As hospitals and health systems feel the pressure to reduce costs, enhance efficiency and improve quality of care, many are looking for ways to tighten the belt without sacrificing excellent patient care. The pressure to provide improved and expanded services without increasing resources continues to challenge pharmacy leadership to identify creative ways to improve operational efficiency.
Strategies to gain efficiency are widely variable due to a host of factors including institution size, the patient population served and pharmacist and technician practice models, to name a few. One common target for improving operational efficiency is the medication distribution system, the design of which can vary greatly among institutions from fully centralized to largely decentralized distribution models. Recognizing this opportunity, the University of Wisconsin Hospital and Clinics recently decided to reexamine its medication distribution system.
Historically, hospitals with centralized pharmacy operations have distributed most medications from a single location. For a number of years, however, industry trends have shown a persistent increase in the deployment of decentralized medication distribution models. In a decentralized distribution model, nurses dispense 80 percent or more of inpatient medications from automated dispensing cabinets. These models seem to offer a number of advantages, including automation of controlled substance inventory reconciliation, improved satisfaction among nursing staff and — theoretically, at least — more efficient nursing workflows based on reduced incidence of missing medications and faster turnaround times for first doses and
As UWHC geared up for a major expansion effort, the health system wanted to strategically evaluate its current medication distribution model to see if it was the most cost-effective approach. To do so, it embarked on a study comparing its existing hybrid medication distribution system — one that leveraged both an automated centralized pharmacy and ADCs — to three other medication distribution models.
UWHC's goals were to determine the most efficient methodology to support quality initiatives and to ascertain whether transitioning from a hybrid to a decentralized model would produce favorable results in terms of workflow efficiencies and costs. Partnering with Indiana University Health-Bloomington, UWHC ultimately concluded that its current hybrid model is more cost-effective because the other approaches, including the decentralized model, would result in inefficiencies such as increased nursing workloads, increased on-hand inventory and higher automation expenses.
Parameters of the study
Implemented in a 566-bed academic medical center with a 62-bed freestanding children's hospital at the time of the study, UWHC's hybrid distribution model was leveraging centralized robotic and medication carousel technologies to automate a 24-hour patient-specific cart fill from the central pharmacy. The majority of scheduled maintenance doses were dispensed from the central pharmacy, and ADCs were used on the nursing units for controlled substances and as-needed medications.
By comparison, IUHB was using a decentralized approach to medication distribution. Unit-based ADCs were responsible for approximately 89 percent of all doses dispensed at IUHB, a 355-bed community hospital. The remaining 11 percent were stored in patient-specific bins within an
During UWHC's study, researchers gathered and analyzed data from the existing hybrid model at UWHC and the decentralized model at IUHB. They conducted observational time studies on all cart-fill and cabinet-fill processes and reviewed the impact of each model on pharmacy, including both pharmacist and pharmacy technicians, as well as nursing workflows. Researchers also obtained workload statistics from UWHC's electronic health record, including average daily census; total medication orders and doses filled; number of medication doses and line items picked by the centralized dispensing robot and medication carousel; and the number of inpatient units for which doses were picked.
The study focused primarily on workflow efficiencies, with both institutions using comparable pharmacy automation technology from the same vendor, although IUHB did not utilize a central pharmacy robot. While comprehensive in nature, the study did not collect data on differences in patient acuities, formularies, medication errors or nursing footsteps after medication retrieval.
Once all the data was collected, the following four possible scenarios were analyzed using simulation software.
1. Medication distribution without use of any ADCs.
2. Hybrid model (represented by UWHC).
3. Decentralized model (represented by IUHB).
4. No cart-fill scenario where 100 percent of medications come from ADCs.
Ultimately, the goal was to determine how each scenario impacted medication inventory across the system, automation cost and labor time for pharmacists, pharmacy technicians and nurses.
Understanding outcomes
The study revealed that as the amount of medication administered from cabinets increased, so did negative impacts to nursing workflows. Furthermore, time standards revealed significant differences between UWHC and IUHB for nursing tasks related to medication distribution — most likely due to the fact that IUHB nurses obtained more line items during a trip to an
Overall, the study determined transitioning to a decentralized model at UWHC would cost an estimated $229,600 annually in human capital. Since labor costs associated with use of pharmacy technicians are lower than nursing costs, researchers concluded that continuation of the hybrid model would provide the greatest benefit to UWHC from a labor perspective, as well as allow nurses to spend more time at the bedside.
The evaluation also showed technology and inventory costs would increase under a decentralized model. UWHC would have to significantly increase the number of ADCs to support a decentralized model, resulting in an annual cost increase of approximately 60 percent, even after the elimination of the costs associated with the central pharmacy robot. Furthermore, since decentralized models require more inventory to support large percentages of medications distributed from cabinets, UWHC would incur an increase in its annual on hand medication inventory by more than $1 million.
UWHC found that in a decentralized model, reduced pharmacy workload would be exchanged for increased nursing workload. From an overall health system perspective, this represents an unfavorable shift in overall skill mix and corresponding human resource costs. These costs, considered with the costs of higher medication inventory levels and additional automation required to support a decentralized model, demonstrated that the hybrid medication distribution model would be the more cost-efficient model for the medical center. UWHC subsequently increased its efficiency and utilization of its central pharmacy automation by increasing cart fill frequency to three times per day to reduce the incidence of missing medications and the number of doses returned to pharmacy.
Best practices for evaluating medication models
Within the new risk-bearing and performance-based landscape, medication distribution is a critical area for healthcare organizations to examine from quality and cost standpoints. While the UWHC study can serve as an important resource, organizations must consider two important points before conducting their own analyses:
Tip 1: Gain a clear understanding of how various dispensing models might work within the organization's daily medication ordering workflows. All organizations have peaks and valleys around medication distribution needs that naturally occur during the daily routine, and strategies should be aligned with these patterns.
Tip 2: Take workload statistics — including nurse-to-patient ratios and acuity levels — into consideration. In the large academic setting of UWHC, the decentralized model proved challenging from a nurse workflow perspective, negatively impacting labor costs, as well as time that could be devoted to direct patient care.
In the end, UWHC recognized that while there is no one-size-fits-all approach to medication distribution, its existing hybrid system would produce the most advantageous results from cost and nursing workflow perspectives. Every hospital should conduct its own analysis in its own unique environment to achieve optimum outcomes and thoroughly understand the dynamics of the distribution model options, ensuring that the selection isn't being driven only by pharmacy department objectives without ample consideration given to potential nursing impacts. Ultimately, clinical outcomes, patient satisfaction and reimbursements of the institution will be significantly influenced by the selection of medication distribution model.
Brad Ludwig, MS, BS Pharm., is the assistant director of pharmacy at the University of Wisconsin Hospital and Clinics.
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