Achieving cost-efficient management of drug supply via economic order quantity and minimum-maximum stock level.

BACKGROUND: A good drug inventory planning system is important for an efficient budgeting, procurement, and cost control of drugs. When stagnant drugs in the inventory are too much, wastage due to expired and spoiled drugs could occur. These will not only cause loss of income but could also jeopardize healthcare service delivery. RESEARCH DESIGN AND METHODS: This study aimed to determine the most efficient and effective management of stagnant and shortage drugs by comparing three pharmacy logistic methods; the economic order quantity (EOQ), minimum-maximum stock level (MMSL), and the traditional consumption of drug inventory, at RA Basoeni Hospital, Mojokerto. Drug inventory was analyzed to calculate the opportunity loss, opportunity cost, and proportions of both stagnant and shortage drugs. RESULTS: We found that EOQ and MMSL performed best for control of stagnant drugs and shortage drugs, respectively. Both methods had proved as effective pharmacy logistic planning. In addition, EOQ produced the lowest opportunity cost for stagnant drugs besides the lowest opportunity loss for shortage drugs. CONCLUSION: The study concluded that EOQ is the most effective and efficient method to manage stagnant and shortage drugs at hospital pharmacy.

Improving hospital pharmacy inventory management using data segmentation.

PURPOSE: This case study describes the development and empirical validation of an easy-to-implement practical framework for improving hospital pharmacy inventory management. SUMMARY: Research suggests various inventory optimization models, which can lead to cost reductions while maintaining adequate service levels; however, they are facing limited adoption in healthcare settings. The main barriers appear to be the high effort and complexity of implementation, the dependence on data that are not available or might not be in the right form, and the one-size-fits-all approach often followed without addressing healthcare sector-specific particularities. A research framework was developed by adapting relevant inventory models to the healthcare context using the concept of data segmentation on the basis of a three-dimensional classification of hospital pharmacy inventory items based on their relative importance, clinical criticality, and consumption pattern. Suitable replenishment policies were assigned to high-impact classes, and an integrated performance-measurement component assesses the framework's effectiveness. The suggested approach was implemented and empirically tested at the pharmacy of a large public hospital using longitudinal data. The results demonstrate substantial improvements with respect to all of the selected key performance indicators and translate into inventory cost savings due to reduced stockholding costs and better synchronization of inventories to demand. CONCLUSION: Use of standard software functionalities combined with targeted data segmentation efforts significantly improves hospital pharmacy inventory cost performance.

Maximizing Savings and Efficiencies While Managing an Inpatient Drug Formulary and Inventory.

Continual price increases of pharmaceutical products have taken a great toll on pharmacy expenditures. Cost of prescription drugs for the health-care system increased by an average of 11.7% in 2015. In today's market with ever-increasing drug costs, it is important to focus on using medications in a manner that optimizes patient care, as well as being fiscally responsible for the health-care system. There are many reports, services, and analytics available that help identify areas for improvement and optimization. However, it is important for pharmacists to be creative and find novel ways to decrease the inventory cost and increase efficiencies. Doing this will improve the bottom line for the organization and allow for a decrease in health-care spending.

Supply chain optimization at an academic medical center.

PURPOSE: A successful supply chain optimization project that leveraged technology, engineering principles, and a technician workflow redesign in the setting of a growing health system is described. SUMMARY: With continued rises in medication costs, medication inventory management is increasingly important. Proper management of central pharmacy inventory and floor-stock inventory in automated dispensing cabinets (ADCs) can be challenging. In an effort to improve control of inventory costs in the central pharmacy of a large academic medical center, the pharmacy department implemented a supply chain optimization project in collaboration with the medical center's inhouse team of experts on process improvement and industrial engineering. The project had 2 main components: (1) upgrading and reconfiguring carousel technology within an expanded central pharmacy footprint to generate accurate floor-stock inventory replenishment reports, which resulted in efficiencies within the medication-use system, and (2) implementing a technician workflow redesign and algorithm to right-size the ADC inventory, which decreased inventory stockouts (i.e., incidents of depletion of medication stock) and improved ADC user satisfaction. CONCLUSION: Through a multifaceted approach to inventory management, the number of stockouts per month was decreased and ADC inventory was optimized, resulting in a one-time inventory cost savings of $220,500.

