 23 2007. 7

Perinatal Care (PC)

Hospital Based Inpatient Psychiatric Services (HBIPS)

Stroke National Hospital Inpatient Quality Measures (STK)

Venous Thromboembolism Measures (VTE)

Process of Care Measures

1 of 5

2 of 7

7 of 8

5 of 6

15 of 26

Medication-Related Indicators

Joint Commission Center for Transforming Healthcare: Medication-Related Indicators

In addition to the potential for safety gains realized by bar-code-driven pharmacy automation equipment, pharmacy automation and bar-code readiness are also critical to achieving meaningful use under the American Recovery and Reinvestment Act of 2009 (H.R. 1). Meeting the meaningful use requirement is necessary to receiving government funding for hospital technology projects. Bar-code infrastructure and effective closed-loop medication management solutions are considered “meaningful” since they are necessary for successful deployment of clinical systems that directly relate to the Federal government’s overall healthcare goals.

The signifi cant importance of medication issues to the enterprise also argues for pharmacy involvement in technology decisions currently made at the executive level, even when those decisions reach beyond the pharmacy. Certainly, for any technology that may in any way touch the administration of medication, it is only logical. Additionally, in most hospitals, the pharmacy has consistently been an early adopter in the implementation of technological advances, often developing a project management skill set that can contribute to the overall planning of the system and is useful as additional technologies are implemented. The value of the pharmacy in examining these solutions should not be undervalued.

Also driving change is ASHP, an early and consistent leader in recognizing the game-changing aspects of a bar-code-based medication system. ASHP’s offi cial position on bar-code readiness and BCMA states,

“The American Society of Health-System Pharmacists encourages hospital and health-system pharmacies to incorporate bar-code scanning into inventory management, dose preparation and packaging, and dispensing of medications. The purpose of such scanning is to ensure that drug products distributed, deployed to intermediate storage areas, or used in the preparation of patient doses are the correct products, are in-date, and have not been recalled.”10

10 ASHP Statement on Bar-code Verifi cation During Inventory, Preparation, and Dispensing of Medications. June 2010. 8

The Evolving Pharmacist Practice ModelAs the use of bar-code-based pharmacy automation systems has spread, the role of the hospital pharmacist has been changing. The hospital pharmacist’s role is becoming more an integrated position with increased clinical responsibilities,11 as automation allows the delegation of many tasks that do not require clinical judgment to well-trained technicians, freeing pharmacist time. Indeed, the ASHP’s Pharmacy Practice Model Initiative sees pharmacists providing ever higher levels of patient care – including medication prescribing as part of a collaborative team – as certifi ed pharmacy technicians assume virtually every distributive function that does not require clinical judgment.

— Inpatient Pharmacists Routinely Monitor Medication Levels

— Pharmacists Have Authority to Order Initial Serum Medication Level

— Pharmacists Have Authority to Adjust Dosage for Routinely Monitored Medication

— Pharmacists Are Notifi ed When Medication Levels Fall Outside of Therapeutic Range

Pharmacist Involvement in Therapeutic Drug Monitoring for Inpatients11

2003 20062000 2009

75.6 80.1

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

75.5

87.8 92.3

79.2

37.9

69.1

73.2

47.3

63.3

64.6

35.5

58.6

63.1

36.5

11 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Monitoring and patient education—2009. Am J Health-Syst Pharm. 2010; 67:542-58. 9

Studies involving care programs with expanded clinical involvement by pharmacists, such as The Asheville Project,12-15 are showing signifi cant improvement in clinical outcomes and may be encouraging hospitals to accelerate the trend. In the Asheville study involving hypertension and dyslipidemia, for example, the period of pharmacist clinical involvement showed a 53% decrease in risk of a cardiovascular event (CV) and greater than 50% decrease in risk of a CV-related emergency department or other hospital visit.12

In the 2009 ASHP survey, the trend toward pharmacist clinical involvement is clear:• 64.7% of hospitals used clinical generalists in an integrated pharmacy practice model. • 97.3% used pharmacists to regularly monitor medication therapy, with nearly 50% of those pharmacists monitoring 75% or more of patients.• In more than 92% of those surveyed, pharmacists monitor serum medication concentrations or surrogate markers; in 80.1%, pharmacists can order initial serum concentrations, and in 79.2%, adjust serum dosages.• In 27.9% of hospitals, pharmacists provided medication education to patients.16

