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432_chapter_08-2.pdf

Chapter 8: Opera,ons of Dispensing:

Distribu,on to Points of Care

Learning Objec,ves

•  Outline and explain the concepts and processes associated with distribu4on to points of care in the healthcare supply chain. •  Discuss and give examples of the process of distribu4on and various methods of distribu4on of the different types of supply chain items (medical and surgical, pharmaceu4cal, office supplies, etc…). •  Relate, discuss and provide examples of the tools and methods of distribu4on and the link to inventory management within the healthcare supply chain. •  Dis4nguish the opera4onal differences of areas within the healthcare organiza4on (peri-opera4ve area versus medical and surgical ward to an outpa4ent clinic) with regard to restocking of healthcare supply chain items. •  Relate the differences of a case cart versus a PAR loca4on for restocking opera4ons. •  Evaluate the benefits and limita4ons of three restocking methods within the health organiza4on to the points of care.

Introduc,on

• The distribu4on of supplies throughout the healthcare organiza4on is perhaps the most complex por4on of the supply chain. • Distribu4on is also a key component to the culture of pa4ent safety. • From this point, the supply lines become much more complicated, with medical/surgical, pharmaceu4cal, and capital equipment interwoven throughout the facility. •  In this effort, this chapter will cover the typical distribu4on methods of the supply chain for each common department within a facility, but we will also focus on the periopera4ve space.

Different Clinical Areas MaBer

• Depending on the clinical area the supply chain supports, how that area is restocked, equipped and the method surrounding distribu4on to the points of care maOer. • Several clinical areas are discussed to impart the importance of how the supply chain must support the unique needs of those specific areas.

Opera,ve / Periopera,ve Space

• The distribu4on of supplies and equipment in the periopera4ve space is perhaps the most complex aspect of distribu4on within a hospital. • This is because the periopera4ve environment u4lizes high volumes of items from all three categories of supply line: medical/surgical, pharmacy, and capital equipment. •  In this area, opera4ng suite with pre-opera4ve and post-opera4ve areas, the ability to deliver the exact items needed with sufficient back-up material is essen4al.

Opera,ve / Periopera,ve Space

• Each procedure, as well as each surgeon, opera4ve team or specialist, will have a supply and equipment item list that must be prepared in advance of a scheduled opera4on or procedure. •  In many health organiza4ons, a case cart is prepared and labeled for that par4cular scheduled case.

Figure 8-1

Medical/Surgical

• When you think of surgical supplies, there is a good chance that you immediately think about scalpels, sutures, and protec4ve equipment such as gloves and masks. • A more inclusive list of medical/surgical supplies is everything brought into the opera4ng room on the case cart, other than pharmaceu4cals. • These items are stored in a central storage loca4on that is typically a sterile area connected to the opera4ng rooms.

Medical/Surgical • These stored items are pulled as needed for each case along with reusable equipment that is sterilized and reused for mul4ple cases. • All of these items are placed on a case cart and wheeled into the opera4ng room for each case.

Figure 8-2

Pharmacy

• The periopera4ve environment u4lizes a high volume of pharmaceu4cals star4ng before the procedure and con4nuing through the opera4on and recovery. • The various types of anesthesia used during surgery are also pharmaceu4cals. • Very oYen, these items require storage at a specific temperature and always require storage within a secure loca4on. • Due to the federal schedule of narco4cs, many of the medica4ons used for anesthesia have special security requirements associated with their storage and use.

Capital Equipment

• An example of capital equipment that is being added to opera4ng rooms across the country is surgical robots. • When the da Vinci Robot was introduced in 2000, it became the first surgical robot approved for general laparoscopic surgery. • The robot itself is a large piece of equipment, oYen requiring modifica4ons to the opera4ng room in which it will be held.

Restocking

• Restocking within a hospital is complex due to the mul4ple supply lines entering the facility, various usage loca4ons, usage rates, and documented industry wide issues with capturing item charges.

Periodic Automa,c Replenishment (PAR)

• The par system is a method of managing inventory that requires items be restocked to a specific level. •  In a par system, each of the items stored in central storage and the department storage areas are assigned a stock requirement or par level. • At a certain 4me, some4mes con4nuously, through the use of automa4on, or every few days, the items are counted and restocked based on the number of items used.