[Research on our hospital inventory management status quo of traditional Chinese medicine drugs and treatment method].

Under the background of the new medical reform, a large variety of traditional Chinese medicine from complicated sources, Chinese traditional medicine of actor of true and false of the quality directly affect the drug safety and clinical efficacy, but also relate to the social and economic benefits of hospital. Along with the development of the modern management of medical institutions and drug circulation circulation system reform in our country, the hospital drug inventory, supply and management work is an important topic for the pharmaceutical trading. However, there is always contradiction, dispensary need to supple pharmacy, in order to satisfy the demands of hospital patients with normal diagnosis and treatment work. However, if the drug inventory is too much, not only increases the drug monitoring problem, at the same time, but also causes storage costs rise. Therefore, completing scientific and reasonable storage and management becomes urgent problems at present. Wherefore, our country administration of traditional Chinese medicine in 2007 promulgated the "Chinese traditional medicine yinpian management norms in hospital", aims to standardize management of Chinese traditional medicine quality and improve the safety of drugs. The author through looking up information and visiting survey, to understand the currently existing problems, and summarizes the literature inland and abroad in recent years Chinese medicine drug inventory management work experience, in view of status quo of Chinese medicine inventory management in China, put forward the solution. To guarantee TCM pharmacy management more standardized, more standard, to adapt to the new reform of Chinese traditional medicine industry, improve the management level of hospital, defend the hospital's reputation and the patient's interests.

Evaluation of hospital medication inventory policies.

As supply chain costs constitute a large portion of hospitals' operating expenses and with $27.7 billion spent by the US hospitals on drugs alone in 2009, improving medication inventory management provides a great opportunity to decrease the cost of healthcare. This study investigates different management approaches for a system consisting of one central storage location, the main pharmacy, and multiple dispensing machines located in each department. Each medication has a specific unit cost, availability from suppliers, criticality level, and expiration date. Event-driven simulation is used to evaluate the performance of several inventory policies based on the total cost and patient safety (service level) under various arrangements of the system defined by the number of drugs and departments, and drugs' criticality, availability, and expiration levels. Our results show that policies that incorporate drug characteristics in ordering decisions can address the tradeoff between patient safety and cost. Indeed, this study shows that such policies can result in higher patient safety and lower overall cost when compared to traditional approaches. Additional insights from this study allow for better understanding of the medication inventory system's dynamics and suggest several directions for future research in this topic. Findings of this study can be applied to help hospital pharmacies with managing their inventory.

Suture cost savings in the OR.

Materials management personnel at a health care facility in Baltimore, Maryland, were stocking too much suture. They stocked suture requested by surgeons or recommended by suture company representatives, and, because the facility is a teaching institution, they stocked suture requested by residents. No master suture database was available to determine what was needed and what was not. As a result, some suture was rarely used, which cost the facility money and took up inventory space. In response, I created a list of the existing inventory and coordinated with the specialty surgical service coordinators to determine which suture was typically used and in what quantities. I used this information to create a master list, with the goal of eliminating the purchase of suture that was not on this list. I gave the staff members and surgeons two months to assess the list and determine whether the suggested suture was sufficient for their needs. I then asked the materials management personnel to order and maintain suture stock based on the master list. This process took approximately four months and shows how health care providers can take a high-volume item, such as suture, and create cost-saving processes that will serve surgeons' and patients' needs while reducing costs and streamlining stock.

Therapeutic phlebotomy procedures and their impact on a rural hospital's red blood cell inventory and fiscal stature.