Activities Implemented to Improve Patient Outcomes

As the value of the pharmacist’s clinical involvement has become clearer, hospitals have turned to various methods to stimulate pharmacist clinical practices. For instance, during the past several years, common methods included promoting the value of clinical pharmacy services, increasing access to patient-specifi c data, and expanding pharmacy technician responsibilities. Not surprisingly, considering the role of automated systems in freeing pharmacists to assume more clinical duties, 29.9% of hospitals have implemented automated dispensing systems. In addition, 35.4% expanded pharmacy technician responsibilities, and 23.5% redeployed pharmacists to patient care units. This latter number is especially signifi cant since, according to an analysis of 298 studies published in the October 2010 issue of the journal Medical Care,17 pharmacist participation in patient care was associated with a nearly 50% decrease in adverse drug reactions, along with fewer medication errors, improved patient compliance with drug regimens, higher overall quality of life scores, and improved outcomes including better diabetes control, lower blood pressure, and lower cholesterol.

10

12 The Asheville Project: Clinical and Economic Outcomes of a Community-Based Long-Term Medication Therapy Management Program for Hypertension and Dyslipidemia. Journal of the American Pharmacists Association. January/February 2008.

13 The Asheville Project: Long-Term Clinical, Humanistic, and Economic Outcomes of a Community-Based Medication Therapy Management Program for Asthma. Journal of the American Pharmacists Association. March/April 2006.

14 The Asheville Project: Long-Term Clinical and Economic Outcomes of Community Pharmacy Diabetes Care Program. Journal of the American Pharmacists Association. March/April 2003.

15 The Asheville Project: Participants’ Perceptions of Factors Contributing to the Success of a Patient Self-Management Diabetes Program. Journal of the American Pharmacists Association. March/April 2003.


17 Chisholm-Burns MA, Kim Lee J, Spivey CA, Slack M, Herrier RN, Hall-Lipsy E, Graff Zivin J, Abraham I, Palmer J, Martin JR, Kramer SS, Wunz T. US pharmacists’ effect as team members on patient care: systematic review and meta-analyses. Medical Care. 2010; 48(10):923-33.

The argument can be made for a correlation between the use of automated dispensing technology and the ever-greater share of dispensing responsibilities assumed by technicians over the past several years. Bar-code-based automation greatly reduces the chances of error and requires signifi cantly less expert human supervision. This would allow moving the dispensing process into the purview of non-pharmacist personnel and enabling pharmacists to evolve into more integrated roles. The cumulative growth of both dispensing automation and technician responsibilities since 1997 may well have laid the groundwork for the accelerated expansion in the number of hospitals employing an integrated pharmacy practice model – and the broadening of pharmacist practice area involvement and infl uence – seen in the most recent ASHP studies.

Freeing Pharmacists to Be Pharmacists

Technology is increasingly available to support the safe use of medication. Its use continues to improve the medication-use system and is at the heart of a classic “virtuous circle”: as the pharmacy automates, pharmacists are freed for clinical work, improving patient care, thereby helping to support further automation, and so on.

The use of automated dispensing cabinets has become widespread, and while BCMA and CPOE technologies are being utilized in less than half of U.S hospitals, their use is decidedly growing, with BCMA adoption outpacing CPOE in 2009. CPOE systems with clinical decision support systems were in place in 15.4% of hospitals in the 2010 ASHP survey, BCMA systems in 27.9%, smart infusion pumps in 56.2%, and complete EMR systems in 8.8%.18

— Percentage of hospitals using BCMA

— Mean number of integrated pharmacist positions per 100 occupied beds

Comparative Growth of BCMA and Integrated Pharmacist Practice Model18

5.1

2006 20072005 2008 2009

7.94

5.51

6.71

9.87

9.4 13.2

19.6

25.1 27.9

11 18 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Monitoring and patient education—2009. Am J Health-Syst Pharm. 2010; 67:542-58.

Bar-code readiness and BCMA initiatives add an additional safety check to the fi nal step in the medication-use system, and this no doubt explains to a large degree the speed with which they have been and are being adopted:

• 27.9% of U.S. hospitals live on BMCA systems in 2009, compared to just 1.5% in 2002*• 233% growth in central pharmacy automation systems, 1999-200620

• 500% growth in “machine-readable coding”* used to verify doses before dispensing, 2002-200821

• 61% growth in hospitals outsourcing unit-dose bar-code packaging, 2002-200821

• 86% of the 500 most frequently prescribed oral solid medications are available in manufacturer unit-dose, bar-coded packaging22

* Robots, carousel systems, and sometimes manual unit dose pick stations use machine-readable coding for safety and inventory verifi cation purposes.

