CONFIDENTIAL – PROPERTY OF MEDASSETS. MedAssets® is a registered trademark of MedAssets, Inc....

CONFIDENTIAL – PROPERTY OF MEDASSETS. MedAssets® is a registered trademark of MedAssets, Inc. Copyright MedAssets, 2009. All rights reserved.

Automation in Hospital Pharmacy:Planning, Selection, Impact on Purchasing Practice

Kelly Froisness, CPhTPharmacy BuyerCHRISTUS Hospital- St ElizabethBeaumont, TX

Sam Colletti, RPhDirector, Clinical PharmacyMedAssets

test

Test ………………………………………………..

Confidential – Not For Distribution2

1999 two historic Catholic non-profit charities formed CHRISTUS Health:• Sisters of Charity Health Care System• Incarnate Word Health System

Mission: To extend the healing ministry of Jesus Christ• Top 10 Catholic health system in U.S.• 43 hospitals / 16 long-term acute care

facilities across 8 states and Mexico• Net patient revenues exceeding $2.6

billion• Assets totaling more than $4.3 billion• Supplies, Purchased Services, and

Energy $957million

CHRISTUS Health

Test………………………

Introduction3

Automation and the acquisition of capital equipment have become essential to the hospital pharmacy in recent years

Greater than 95% of all hospital pharmacies have some level of automation and 60% to 70% of facilities currently expect significant increases in their automation budgets over the next few years

Objectives4

Outline the progression of automation in hospital pharmacy

Describe the strategic planning process for incorporating automation into current and future practice

Define the selection process for automation that incorporates the clinical, dispensing, and purchasing functions of the pharmacy department Carousels Packagers

Discuss the impact of automation on purchasing practices A Buyer’s Perspective

History of Automation in Hospital Pharmacy

5

Most texts refer to the early efforts in the 1960s as the beginning of Automation.

1970s- almost entirely manual processes. The largest facilities utilized main frames or mini-computers solely for billing. There were initial attempts at unit dose packaging. The most advanced technology was the memory typewriter.

History of Automation in Hospital Pharmacy6

1980’s The progress of automation in general is tied to the

emergence of PC’s in the pharmacy workplace Initially focused on IV labeling to replace the typewriters Beginning of simple programs that could balance TPN ions or

do simple statistics Much of the software was written by pharmacists for use

locally then passed on to others The beginnings of ADT/Order Entry/Profiles emerged as the

storage capacity and speed increased The seeds of much of today’s pharmacy automation come

from this decade

History of Automation in Hospital Pharmacy7

1990’s – Explosion of Integrated Hospital Systems which included pharmacy Elimination of manual patient profiles for almost everyone Introduction of ADMs, Computerized Clinical Information

Sources, Controlled substance inventory management, and Carousel, BMV , bar coding technology

All of these efforts needed years of experimentation and improvement to get to the current levels

Technology Applied in the Medication Use Process8

Prescribing Clinical decision support software Computerized prescriber order management(CPOM)

Dispensing Carousel technology Centralized robotic dispensing technology Centralized narcotic dispensing technology Decentralized automated dispensing cabinets IV and TPN compounding devices Pneumatic tubes systems Unit Dose repackaging systems

Administration Bar Code medication administration technology Clinical decision support infusion pumps

Monitoring Electronic clinical documentation systems Web based compliance and disease management tracking systems

The Strategic Planning ProcessImpact on Deployment of Automation

Strategic Planning

10

Successful Planning and Implementation Integration with Facility/System Capital Plans

It is necessary to establish a long range vision of pharmacy services that can be consistently expressed to the C Suite

A formal plan provides long term continuity despite staff changes A formal plan provides specific objectives to develop and the ability

to present a single vision of pharmacy services over time Solicitation of support for other disciplines that can benefit from

changes in pharmacy Long term outlook for pharmacy services

Equipment can tie you to specific dispensing methods for years Pharmacy is not perceived as requiring capital funding Obtaining capital or operations funding for a large project can

take several years to get approval

Strategic Planning

11

Define current and future states of both clinical services and dispensing operations for your facility

Define tools needed to support those servicesProject realistic timelines for implementation of

servicesEvaluate alternate pathways to achieve goalsFive and ten year goals are realistic approaches

the best chance for approval and successful implementation know your limits and make proposals fit Present proposals to fit your audience (CFO talk not Pharmacy

talk)

2006 Strategic Pharmacy Plan

Strategic Goal Initiative DescriptionCompletion

DateComments

4. Increase the extent to which pharmacy has a significant role in improving the safety of medication use.

Integrate the pharmacy based medication management safety projects into the overall Christus Patient Safety Program.