Periodic Automa,c Replenishment (PAR)

• Once the coun4ng is complete, the employee goes to central storage and retrieves the items required to restock the department storage area.

Figure 8-3

Courtesy of PAR Excellence Systems. Retrieved from: hOp:// www.parexcellencesystems.com/par-bins.aspx

Just-in-Time (JIT)

• Just in 4me is a system to reduce inventory and minimize spoilage while s4ll mee4ng the needs of customers. •  Items in inventory do not add value to the company un4l they are sold, used for manufacturing, or providing a service. •  In addi4on, items in inventory are subject to damage, loss, or spoilage while in storage. • The key benefits of the JIT system are:

Low inventory Low waste High quality produc4on High customer responsiveness

Perpetual Inventory

•  In a typical hospital, the periopera4ve department (opera4ng room/ suite and recovery area post procedure) typically generates between 50 and 60% of the revenue for the organiza4on while accoun4ng for 30 to 40% of the total expenses; the costs are mostly related to the use of supplies. • The power of informa4on technology can be u4lized to improve the accuracy and efficiency of the OR supply chain. • This is accomplished through electronically reques4ng supplies from the materials management department and automa4cally receiving the supplies requested in the correct quan44es.

Perpetual Inventory: Case Cart System

• A subset of perpetual inventory is the case cart system for managing opera4ng room supplies on a case-by-case basis. • Equipment and supplies for surgical cases are prepared in a central processing area and sent to the opera4ng room on case carts. • The purpose of a case cart is to ensure that the correct supplies and equipment are available in the correct quan4ty for the procedure being performed. • AYer the case is complete, the cart is returned for cleaning and restocking for the next case.

Consignment

• Consignment is typically used on peri-opera4ve areas of the health organiza4on as well. •  In consignment, the manufacturer or distributor of peri-opera4ve items (surgical screws, cardiac rhythm management items such as pacemakers, stents, etc…) provides an assortment of items for use in pa4ent procedures in the peri-opera4ve area. • The manufacturer or distributor will inventory items used in a given 4me period (week, month or quarter) and charge the health organiza4on for the used consigned items.

The Last Mile

• The last mile is a term for the final step in the distribu4on of products within the supply chain. • For a delivery company like UPS or DHL, the last mile is when trucks delivery from the local distribu4on center to customers doors. •  In a healthcare environment, the last mile of distribu4on is in-house distribu4on from central storage to departmental or unit storage loca4ons from which items are dispensed for pa4ent care.

Kanban

• “Kanban” means symbol or card in Japanese. • As discussed in an earlier chapter, kanban was developed at • Toyota and is a tool used to maintain a just-in-4me or JIT inventory system. • The basic idea is that when product reaches a certain level, a signal sent that prompts restocking from central storage or an order to be placed to the distributor. • The kanban system is quite simple but is oYen misused in spite of this simplicity. •  In fact, kanban is one of the most incorrectly implemented process improvement or inventory management tools.

Where is Kanban Best U,lized?

• Before implemen4ng a kanban system, it is important to know what a kanban is and what they are not appropriate for. • A kanban is a communica4on device that relays informa4on for the point of use to the supplier. • This can take the form of a purchase order from a supplier or a work order for manufacturing. • Kanbans are not appropriate for items that are rarely used, consignment items, safety stock, or as a long term planning tool. • Aside from those considera4ons, Kanban fits with typical inventory flow within a hospital.

Kanban Supermarket

•  In manufacturing an intermediate storage area between storage loca4ons an external distributor has been referred to as a “supermarket.” • The func4on of the supermarket is to respond to restocking signals from internal customers (departments) and send a restocking signal to external suppliers (ordering more supplies). • The supermarket probably sounds a lot like central storage within a hospital, that’s because they both provide the same func4on, to act as a sort of a buffer.

Kanban Supermarket

Figure 8-4

(2010). Larry Rubrich, 14 things to keep in mind when implemen4ng kanbans. Retrieved March 9, 2015, from hOp://www.reliableplant.com/Read/22368/implemen4ng-kanbans-lean. Reprinted by permission of the author.