ROBOTICS

CAROUSEL

AUTOMATED DISPENSING CABINETS

BAR-CODE PACKAGING

42%

77%

n/a

66%

47%

72%

n/a

64%

54%

69%

90%

71%

2009 20102008

Technology Use, Inpatient Dispensing19



21 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Dispensing and administration—2008. Am J Health-Syst Pharm. 2009; 66:926-46.

22 McKesson Health Systems data report 2010. Oral solids sales data.

23 State of Pharmacy Automation. (2010, April). Pharmacy Purchasing & Products. 8(4). 12

BAR-CODE DRUG ADMINISTRATION

CPOE

29%

28%

33%

31%

41%

35%

2009 20102008

Technology Use, Prescribing and Drug Administration23

Pressure for 24/7 Pharmacy Service Coverage

Another argument for bar-code readiness can be inferred from the rise in 24/7 pharmacy service coverage. According to the 2010 ASHP survey, 41.2% of hospitals provided 24-hour inpatient pharmacy services, up dramatically from 30.2% in 2005. The average number of hours per week pharmacy departments were open and available to provide services has also increased, from 101 hours in 2005, to 103.8 hours in 2007, to 106.2 hours in 2008, to 112 hours in 2009.24-28

From strictly a patient care point of view, around-the-clock on-site pharmacy services are preferable to more limited hours of operation, even with the inevitable drop off of demand during nighttime hours. The primary barrier to extended or 24/7 coverage has traditionally been fi nancial, since more hours signifi cantly increase pharmacy labor costs without necessarily generating commensurate medication services income. Over the past fi ve years, perhaps the largest single change in many hospitals is the increased use of pharmacy automation. That increase and the growth in 24-hour inpatient pharmacy services have been simultaneous, suggesting that the effi ciency, staffi ng, and cost-reduction benefi ts of automation have been notable enablers of longer pharmacy hours.

This seems more than plausible when comparing the variation in extended hours growth among hospitals of different sizes. As might be expected, large hospitals with 600 or more staffed beds had the highest incidence of 24-hour pharmacy services, at 98.4%, while only 8.8% of the smallest hospitals (fewer than 50 staffed beds) operated around-the-clock pharmacies. Certainly, need plays a signifi cant part in such a wide discrepancy, but it must also be noted that larger hospitals are far more likely to employ pharmacy automation than the smallest institutions.

Supporting the Drivers for Change

In terms of pharmacist duties, bar-code automation technology is enabling change that is being driven by the need for increased patient safety (H.R. 3590) and also for process effi ciency as a response to cost constraints.

The effects of central pharmacy automation solutions are allowing patient monitoring to increasingly be performed by integrated pharmacists performing both distributive and clinical roles. The use of distributive pharmacists to monitor medication therapy has declined and the use of other pharmacists to monitor medication therapy has steadily increased over the past nine years. In 2000, 49.2% of hospitals had distributive pharmacists monitor medication therapy, 40.6% used clinical pharmacists, 51.3% used integrated pharmacists, 9.4% used pharmacy residents, and 24.5% used student pharmacists.28


25 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Prescribing and transcribing—2007. Am J Health-Syst Pharm. 2008; 65:827-43.



28 Pedersen CA, Schneider PJ, Scheckelhoff DJ. ASHP national survey of pharmacy practice in hospital settings: Monitoring and patient education—2009. Am J Health-Syst Pharm. 2010; 67:542-58. 13

In 2009, of the 97.3% of facilities where pharmacists regularly monitored medication therapy for patients, 44.6% had distributive pharmacists regularly perform this function, 44.6% used clinical pharmacists, 65.2% used integrated clinical–distributive pharmacists, 13.5% used pharmacy residents, and 38.3% used student pharmacists.29

Pharmacist involvement in medication safety initiatives, including technology adoption, continues to be strong, interconnected to others and focused on the medication-use system. Interdisciplinary committees reviewed ADEs in 89.3% of hospitals. Prospective analysis such as failure modes and effects analysis was conducted in 66.2% of hospitals and retrospective analysis such as root cause analysis was conducted in 73.6%. Safety culture had been assessed by 62.9% of hospitals. ADEs were reported to external groups by 60.7% of hospitals.29