BACKGROUND: Therapeutic phlebotomy (TP) programs offer an important community service and often provide financial and donor unit resources for the hospital. This study assessed the financial impact and red blood cell (RBC) inventory contribution of a small, rural hospital-based TP program. STUDY DESIGN AND METHODS: TP procedures over 13 months were evaluated at a 142-bed rural hospital. The hospital had a Food and Drug Administration variance for a hereditary hemochromatosis (HH) donor program. The revenue for the non-HH therapeutic phlebotomies and the savings attained for units added to RBC inventory from allogeneic eligible HH donors were compiled. RESULTS: During the study, 84 patients were involved in the TP program. Of the 62 HH patients, 43 met eligibility requirements for allogeneic donations resulting in 207 donor units collected for the blood bank inventory and a savings of $21,000 in blood costs. Additionally, 22 non-HH patients underwent 183 TP procedures earning the hospital over $15,000 in net revenue. CONCLUSION: The TP program at this small, rural 142-bed hospital provided a financial gain of $36,000 during the 13-month study period. The HH donor program contributed approximately 4% to the RBC inventory. The TP program at this small, rural 142-bed hospital proved to be financially lucrative and provided a community service to patients.

Not your father's supply chain. Following best practices to manage inventory can help you save big.

Today, supply chain metrics should be more strategic rather than transactional in nature. They should provide a for greater understanding of the relationship between supply chain manage ment, clinical outcomes and patient safety. In addition to taking a comprehensive look at inventory value, materials managers should assess strategies to reduce theft and consider third-party logistics managers where appropriate. This article provides direction for best practices in inventory management and suggests supply chain metrics that can be employed to improve performance.

Stockpiling anti-viral drugs for a pandemic: the role of Manufacturer Reserve Programs.

To promote stockpiling of anti-viral drugs by non-government organizations such as hospitals, drug manufacturers have introduced Manufacturer Reserve Programs which, for an annual fee, provide the right to buy in the event of a severe outbreak of influenza. We show that these programs enhance drug manufacturer profits but could either increase or decrease the amount of pre-pandemic stockpiling of anti-viral drugs.

Can efficient supply management in the operating room save millions?

PURPOSE OF REVIEW: Supply expenses occupy an ever-increasing portion of the expense budget in today's increasingly technologically complex operating rooms. Yet, little has been studied and published in the anesthesia literature. This review attempts to bring the topic of supply management to anesthesiologists, who play a significant role in operating room management. RECENT FINDINGS: Little investigative work has been performed on supply management. Anecdotal reports suggest the benefits of a perpetual inventory system over a periodic inventory system. A perpetual inventory system uses utilization data to update inventory on hand continually and this information is linked to purchasing and restocking, whereas a periodic inventory system counts inventory at some regular intervals (such as annually) and uses average utilization to set par levels. SUMMARY: On the basis of application of operational management concepts, ways of taking advantage of a perpetual inventory system to achieve savings in supply expenses are outlined. These include linking the operating room scheduling and supply order system, distributor-driven just-in-time delivery of case carts, continual updating of preference lists based on utilization patterns, increasing inventory turnovers, standardizing surgical practices, and vendor consignment of high unit-cost items such as implants. In addition, Lean principles of visual management and elimination of eight wastes may be applicable to supply management.

Optimal inventory policy within hospital space constraints.

The materials management group at any hospital is responsible for ensuring that their inventory policies provide a good service in delivering products. The group also needs to be aware of their own costs for distribution, in terms of the frequency of delivery. With future changes to the hospital's infrastructure, function and size, the group require that these policies are reviewed and prepared for the changes taking place. For this, inventory policy models need to be built and used to anticipate the effect of these changes. Due to the importance of many products, high service levels are essential, yet there are often space and delivery constraints, limiting the amount of stock which can be held and delivered at each location. We present in this paper a new constraint-based model for determining optimal stock levels for all products at a storage location, with restrictions on space, delivery and criticality of items taken into account. We validate this model on sterile and bulk items in a real-life setting of an intensive care unit within Cork University Hospital, Ireland.

[The role of pharmacist on coordinating CAPD operation].