JCAHO and patient Safety

2006/2007

An annual assessment of all facilities processes for compounding sterile medications is completed, consistent with established standards and best practices.

Data is complied and reviewed and reported by the pharmacy resource group to ensure consistent results. 2007

Also see strategic goal #3 initiative.

At lest 95% of routine medication orders are reviewed for appropriatness by a pharmacist before administration of the first dose.

Specific exceptions written for emergency and physician administration with retrospecitve review. 2008

Each pharmacy will participate in ensuring that patients receiving antibiotics as surgical prophylaxis will have their prophylactic antibiotic therapy discontinued within 24 hours after the surgery end time.

2007

This is a reportable core measure for each facility.

All pharmacy technicians will be certified by the PTCB and/ or the State Board of Pharmacy

Specific guidelines for training, hiring, and development of job descriptions. 2007

5. Create a unified approach to formulary management within the Christus System.

Define formulary management within the Christus enviornment. 2006

Develop a collaborative approach of medication management to include practicioners and all relivant members of the healthcare team across the system.

2010

Create a model to review and communicate relevant drug information and utilization protocols to local PNT Committee in consideration of future impact.

2008

Transforming Strategic Plans into Action

13

FacilityStart Date

Go Live Date

ScopeFacility Construction/Plant

Comments

CarouselOral Solid Packager

Liquid packager

Bar Code labeler

Hospital A 12/10 10/11Packager/ Carousel

Brand ZHi-volume Packager

200 canisters

Liquid Packager

Bar Code Printer/ X Software

Considering additional space, engineering for a potential Carousel. Local decisions pending.

Hospital B 11/10 8/11Table Top Packager

NABrand Y Table Top Packager

manualBar Code Printer/ X Software

Move cabinets and shelving only. No new space construction.

Hospital C 9/10 7/11Existing manual

packagingNA Outsource/ Manual manual

Bar Code Printer/ X Software

No construction. Adding new barcode pringter only.

Future Configuration

Timelines for Bedside Medication Scanning

Create specific plans that give everyone a clear picture.Allow staff to weight in and take ownership in the projectGive other involved departments a project scope and timeline

Administration, Finance, Plant OPS/Engineering, IM

Automation that Directly Impacts the Buyer

Carousel TechnologyUnit Dose and Bar Code Repackaging

Systems

CAROUSELS

15

Selection Process

What is a Carousel?16

Carousel Storage Systems are industrial grade hi-density shelving systems with software that meets the specific requirements of hospital pharmacy.

Functional GoalsIncrease dispensing accuracy and patient Safety

Simplify workflow and improve productivityUtilization of barcode process to enhance BMVReduce inventory space requirements up to

60% Reduce inventory on hand and Automate Min Max Robust reporting inventory management

Cartfill or non-Cartfill Distribution

Pharmacy Information

System

Barcode Packager/

Labeler

Static Shelving

& RefrigeratorsDrug

Wholesaler – Supplier

Patient Carts

Returns

Patient Orders

Carousels

Hub Software

Automated Dispensing Unit = ADU

Carousel Selection Guidelines18

HardwareLarge variation in quality and vendors

7,000 to 8,000 pound boxes require engineering consults

Significant redesign of pharmacy workflow

SoftwareThe large variation among pharmacy vendorsInterface Costs are significantRequires hand on demonstration

ServiceService of hardware and software is a major concernSignificant variation is costs related to serviceRecommend doing a 5 year cost cost of ownership when comparing vendors

Carousel Selection Guidelines19

Innovation All vendors do the basic functions, but style and user

interface varies Evaluate each vendor’s product for your unique

requirements and their ability to adapt to your current and future needs.

Equipment Integration Currently for most vendors the Carousel and Hi-volume

packager interface is proprietary

Example 5 Year Total Cost of Ownership Model

20

5 Year TotalCapital Year 1 Total Year 2 Year 3 Year 4 Year 5

EquipmentHardware, Software, Peripherals $150,000

Server & OS Agents etc, printer, workstation $14,000

Vendor Training $3,000

Pharmacy System Interface $33,750

HUB Software Installation $4,000

Hub Shipping Costs $500

Carousel Shipping & Handeling $9,000

Capital Total: $214,250

Operating

Pharmacy System Interface Support $5,000 $5,000 $5,000 $5,000 $5,000 $25,000*Carousel Annual Support-Hardware $8,000 $8,000 $9,225 $9,225 $9,225 $43,675Software Support $18,000 $18,000 $18,000 $18,000 $18,000 $90,000