Looking Ahead

The 2010 ASHP National Survey reveals pharmacy directors’ future plans for the pharmacy practice model in their hospitals. Directors from all sizes of hospitals expected a transition toward a more patient-centered, integrated model and away from a centralized drug distribution-centered model. Some pharmacy directors at smaller hospitals envisioned moderate growth in the use of a clinical specialist-centered model, while some pharmacy directors at larger hospitals envisioned a moderate decline in the use of a clinical specialist-centered model.

To keep pace with the needs of patients, the desires of personnel, and technological changes, 46.7% of hospital pharmacy departments were working to change their practice models or had already done so in the past three years. The most common barriers were a lack of pharmacist staff resources, a lack of pharmacy staff with needed training, and resistance to change from current staff. Other barriers included a lack of automation to support change, a lack of hospital leadership support, and a lack of qualifi ed technician staff. Only 9.7% of hospitals had not experienced barriers to their practice model changes. Staff issues represented signifi cant challenges to envisioned practice models of hospital pharmacy directors.29

14

DRUG DISTRIBUTION-CENTERED

PATIENT-CENTERED,INTEGRATED

CLINICAL SPECIALIST-CENTERED

64.7

10.9

83.6

12.3

Future2009

Current and Expected Future Structure of Pharmacy Practice29

24.4 4.1


Building Your Business CaseThe ASHP organizes the medication-use process into six areas: prescribing, transcribing, dispensing, administration, monitoring, and patient education. Examining the dispensing function in detail illustrates how bar-coding across these multiple steps and hand-offs can ensure accuracy, resulting in improvements in safety, operational effi ciency, and inventory management. This makes bar-code readiness and bar-code-based systems vital to any patient-focused dispensing initiative or patient-centric business model.

Bar-code scanning has been shown to increase safety and reduce errors at all of these dispensing points:

• Receipt from the distribution center• Stocking into automation systems or manual pick stations• Dispensing in pharmacy for patient-specifi c purposes • Dispensing in pharmacy for cabinet restocking purposes• Quality assurance checking by pharmacists or technicians (tech-check-tech)• Restocking at automated medication cabinet• Dispensing at automated medication cabinet• Delivery to nurse server, inpatient medication cabinet, or workstation on wheels near patient room

The Correlation Between Safety and Savings While it’s widely accepted that pharmacy bar-code systems reduce the incidence of dispensing errors, there are some who question the fi nancial implications of this increased safety. In 2006, a fi ve-year study was completed at a “large, academic, nonprofi t tertiary care hospital pharmacy”30 in order to assess the actual costs and benefi ts of a pharmacy bar-code system implementation.

The results were impressive. Over the fi ve years of the study, costs for implementing and maintaining the pharmacy bar-code system totaled $2.24 million. The dispensing error rate after system implementation was reduced by 31%. Even more striking, the potential ADE rate dropped by 63%.30 As noted earlier in this paper, additional hospital costs per ADE are $2,200 and $8,750 per preventable ADE. In terms of avoided ADEs alone, the hospital realized annual savings of $2.20 million over the course of the study. The net benefi t after fi ve years was $3.49 million. Break-even was reached within one year of the system becoming fully operational.30

Over the fi ve years of the study, bar-code system costs totaled $2.24 million. The net benefi t after fi ve years was $3.49 million. Break-even was reached within one year.

30 Poon E, Cina J, Churchill W, Mitton P, et al. Cost-Benefi t Analysis of a Hospital Pharmacy Bar Code Solution. Archives of Internal Medicine. April 23 2007. 15

Granted, the hospital in question is a large facility, dispensing more than six million medication doses annually. However, the research found that implementation of a similar bar-code system at a smaller hospital would show a signifi cant return on investment (ROI), as well. Even with changes in details of system implementation and use, such as leasing, purchasing, or repackaging costs, any hospital with a minimum of 1.75 million annual doses could expect to realize a positive ROI within a fi ve-to-ten-year period.31

16

— Benefi ts — Recurring costs — 1-time costs

Cost and Benefi ts of Pharmacy Bar Coding31

2 31 4 5

$600,000

$400,000

$200,000

$0

-$200,000

-$400,000

Cost

/Ben

efi t

Years

31 Poon E, Cina J, Churchill W, Mitton P, et al. Cost-Benefi t Analysis of a Hospital Pharmacy Bar Code Solution. Archives of Internal Medicine. April 23 2007.