Tokai University Hachioji Hospital has built a distribution system which intended to minimize a drug inventory at the hospital, and to reduce the number of drugs when the patient is discharged or when the patient is an outpatient to take-out the drugs in order to facilitate smooth CAPD operation. As a result, the number of take-out drugs for discharged patients or outpatients has been reduced within two days. In addition to that, it has been considered to minimize both the strain to the patient who has to take drugs back to home as well as a level of the drug inventory. The cost of peritoneal dialysate inventory amount corresponds to the amount of one patient's 3-day inventory. Therefore, the amount of money can be suppressed to the minimum. Since the distribution system has not caused any major troubles, we basically assumed the system operation to be successful. Although CAPD operation is performed by clinical nurses in most of the cases, we believe that CAPD operation can be smoothly performed by participation of pharmacist. Further more, it is possible to contribute toward a health cost reduction, and the like.

Cost analysis of minimally invasive surgery in a pediatric setting.

AIMS: The aims of this study was to determine whether an active policy of cost curtailment would impact on the theater cost of laparoscopic surgery in a pediatric setting; to document the extent of cost changes over time and to identify factors that adversely influence expenditure; and to investigate whether the surgeon is a significant factor in the price of the procedure. MATERIALS AND METHODS: A prospective audit of laparoscopic procedures was performed in a single unit over a 36-month period. Detailed costs of theater inventory for all procedures were compiled on a case-by-case basis and recorded on a database. The cost of six index procedures were collated and changes over the period of the study analyzed. The factors responsible for increased expenditure were flagged and appraised to enable the implementation of cost-saving measures. The prices of the laparoscopic equipment were based on invoiced figures provided by hospital managers, and no long-term outcome measures were taken into account. RESULTS: A total of 179 cases were performed by six surgeons over a 3-year period between January 1, 2003 and December 31, 2005, with no adverse intraoperative events. The procedures studied in further detail were appendicectomy (n = 50), fundoplication (n = 25), cholecystectomy (n = 12), nephrectomy (n = 10), Fowler Stevens for undescended testes (n = 10), and modified Palomo operations for varicocoele (n = 7). The mean cost of these procedures fell year by year over the period of study but was significant only in appendicectomy (P = 0.017). For this procedure, there was a significant difference in costs between the various surgeons (P = 0.007), but this trend was not noted with the other procedures. There were no major intraoperative events, although 2 patients required conversion owing to technical difficulties posed by the cases. Among the factors that influenced costs were the use of disposables, particularly for hemostasis and suctioning, and an inability to procure reuseable instruments. CONCLUSIONS: The costs of commonly performed laparoscopic procedures are falling year by year. The surgeon is a factor in the costs of some procedures. A cost-saving strategy has not been compromised of patient safety; however, some cost-saving measures, though attractive, are labor intensive and are not practical. An overall commitment to the sensible use of health care resources translates into savings for hospitals, thereby strengthening the case for laparoscopic surgery.

Implementation of a redistribution system for near-outdate red blood cell units.

CONTEXT: Many remote hospitals keep small on-site stocks of red blood cell (RBC) units for emergency use and to support patient care programs. In Canada, the blood supplier does not accept returned units into inventory. Discard rates can, therefore, be high. OBJECTIVE: To transport near-outdate RBC units to a high-usage hospital site, which would reduce overall discard rates, thereby increasing overall stock levels available in the blood system. DESIGN: A blood transportation system was developed and validated. The validation was presented to a high-usage site that agreed to accept near-outdate RBC units transported by this system. Stocks at the remote hospitals were optimized without increasing system-wide discard rates. The redistribution program was implemented in 4 remote sites in northern Alberta, Canada. The final disposition of each transported unit was tracked. Data from the first 2 years were analyzed. RESULTS: Between April 1, 2003, and March 31, 2005, 106 RBC units were successfully transported to and transfused at the high-usage site. The majority of the units were group O. None of the transfused units were involved in any reported transfusion reactions. The success rate of the transportation system varied among the sites (59%-78% successfully transported and transfused). Changes to the transport system were implemented as problems were discovered. The use of a temperature monitor in each shipment allowed for concurrent revalidation after each change. CONCLUSIONS: Redistribution systems can be an effective way to reduce RBC unit discard rates. Even simple transportation systems have many factors affecting the RBC unit temperature. Novel temperature stabilizing materials may make future transportation of RBC units more reliable.