Operating Total : $31,000 $31,000 $32,225 $32,225 $32,225 $158,675

Total: $245,250Depreciation over 5 years:

Total Year 1 costs capitalized $42,850 $42,850 $47,145 $47,145 $47,145 $227,135

Yearly Spend with Operating $90,945 $95,445 $95,445 $70,231 $72,301 $385,810

Carousel Vendor 5 Year

Example ROI Calculation – Carousel System

21

Cost Justification (ROI) Calculations for a Carousel

350 Bed Hospital

Current Inventory

TurnsProposed

Turns

120 Bed Hospital

Current Inventory

TurnsProposed

TurnsInventory Change

* Current Inventory Drug Budget 8,200,000$ 2,541,677$

* Current Dollar Inventory Total 737,500$ 11 285,000$ 9* Approximate % to be Controlled by Carousel 95% 95%* Total Dollar Inventory Managed by Carousel 700,625$ 270,750$ * % Inventory Reduction Savings 29.78% 20.50%* Total Inventory Reduction 219,628$ 16 58,425$ 11

Inventory Carrying Cost* Total Inventory Reduction 219,628$ 58,425$ * Cost of Capital 5% 5%* Annual Interest Savings 10,981$ 2,921$

Expired Medication Waste 222,578$ 71,455$ * % Projected Waste Reduction 50% 50%* Medication Waste Savings 111,289$ 35,728$

Total Financial ImpactOne Time Savings 219,628$ 58,425$

Recurring Annual Savings 122,270$ 38,649$ Estimated Initial Capital Inventment

*Excludes monthly service fees$245,000 $229,000

Return on Investment (Years) 0.72 2.36

Product Comparison Table

22

Feature/Functionality Vendor A Vendor B Vendor C BenefitFunding Options- Capital Expense, Capital Lease Yes Yes Yes Vendor A lease through Company KHardware Options: Vendor Selected, Client Selected

Client Vendor Vendor There are a number of hardware vendors and significant variation in quality of cabinets, serviceability.

Mobile PC - ability to pick and bar code scan items “off-line” during a carousel network connectivity failure and auto-sync/upload the transactions when network connectivity restored. YES NO NO

System operational redundancy. Can pick items from carousels, print labels to a mobile printer and store the transaction data which auto-syncs with the transaction history database and adjusts the item's QOH when it senses the hospital network connectivity is restored.

Safety Features include double scan to confirm correct product and also operator Safety stops.

YES YES YESMinimum Safety Requirements of all vendors

Safety- Forced Quality Checks and cycle counts to reduce expired drugs in carousel

YES NO YES

Manages External Shelving and Locations in Sync with CarouselYES YES NO

HUB Software interfaces Pharmacy informations system, Medication Cabinets, Packagers and Carousel YES YES NO

Wholesaler interface included without additional costYES NO NO

Dynamic Inventory Optimization functionality based on user parameters. YES NO YES

Setup Wizards for new formulary items, users, security, etc.YES NO NO

Easily setup new items, users, etc. Wizards that walk you through the process.

User-friendly GUI for viewing and changing product location assignments

YES NO YESMakes viewing and changing product location assignments as easy as selecting an airlineseat online.

Auto-import of wholesale distributor invoices upon export from wholesale distributor system

YES NO NO Minimizes steps to receive Distributor Orders.Reporting - Physical Inventory Value:  Summary, individual item detail and subtotaled by Inventory Storage Area (Total Value of Inventory), Detail (Descending by Line Item Based on Dollar Investment)

YES NO NO Flexible and accurate inventory valuation reporting display options.

Annual Maintenance Fees per Year$5,000 $21,000 $38,000 Wide varietion

Pharmacy Informations System Interface Fee

$34,000 $34,000 $34,000HBOC, Meditech, Cerner, etc. Dependant on other IT contracts.

Estimated 5 Year cost of ownership for a hypothetical pharmacy system- Single carousel $400,000 800000 $450,000

All prices are negotiable with a high degree of variabllity. Each contract circumstance is somewhat unique.