Opera,onalizing a Kanban System

•  There are five generalized rules that should be followed when opera4onalizing a kanban system:

1.  A kanban system should not be aOempted without involving stakeholders within the value chain for the item.

2.  Ensure a quality product is being delivered to the customer. Defec4ve items will deplete the stock prematurely and add pressure to the supply chain.

3.  A kanban requires reliable support structure to func4on. If the kanban is an electronic system, then that system should be maintained and kept up-to-date.

4.  Kanbans should only be created for products with stable delivery requirements, short setups and short lead 4mes. In hospitals with a central storage, kanbans can poten4ally be implemented in all departmental storage areas.

5.  Kanbans may need to be adjusted periodically aYer implementa4on. They are simply signals to ini4ate restocking and based on usage paOerns the 4ming of that signal may need to be adjusted.

Case Cart Prepara,on as Restocking

• Case carts were developed as a way to efficiently manage inventory in the OR as well as procedure rooms. • Prior to a procedure, the case cart is loaded with all the typical supplies used for the upcoming procedure as well as physician preference items. • This insures that needed items are available in the OR and that unnecessary supplies are not taken out of storage. • The use of case carts allows for the beOer monitoring of par levels, and allows for automated reordering of standard equipment and supplies.

Case Cart Prepara,on as Restocking

• Since case carts allow for a system such as par to be used, low use items can be eliminated and inventory costs can be reduced because fewer items are needed on hand. • The space saved will increase efficiency within the periopera4ve department, as excess supplies are not clogging hallways or storage rooms.

Figure 8-5

Inventory on the Floor

• Typically, hospitals will store lower cost items that have a very high usage paOern on the nursing floor. • These items include, for example, syringes, commonly used pharmaceu4cals, gloves, masks, bandages, and emergency equipment. • Each of these items has various storage requirements – pharmaceu4cals need to be stored in a secure loca4on, whereas it is more important that gloves are stored in an easily accessible loca4on within each pa4ent room. • Emergency supplies are stored on specialized case carts, some4mes called crash carts, with all the supplies required to resuscitate an individual.

Consignment of Goods

•  Consignment inventory is inventory that is owned by a suppler but that the customer (hospital) is in possession of those consigned items. •  Consignment inventory allows the customer to avoid tying up capital in inventory. •  However, consignment does not eliminate holding costs associated with inventory. •  The costs related to storing and managing inventory are s4ll incurred, only the carrying costs are avoided. •  Consignment of inventory is used many 4mes in the peri-opera4ve areas where supplies, devices and even equipment are very costly (high price items). •  In a healthcare sepng, inventory consignment is best suited to products with a high turnover rate such as implantable medical devices (E.g.- ar4ficial knees, surgical screws)

Consignment Inventory Management System (CIMS)

• Using a CIMS, is one way that healthcare organiza4ons and medical device companies can work together for an op4mal outcome. • U4lizing a CIMS for products with high turnover rates insures that the healthcare organiza4on always has the latest implantable technology available. • Another poten4al advantage of using CIMS is that it reduces the workload for supply chain managers within the organiza4on.

Consignment Inventory Management System (CIMS)

•  In addi4on to medical device consignment mediated by device company representa4ves, there is a growing trend in healthcare where distributors are consigning medical supplies directly to a healthcare organiza4on. • This is occurring for several reasons, all revolving around the boOom line for hospitals in the face of declining Medicare reimbursement rates and recent pay-for-outcome programs. • This trend is compounded because declining reimbursement rates are also causing physicians to move from private prac4ce to direct employment within healthcare organiza4ons. This means that there are fewer physicians in private prac4ce for the companies to directly market their products.

Consignment Inventory Management System (CIMS)

• Advantages of moving some inventory to a CIMS model are: •  Products are kept current, and managing expira4on dates is managed by the vendor. •  Products are only reconciled and invoiced when they are dispensed. •  A larger quan4ty of inventory can be stored on site, elimina4ng the need for emergency delivery of out-of-stock items. •  Products are sourced directly from the manufacturer, which ensures the highest level of supply chain integrity. •  The product is always in stock and the need to borrow inventory from other facili4es is eliminated.