ConclusionsThe question no longer is if hospitals will become bar-code ready but, simply, when. The economic and professional drivers, along with real-world bar-code readiness and BCMA results, are making it an inevitability. The performance demands of H.R. 3590 and the demonstrated patient care benefi ts of increased clinical involvement by pharmacists are creating a perfect storm that aligns the goals of administrators and the pharmacy. Increased pharmacy automation and increased pharmacy involvement in enterprise technology decisions are the logical outgrowth.

Pharmacy automation and bar-code readiness are also critical drivers in achieving meaningful use under H.R. 1. However, hospitals should bear in mind that the stimulus package does not fund the introduction of new systems, but rather is meant to accelerate the adoption and implementation of systems already under consideration. For this reason, now is the time for Directors of Pharmacy to engage with C-level administrators to formally acknowledge bar-code readiness and BCMA projects and initiate project planning stages, if they have not done so already.

We are in the midst of an important and exhilarating period for health-system pharmacists and the institutions and patients they serve. Bar-code readiness is central to the trends already in progress, and will become only more important to the entire enterprise in the years directly ahead.

AppendicesAppendix A: Advantages of Patient-Focused Dispensing

Automated patient-centric dispensing: • Assures proper patient-centered pharmacotherapy• Establishes effective drug use and control• Establishes bar-code foundation necessary for BCMA• Improves safety by scanning every medication before leaving pharmacy• Reduces pharmacist dispensing labor, freeing pharmacists for patient-specifi c roles• Reduces nursing labor by reducing med-prep time and multiple trips to patient rooms• Brings meds closest to patient (WOWs, nurse servers, etc.)• Signifi cantly reduces cabinet overrides (including overrides of medications that cannot be scanned which reach patient bedside without pharmacist oversight)• Reduces nursing complexity, interruptions, and workarounds (associated with cabinets) • Positions hospitals for “just in time” delivery to coincide with medication administration• Introduces standardization and scalability (census increases, fi ll for multiple sites, etc.)• Increases pharmacy technician labor effi ciency• Minimizes duplicative medication inventory on nursing units and waste associated with expired medications• Provides capital cost certainty (no cabinet scope creep)• Eliminates variability in medication processes • Delivers fast time to value and strong ROI

17

Appendix B: Examples of the Impact of Bar-Code-Based Automation

Evergreen Hospital Medical CenterKirkland, Washington250-bed community-based facility

• Improved medication dispensing accuracy to 99.9%• Conducted nearly 24,000 clinical interventions annually, saving approximately $1.9 million• Cut fi rst dose fi ll labor by 78%• Reduced cart fi ll labor by 72%• Decreased crediting labor by 50%• Strengthened narcotics management

Shore Memorial HospitalSomers Point, New Jersey300-plus bed, not-for-profi t acute care facility

• Established bar-code foundation to support patient safety, productivity, and inventory management initiatives • Projected 28% ROI in less than fi ve years, and a project net present value of more than $700,000• Projected 3% annual revenue increase over ten years (totaling $220,000) as a result of accurate charge capture of fl oor stock and controlled substance medications• 220% increase in documented clinical interventions by pharmacists, resulting in additional yearly savings of $416,000 through reduced ADEs• 90% reduction in pharmacist checking labor • 42% increase in medication inventory turns, effectively cutting inventory costs by 30%, and saving $166,000• 80% reduction in the number of medication stockouts on nursing units• 93% reduction in time required for narcotics reconciliation

Comanche County Memorial HospitalLawton, Oklahoma283-bed community hospital

• Established bar-code foundation to support patient safety, productivity, and inventory management initiatives• Projected 42% ROI in less than eight years, with 7% cost of capital and project net present value of more than $17 million• Projected eight-fold increase in time spent by pharmacists on clinical intervention activities, resulting in annual 10% reduction in ADEs and related costs• 90% reduction in pharmacist checking labor • 33% improvement in technician picking labor and 33% decrease in technician training time • 92% decrease in missing doses and 75% decrease in medication cabinet stockouts• $26,000 savings per year through bulk medication purchasing• $80,000 gain in additional annual revenue through automated medication charge capture during administration• 54% reduction in annual cost of medication write-offs due to expired medications