UNIT DOSE BAR CODING SYSTEMS

23

Selection Process

BMV- Bedside Medication Verification

24

Barcode Medication Verification- is a check system utilizing bar code technology to ensure each dose of medication given to a patient is correctly matched to a physician’s order including right drug, dose, time, and patient

A number of tools are required for the pharmacy portion of BMV Unit Dose Packaging Equipment – oral solids Liquid packagers Over-Wrappers Bar Code Labeling Equipment

Equipment Descriptions

25

High Volume Packagers – Canister packagers integrated into the pharmacy distribution process through Hub software to package in real time

Table Top Packagers – Traditional unit dose packagers producing batches of product for future dispensing

Equipment Descriptions

26

Manual Packaging – Disposable low volume packaging materials

Over Wrappers/Baggers – Produce sealed plastic bags with labeling and bar coding printed on the bag

Packaging Equipment Selection

27

BMV is an all or none system. Avoiding gaps or workarounds is a primary goal

A “readable” barcode must be on every dose at the bedside

A variety of equipment is needed to resolve all the different product situations encountered

The decision process is complex due to the variety of packaging and bar coding solutions required in pharmacy

Initial decisions about operations determine equipment selection

28

Questions: All packaging in house (90-100%)? Outsourced Packager ( 50-90%)? Manufacturer U/D bar coded Product with minimal in-house

packaging ( 30-80%)? What is the cost break point for each option? Which bar codes are actually readable by your bedside scan

system?

Decision Trees

Medication Dosage Forms and related Bar Code Technology Solutions

29

A bar code solution is needed for every type of product dispensed. Selection depends on facility size(dispensing volume), labor,

and available capital A total cost of ownership should be calculated for each piece

of equipment with an estimated cost per unit dispensed

Medication Dosage forms and related bar code technology solutions

30

Oral Solids (Low Volume, Medium Volume, High Volume)

Oral LiquidsU/D Injectables & Inhalants ( vials, amps, respiratory meds)

Multi-Dose Containers (inhalers, topicals, ophthalmics)

Large Volume IV’sPatient Specific Doses ( Admixed IVs, Non-formulary, non-

sterile compounded products, home-medications, Insulin, Investigational Drugs)

Right Sizing Equipment to the Facility31

Selection Determination Availability of Capital Funding Labor Costs

Undersized Equipment Choices Reduced life cycle of equipment High Labor Costs / unit dispensed

Oversized Equipment Choices Poor return on investment Unnecessary labor to maintain system

5 Year cost of ownership model for Leases and Capital Purchases is essential

Workflow and labor utilization analysis is essential

Equipment Choices by Facility Size32

Dosage Form Technology Estimated Capital

Oral Solids Manual packaging N/A

Oral Liquids Manual N/A

Small Facility <=50 beds

Manually Applied Barcodes Software, printer, variety of label stock $4,000 to $6,000

Dosage Form Technology Estimated Capital

Oral Solids Table Top Repackager $16,000 to $25,000

Oral Liquids Tabletop Repackager or Manual Up to $25,000

Medium facility 50 to 125 beds

Manually Applied Barcodes Software, printer, variety of label stock $4,000 to $6,000

Dosage Form Technology Estimated Capital

Oral Liquids Tabletop Repackager or manual Up to $25,000

Oral Solids $150,000 to$350,000

Manually Applied Barcodes Software, printer, variety of label stock $4,000- $6,000

Large facility > 125 beds

Hi-Volume Repackager (scaled to size)

Conclusion33

Planning Vision of future pharmacy practice Discussions with team and facility to form a compatible idea Form ideas into a strategic plan time lines and priorities Create specific plans with actionable detail Search for products and vendors that can make it happen Don’t be afraid to modify plans along the way

Planning and Strategy first– then exhibit halls and vendors

Manufacturer and Review Websites34

In addition to your GPO there are a variety of review sources

Manufacturer WebsitesAccuchart (Euclid) www.accuchart.comPhacts www.phacts.netMcKesson Automation www.mckesson.comPearson Medical Technologies www.pearsonmedical.comMPI ( Medical Packaging Inc) www.medpak.comTCG-RX www.tcgrx.comPharmacy Automation Supplies www.pharmacyautomationsupplies.comTalyst www.talyst.comMedi-Dose Products www.medidose.comAmerisource Bergen Automation www.amerisourcebergendrug.comHealth Care Logistics www.healthcarelogistics.comKlas Research www.klasresearch.comPharmacy Purchasing and Products Magazine www.pppmag.com

Disclaimer- The vendor list is not exhaustive and new vendors appear regularly

CAROUSEL AND PACKAGING AUTOMATION

KELLY FROISNESS, CPHT

35

A Buyer’s Perspective

CHRISTUS Hospital – St. ElizabethMission: To extend the healing ministry of Jesus Christ