Distribu,on to the pa,ent

• Distribu4on to the pa4ent occurs when a caregiver retrieves items from departmental supply and uses them at the pa4ent bedside or at an affiliated pharmacy. • Of the three supply lines, medical/surgical, pharmaceu4cal, and capital equipment; only medical/surgical items and pharmaceu4cals are distributed to pa4ents. • The distribu4on can either take place bed side or from the hospital pharmacy, depending on the pa4ents posi4on within the con4nuum of care and the policies of the healthcare organiza4on.

Bedside

• Bed side distribu4on to pa4ents is the end point in the supply chain for many medical/surgical supplies as well as pharmaceu4cals. • Distribu4ng the correct medica4on and providing the highest level of care is a constant concern for a healthcare organiza4on. • Literally everything done throughout the en4re supply chain was done to support this.

Barcoding System

• Pa4ents are commonly issued a wristband with a bar code containing a unique iden4fica4on number upon admission to a hospital. • The bed side scanners are linked to mul4ple systems within the hospital and show pa4ent informa4on when their wristband is scanned. • Typically, this informa4on includes transfer data, pharmacy informa4on, laboratory results, and if available a decision support system. • The system automa4cally verifies that the user is authorized to dispense the medica4on and that it has not already been administered to the pa4ent, checks for medical alerts and automa4cally record the ac4vity within the pa4ent’s medical record.

The Five Rights

• Point of care systems, that are barcode enabled, at the most basic level verify what is known as the five rights. • Verifying the 5 rights, right drug, right pa+ent, right douse, right route, and right +me, as well as appropriately documen4ng that a pa4ent received a par4cular medica4on or treatment will increase pa4ent safety and the boOom line for the hospital through accurate charge capture.

Challenges of Barcoding

• Currently, only a minority of drugs contain barcodes directly from the manufacturer although this number is constantly increasing. • There is a growing trend where manufacturers are providing fewer medica4ons in a single dose form. • A lack standardiza4on of barcodes among the medica4ons which are available as single dose containers from the manufacturer. • There is no agreed upon standard for reading barcode technology and as such, exis4ng barcoding systems typically use proprietary technology. All this varia4on creates a need for home grown solu4ons to interface systems so that they are able to communicate and func4on properly. • Some specialty medica4on will always need to be boOled by the pharmacy within the hospital due to the needs of certain pa4ents.

Pharmacy

• Distribu4on directly to pa4ents at in-house or affiliated pharmacy provides a simpler charge capture mechanism than bedside distribu4on. • The chain of custody is also more secure because items are handled by less people before being distributed to the pa4ent. • One major concern with distribu4ng to the pa4ent at a pharmacy is that the pa4ent typically needs to go to the pharmacy to fill or retrieve their prescrip4on or medical supplies. • Pa4ent noncompliance leads to increased cost to the healthcare organiza4on if the pa4ent is readmiOed, as well as unnecessarily jeopardizing the health of the pa4ent.

Mail-Order Pharmacy

•  In recent years, a trend towards mail order pharmacies has taken hold. •  In fact, mail order pharmacies are the fastest-growing provider of prescrip4ons in the United States to insured individuals.

Performance Evalua,on

• The most common op4ons listed above may not be the best choice for your par4cular organiza4on or situa4on. • Even if your organiza4on chooses to use consignment, kanban, or par, how is that solu4on best implemented? • These ques4ons are as a result of a fundamental problem in supply chain management, performance evalua4on. • How do we choose the best solu4on and monitor its performance over 4me against alterna4ves to ensure we remain compe44ve? • There are three main approaches to performance evalua4on:

•  Analy4cal methods •  Physical experimenta4ons •  Simula4on or emula4on

Simula,on

• Simula4on is a powerful tool for modeling the distribu4on of items within the supply chain. • Simula4on is the clear op4on of the three main approaches because it gives an organiza4on the ability to test out many scenarios and choose the best op4on according to the simula4on to implement within the facility. • Some considera4ons when designing a simula4on are the loca4on of storage, capacity, what items are supplied at each level of fulfillment, policies governing the system and collabora4on with stakeholders. • Finally, it is important to stress the simula4on during tes4ng to ensure that the model holds up in a “worst case” scenario.