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St. Dominic-Jackson Memorial HospitalJackson, Mississippi535-bed, not-for-profi t, acute care hospital

• Established closed-loop, bar-code-based system throughout medication-use process• Immediate BPOC 99.9% scan rate enabled by bar-code automation foundation• 801% increase in the number of pharmacist-patient interventions over fi ve years• Improvement from 0% to 78% of pharmacist time spend on clinical activities • $1.8 million in annual cost avoidance through pharmacist-patient interventions• $204,000 reduction in cost of medication inventory over fi ve years

Hybrid Distribution Case Study(Multiple-hospital analysis of pharmacy-to-bedside hybrid medication distribution system by Shack & Tulloch, Inc.)730-bed Spartanburg Regional Medical Center, Spartanburg, South Carolina649-bed Mississippi Baptist Medical Center, Jackson, Mississippi512-bed The Medical Center, Bowling Green, Kentucky (contains three hospitals)

• 99% robot dispensing accuracy• 96% reduction in picking errors with automated carousel• 50% reduction in missing medications • 75% reduction in expedited medications• 10% reduction in ADEs• 60% increase in technician productivity• 39% increase in pharmacist time for clinical activities• 8% increase in nursing time with patients• 75% reduction in expired medication costs • 30% reduction in medication purchase costs• 15% improvement in medication inventory costs• 40% reduction in cabinet assets• 58% composite ROI (6-year project life, no terminal value)

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Appendix C: Business Realization Measurements

An oft-repeated management mantra says, “You can’t manage what you don’t measure.” Here are some common metrics pharmacies use for process improvement and for reporting to hospital administration. Tracking these and other relevant metrics can help reassure administrators that pharmacy automation and bar-code readiness have been worthwhile investments.

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Length of Patient Stay

Pharmacist Labor

Tech Labor

Nurse Labor (Vending, Travel, Patient Care Time, Reduced Steps/ Improved Workfl ow, Time, and Motion)

Medication Inventory (Turns, Stockouts, etc.)

Medication Turnaround Time

Medication Availability for Administration

Technology ROI/TCO

Technology Integration with Existing Systems

Unit-Dose Readiness of Meds (Scan Readability)

Employee Satisfaction (Nurse, Pharmacy, Physicians)

Patient Satisfaction

Employee Turnover/Employment Stabilization

Days

$/hr.

$/hr.

$/hr.

$

% or #/hr.

% or #/hr.

$/5 years

$/interfaces

%

%

%

%

Unit of MeasureMedication Dispensing Stage

Appendix D: Things to Keep in Mind

Pharmacy automation supports Bar-Code Medication Administration• Positive bar-code identifi cation of drug and patient at point of care• Supports IT strategic plan and provides safety net for nursing• Helps ensure the “fi ve rights” – right medication, patient, time, dose, and route

Positive BCMA results are only possible if the right infrastructure is in place• Bar-coded medications• Bar-coded patient ID bracelets• Bar-coded employee badges• Wireless network• Point-of-care hardware

Some common challenges/ barriers• Competing priorities between clinical/quality measure work and order entry requirements for pharmacists• Bar-code packaging burden• Changing NDC codes requiring database changes• Space – balance needs for technology, medication storage, and workfl ow• Hard to keep the vision over many years

Operational tips for bar code use• Scan entire order prior to bringing in pharmacy • Identifi es NDC changes to correct in database for scanning • Identifi es product changes due to drug shortages that must be added to database• Scan test all drugs after packaging – assures “scanability” at bedside• Continually optimize robotics and ADC inventory, check SA/LA drugs in matrix drawers• Make one technician responsible for packaging to create equipment “expert”

Lessons from the real world• Engage with the C-Suite early, educating them on the benefi ts and challenges of automation and bar-code readiness• Talk about the changes often – staff need time to get used to process change• Communicate the benefi ts – people buy in easier if it helps patients and supports a better practice model• Automation doesn’t equal faster, just safer• Go back to C-Suite and show them the positive outcomes – remind them they made a good decision• Share with the media

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McKesson Corporation — Automation500 Cranberry Woods DriveCranberry Twp., PA 16066

1.800.594.9145

www.mckesson.com

© 2011 McKesson Corp.

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