Established in 1962 in Beaumont TX 434 Licensed beds All acute care services 1,700 associates 554 combined medical staff 133 Allied health practitioners

Current Pharmacy Environment37

Full BMV since 2002Currently deployed ADM’s in all patient care, surgical

and clinical areasCartless workflow process for medication distributionTwo carousels and one high speed packager in the

central pharmacy Manual barcode labeling systems

Pharmacy Carousels - Pro’s and Con’s

Pro’s Accurate inventory control Quick & accurate order and

restock Ability to electronically upload

current inventory level during yearly inventory

Electronic polling for ADM refill Decrease in quantity of

medication errorsAutomatically interrupts

work flow for STAT/NEW orders Programming priority levels

allow creation of Queue's and Over-rides

Con’s Unexpected stock outs,

typically user error

Carousel - Work Flow Changes for Buyer

Before Automation:Buyer walks shelves (1 hour daily)– Manually key in item numbers (30

minutes)– Check for contract items (15

minutes)– Transmit (send)

• Medications manually received then placed on shelves. (2-3 hours daily)

ESTIMATED TIME: 4 -5 HOURS

After Automation• Buyer will electronically run suggested

order report. (5min daily)– Upload order to wholesaler (5

minutes)– Check any static shelves(10 minutes)– Check for contract items (15 minutes )– Transmit (send)

• Medication electronically received (medication and quantity)– The carousel rotates to the proper shelf

allowing user to scan barcode to assure proper placement of medication. (30 minutes daily)

ESTIMATED TIME: 50 MINUTES

Carousel/Packager - Work Flow Changes for Technicians

Before Automation Technician walks shelves picking

meds for ADM refills and new Orders

Technician manually credits returns and replaces stock to bins.

Technician must add low stock items to want list for buyer to review

Technician assists buyer with stocking new orders on shelves

ESTIMATED TIME: 12- 25 hours

After Automation Medstation polling and first dose

interface trigger automated response (carousel to roll) to correct shelf for proper medication dispensing

“Scan feature” allows a medication that is to be returned to be placed into queue for quick and accurate stock replacement

Established par levels make it unnecessary to have a “short list” for items stored in the Carousel

ESTIMATED TIME: 8-15 hours

Carousel Install Process - Technician

• Formulary imported (by vendor) from hospital computer system

• Set pars (min vs max)• Add wholesaler id• Program barcodes• Placement and arrangement

medication on shelves• Assign users• Label bins• Work time required

Approximately 80+ hours

Packager-Pro’s

Electronic Pharmacist verification during refill of canister Purchase bulk bottles for additional savings Consistent labeling and bar code scan quality Accurate inventory control Quick/accurate order and restock Longer expiration on pre-packed meds

Medication not packaged until time of use Electronic polling for ADM refill

Decrease in quantity of medication errors Medication is polled from ADM machine by pneumonic minimizing user error(s)

Multi-tasking Packages medication while tech is completing other tasks

Packager – Con’s

• Unexpected stock outs, typically user errorCross contamination possible in packager, typically

user error (Caused by poor cleaning and improper canister placement)

Mechanical device requiring consistent cleaning and preventative maintenance If packager malfunctions it will take time to receive parts and a technician

from company on site to make repairs. Backup packaging system recommended

Canisters are custom made for each NDC# making brand changes expensive If canister malfunctions it may take up to 8 weeks for replacement

Packagers - Work Flow Changes - Buyer

Before Automation All Tabs and Caps purchased in

U/D, batch packaged, or outsourced

ESTIMATED TIME: 3 HOURS 45 MINUTES

After Automation ADM Fill - Hub Software polls

Carousel and Packager and intelligently sends fill request to all devices

Medication electronically received (medication and quantity) the carousel rotates to the proper

shelf allowing user to scan barcode to assure proper placement of medication. (30 minutes)

ESTIMATED TIME: 50 MINUTES

Install Process Packager- Technician

• Formulary imported from hospital computer system

• Set pars (min vs max)• Assign locations (separation of

look alike sound alike)• Load canisters• Assign users

(Technician/Pharmacist)• Pharmacist verification of

medication • Work time required

– Approximately 30 manhours

Conclusion46

In conclusion although automated dispensing has made the work load of both the pharmacy buyer and the pharmacy technician quicker and more streamlined it requires daily upkeep maintenance

Both inventory control and Safety are greatly improved making the switch from manual medication storage to automated storage a great advantage

Thank You !

47