Charge Capture Outcomes

• Charge capture is a term referring to the recording of charges for items and services provided. • The process through which a hospital captures charge data involves mul4ple systems but the final system in the process is the pa4ent account system, where the charge descrip4on is entered and ul4mately charged to the pa4ent. • This inherent complexity of charge capture and the lack of a standardized process combined with the huge financial impact that charge capture has on an organiza4on makes charge capture a cri4cal area for improvement within most healthcare organiza4ons.

The Lean Methodology

• The Lean system is based around maximizing value to the customer (whoever a par4cular group is providing services to). • Understanding who your primary customer is and what they value is the first step in the lean process; where the ul4mate goal is to provide more value to that customer while using fewer resources. • Lean enables process improvement through a collec4on of tools and concepts that can be used to frame and improve processes within an organiza4on. • Another key tool in the lean process is the overall methodology for implemen4ng improvements.

Plan, Do, Check and Act (PDCA)

•  PDCA an itera4ve process central to implemen4ng lean quality improvement programs. •  In order to carry out a PDCA cycle with the best possible results, a proper team of experts on the topic needs to be selected. • Another lean term for the group of people mee4ng to discuss issues and how to improve them is a quality circle. • The en4re process of the quality circle coming together and using the PDCA methodology is summed up in what is known as A3 thinking.

A3 Thinking

• Although the exact structure of the report depends on the situa4on and the needs being addressed, the format is generally the same and includes the following basic sec4ons: •  Background •  Current situa4on and problem •  Goal •  Root cause analysis •  Ac4on items and implementa4on plan •  Result check •  Follow up

• Using a standard A3 style report will simplify the wri4ng process for proposals and status updates as well as general purpose repor4ng.

Informa,on Systems for Distribu,on Func,ons

• Distribu4on func4ons such as provided in PAR, perpetual inventory and case cart prepara4on are usually linked and interfaced with enterprise resource planning (ERP) or clinical informa4on systems. • All of these systems work together down to the points of care to ensure a safe, efficient, effec4ve and efficacious pa4ent care environment.

Follow the CoBon Ball

• How would a coOon ball package be restocked in a PAR method, Kanban method, in perpetual inventory method or as a consignment item? • Although coOon balls will most likely not be consigned, can you imagine how these various methods would work? • From the warehouse to the points of care, can you envision how a coOon ball travels through the system to the eventual assistance for a pa4ent by a clinician or care giver? • Going back to the con4nuum of care, how would coOon balls move from sourcing to use on a pa4ent at a point of care?

Healthcare Value Chain with Supply Chain Highlights

In the movement of the coOon ball can you meet the tenets of the value chain? Informa4on systems clearly play a major role but can the actual item, the supply chain item, move from source to pa4ent? Is the movement efficient, effec4ve and efficacious?

Summary

• The distribu4on of supplies throughout the healthcare organiza4on is perhaps the most complex por4on of the supply chain. • Distribu4on is also a key component to the culture of pa4ent safety. • From this point, the supply lines become much more complicated, with medical/surgical, pharmaceu4cal, and capital equipment interwoven throughout the facility. • Rather than crea4ng a ‘one-size-fits –all’ approach, the supply chain opera4on must aOend to the needs of the par4cular service of care in the healthcare organiza4on.

Discussion Ques,ons

Exercises

• What considera4ons would you think about when selec4ng a restocking method of distribu4on within a healthcare facility? • How would you possibly distribute coOon balls to points of care in a peri-opera4ve area, a medical and surgical nursing ward or to an outpa4ent clinic? • How would you explain the difference in PAR versus Kanban? • What would be the differences in a peri-opera4ve area versus an outpa4ent clinic with regard to distribu4on to points of care? • What considera4ons would be appropriate for a perpetual inventory system versus a consignment system? • How would you maintain chain of custody and inventory management of supply chain items at points of care?

Journal Items

• Search the World Wide Web and write a summary of the following within a healthcare context: •  Kanban •  Perpetual inventory •  Consignment •  Lean supply chain •  Supply chain and Pa4ent Safety