IS OUTSOURCING REALLY TOO EXPENSIVE?

Most hospital pharmacists appreciate the benefits of outsourcing unit dose repackaging to an FDA regulated repackaging service provider. Some, however, have a perception that outsourcing is too expensive. Let’s explore this a bit further. . .

In the March 2012 issue of Pharmacy Purchasing & Products, Gary Magnus, RPh, MS Pharm at MedStar Montgomery Medical Center in Olney, Maryland, provided some interesting insight into the question of outsourcing unit dose packaging.

As bar-code-assisted medication (BCMA) becomes more prevalent in hospitals (nearly 50% of hospitals with 200 or more staffed beds have implemented BCMA), there are many products and patient situations that require facilities to either package or repackage a medication to ensure BCMA system compatibility. Thus, the question at many health care facilities arises: To outsource or repackage in-house?

Magnus suggests that, to make this decision wisely requires a good understanding of the cost and value of outsourced services and the time and labor involved to repackage in-house. Magnus goes on to say the decision should also include factors such as "...whether the wholesaler has the products you want in unit dose or your facility uses enough of a given product that buying it in bulk and having it repackaged is fiscally responsible."

Magnus states that the decision to outsource or repackage bulk medications in-house is their hospitals' tipping point of 100 doses a year, where less than that amount of use falls to in-house packaging. Magnus states, "For our commonly used drugs that do not come in unit dose, routing these through the repackager provides us with safe, properly packaged doses every time without us having to expend the labor and time of doing ourselves."

Addressing outsourcing costs, Magnus suggests the health care provider does its homework to determine the best outsource provider for the institution's needs.

In speaking with other hospital pharmacists, I have found that there are components of the overall cost of repackaging in-house that are not included in their cost analysis. Usually, at least one of the following cost components are missed, including the repackaging FTEs plus benefits, the capital and maintenance cost of equipment, packaging material acquisition and inventory, usage of limited pharmacy space including overhead, and the cost of quality (pharmacist check). Taking all of this into consideration, the cost of in-house repackaging is approximately 18-cents per dose, whereas, the cost to outsource may be as low as 10-cents per dose, as outlined in a 2009 survey conducted by the independent consulting firm Shack & Tulloch, Inc., and presented in a 2010 White Paper presented by McKesson Corporation.

The argument to outsource or repackage in-house continues to be dependent on many factors, including the size of the health care institution. However, in making this decision, it's wise to consider other factors, including safety (i.e., reducing the risk for packaging error with a qualified third party repackager whose core competency is packaging and labeling accurately), reducing or totally eliminating the capital expenditure to acquire packaging equipment, better use of technicians and pharmacists' time to the core competency of the department, which is patient care and pharmacy clinical services. Additionally, an analysis of the bulk cost of a drug vs. the cost of that drug in unit dose form may more than offset the cost of utilizing the outsource repackaging service.

In the final analysis, it's in the best interest of the health care institution to perform due diligence to determine what is ultimately in the best interest of their pharmacy, their patients, and their bottom line.

Here's to better solutions,  

             Dave Bystrom

THE CASE FOR UNIT DOSE AND BAR-CODE PACKAGING

Medication errors in hospitals frequently occur at all phases of the prescribing, dispensing, and administration processes. One of the most significant advancements in reducing administration errors has been to provide medications in unit dose packages, which ensures that the medication name, strength, and other characteristics are available during the administration phase.

Providing medication in a unit dose distribution system was implemented by many hospital pharmacies in the 70’s and early 80’s, and is not only considered a best practice, but is now near universal in its application, with millions of unit dose medications dispensed in hospitals and health systems daily, as stated in an editorial in the American Journal Health System Pharmacy (2002).           

Not quite universal is the drive to convert to bar-code technology, which represents a promising solution to the medication administration errors, which occur at the bedside. Bar-code technology saves time, improves accuracy, and reduces errors.

The benefits of bar-coding are well documented, such as an article in the Annals of Internal Medicine (2006; 145:426-34) on bar-code safety. The article states that the use of such technology provides reduction in errors, which will result in significant improvements in patient safety. As pharmacists, we know this to be true.

Unfortunately, not all hospitals have implemented this technology due to perceived costs. However, a study in Archives of Internal Medicine (2007) suggests that bar-code technology pays for itself within 5 - 10 years, primarily by providing warnings that can actively help prevent ADE’s and medication errors from occurring.

The most recent advancement in technology to improve patient safety is a bar-code-enabled point-of-care (BPOC) system, whereby medications are administered in bar-coded unit dose packages. For this to be effective, patients wear a bar-coded wristband. When the nurse administers the patient's medications, he or she first scans into the system, then scans the patient’s wristband, and then scans the barcode on the medication, which ensures the right medication reaches the right patient, and is documented in “real time”.

As healthcare pharmacy administrators, we all must be aware that our first obligation is always to the patient. If such technologies prevent just one patient death from an overdose, or the wrong medication, then price becomes secondary.

In my next post, I will discuss the cost structure and other advantages of third-party bar-coded unit dose repackaging for hospital pharmacy. Until then…

                                            Here's to better solutions,  

                            Dave Bystrom

YOU DON'T KNOW DAVE...

Well, perhaps you do know me, but not that well. I believe that once you read this short message, you will know more about me and why I chose to undertake this exciting challenge for Shamrock Medical. My goal is to write a timely blog about topics of interest to the profession, with weekly posts that provide for healthy, upfront dialog among pharmacists, so that together we can make the entire profession stronger and safer for the staff and the patients we serve.

But first, I'd like to tell you why the Shamrock Medical team chose me as a spokesperson for our industry. I'm a professional pharmacist; I'm not a salesman. I understand the problems facing hospital and other healthcare pharmacies because I've worked in hospital settings. As the director of pharmacy at several leading healthcare centers in Central Ohio, I've faced many of the problems you wrestle with today. I know your concerns and frustrations.

Another goal I have with this blog is to help you find answers to your most pressing concerns and, perhaps, help you overcome some of the daily frustrations you face. I plan to comment on the latest news in drug repackaging, and fill you in on how using a third-party drug repackager can help diminish your most pressing concerns, such as ensuring overall patient safety, handling specific safety issues concerning bedside scanning, managing drug shortages, as well as offering advice and commenting on trends in areas of outsourcing drug repackaging and dispensing.

I promise to keep the blog posts short, informative and to the point, because I know you're busy. I hope we can make the posts a two-way communication. If you have a comment or questions, I will respond with an answer, so that the posts do, indeed, become a healthy dialog among professionals.

If you'd like to sample Dave's Dose by email just enter your information in the “follow by email” box. I look forward to sharing useful information and receiving interesting comments!

Here's to better solutions,

Dave Bystrom