Title: Patient Safety Improvements through Real-Time Inventory Management

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1 Titl: Patint Safty Improvmnts through Ral-Tim Invntory Managmnt Author: Lynda Wilson, Administrativ Projct Analyst/Crtifid Six Sigma Black Blt Mrcy Ds Moins - Mrcy Hart Hospital 411 Laurl Strt, Suit 1225 Ds Moins, IA (work) (cll) (fax) Background knowldg Acut car hospitals ar constantly challngd with improving patint safty and utilization of rsourcs. In particular, administrators ar taking not of th Cath Lab, as it is oftn considrd to b th most tchnologically advancd of th intrvntional suits, frquntly holding th largst budgts for advancd mdical quipmnt and supplis. With significant invstmnts in lab rnovations and nw build-outs, cardiovascular suits ar now dsignd to xpand th numbr of srvics offrd, thus incrasing th nd for accurat and fficint managmnt of nwly purchasd quipmnt and supplis. Local problm Th nd to ffctivly manag an vr growing volum and complxity of invntory for intrvntional suits had rachd a nw lvl of urgncy at Mrcy. With advancs in mdical quipmnt rsulting in many nw product rlass vry yar, all with tim snsitiv xpiration dats, th task of managing xpirations and rcalld products had bcom a daunting task for our staff. A tam consisting of an invntory managr and on invntory tch was rsponsibl for managing th 2,200 mdical itms ranging from $100 to $32,000. Although our invntory staff is dtail orintd and undrstands th importanc of thir rol, it was unralistic and unfair for th hospital to xpct that thy could flawlssly kp track of all ths itms with a systm that was largly basd on manual procsss. With thousands of products on th shlvs, w knw w could no longr afford to put patints at risk by not having th lvl of product visibility ndd to mt th Joint Commission s patint safty rquirmnts. Our gratst concrns lay with xpiration tracking, rcall managmnt and nsuring th right product is availabl at th right tim. Intndd improvmnt Th goal of th projct was to automat th procss of controlling and managing physician prfrnc itms to gain accurat, timly information on product availability and xpiration tracking with th undrlying goal of improving patint safty. In addition to information accss, th automation of invntory managmnt tasks would fr up a significant amount of clinical tim whrby nurss and tchs could spnd mor tim in th room, caring for patints. My rol as an Administrativ Projct Analyst/Crtifid Six Sigma Black Blt was to b th projct managr. I had xcutiv support from Al McClatchy, VP Mrcy Hart Hospital, as wll as th ladrship in th Cath Lab, including Pam Bhnk-Schaad, RN, Cath Lab Dirctor; Nancy Turnr, Invntory Managr, Cath Lab; Bill Zika, Invntory tch, Cath Lab; Mmbrs from th IT Spcial Projcts tam and Matrials Managmnt wr also instrumntal in th succss of th projct. As a Six Sigma Black Blt, I am traind to collct data, turn it into usful information and thn mak smart businss dcisions basd on th information. To accomplish this, I ndd to automat th invntory managmnt procss to collct accurat data to us in making important dcisions rlatd to product availability and lot and srial # tracking. I longd for a tchnology that could accomplish this goal. With th availability of RFID invntory solutions, my dram has bcom a rality.

2 Planning th intrvntion In 2008 alon, Mrcy Mdical Cntr prformd ovr 20,000 surgris, narly 14,000 Cath lab procdurs and ovr on quartr million radiology procdurs. With such a larg numbr of mdical procdurs bing prformd, w must stock a wid array of products. Th hospital ndd a solution that could track th ovr 2,200 mdical itms ranging from $100 to $32,000 and hlp improv product mix for physicians whil rducing invntory lvls, find a mor accurat and fficint mans for tracking xpiration dats, liminat stock-outs and dcras product wast and incras charg captur. Prior to implmnting an RFID systm, th Cath lab had bn using a barcod-basd invntory managmnt systm that was manual and tim-consuming. Managing invntory took a commitmnt in tim from all mmbrs of th lab. Th invntory clrk had to manually count th itms on th shlvs, whil also rviwing xpiration dats and making marks on product packaging of thos products du to xpir within a spcifid timfram. Ths manual procsss wr prvnting us from having accurat information in which to bas ordring and billing dcisions and cratd a complx workflow that forcd clinicians to b away from patint car. W found a provn solution in WavMark, Inc. with its Clinical Invntory Managmnt solution that is usd by labs around th country. W bgan our rlationship with WavMark by conducting a pilot of intllignt cabints tracking high valu products usd in cardiac cathtrization procdurs. Post-pilot th dpartmnt xpandd its us of RFID to includ covrag for all coronary, priphral high dollar products as wll as CRM dvics lik pacmakrs and ICD s. With built-in RFID radrs, ths cabints track itms placd on th shlvs and thn updat th invntory status vry 20 minuts. WavMark CIMS wb-basd softwar works in tandm with ths cabints to indpndntly analyz and manag invntory, liminating th nd for manual intrvntion from staff. Systm Ovrviw: How RFID Systm Works WavMark CIMS is a ral-tim invntory managmnt solution providing hospitals lik ours with complt visibility into invntory disposition. To collct and mak this information availabl, WavMark installs RFID nabld cabints in th hospital to stor and track all products. Each product box is taggd with a passiv RFID tag and rgistrd in th WavMark databas. Each tag contains its own uniqu ID numbr. Th ID numbrs ar associatd with a bar-cod numbr applid by th dvic's manufacturr bfor shipmnt; hospital mploys scan th bar cod with a bar-cod radr, and that data is corrlatd with th RFID tag numbrs. Th intllignt cabints hav built-in RFID antnnas that rad taggd itms on th shlvs vry 20 minuts and fd th data to th WavMark databas. Th cabints com in varying form factors to accommodat diffrnt sizd products. Bcaus th cabints automatically rad all th tags numrous tims daily, th systm has a nar-ral-tim count of invntory lvls, which continually chang whnvr an itm is rmovd or put into th intllignt cabints. This nabls us to track which stnts ar pulld out for patints, which ar ultimatly usd and which ar put back. Typically, mor than on stnt is pulld for a patint bcaus physicians don't know th xact typ and/or siz of stnt that will b usd until th implantation bgins. Onc th physician dcids to us a product, th clinicians wav th taggd box at th Point of Srvic radr in th control room which rcords usag of th itm. If th itm is xpird or on rcall, thr is a loud sound, alrting th usr to th problm. This alrt nhancs our ability to protct vryon at th tim it mattrs most, th point of implantation. Onc th procdur is compltd, tchs rturn th unusd stnts to th cabints. Somtims, howvr, unusd stnts arn't rturnd to th cabints and turn up missing. By chcking th WavMark wb-basd rports, invntory prsonnl can dtrmin whn th stnts wr rmovd, making it asir to track thm down.

3 Outcoms In Dcmbr 2005, as a rsult of a supplir rprsntativ s introduction of WavMark to Mrcy Mdical Cntr s Cath Lab, a jointly sponsord trial bgan that rsultd in th larg-scal commrcial roll-out now implmntd. Th initial installation was just on RFID cabint, in th Cath Lab, rading only on supplir s taggd product. In this scnario, th supplir providd ky product data to th RFID systm to nsur products could b accuratly trackd. In addition, th supplir providd partial funding for th pilot projct in an ffort to bttr undrstand th succss of RFID for supply chain managmnt. Th trial was lad by a tam from th hospital, th supplir and th RFID vndor, all collaborating on th nw and stramlind workflow RFID tchnology affordd all partis. Th trial was mt with grat succss as th lab dirctor, along with othr constitunts wr abl to s xactly how many and whr products wr locatd in th cardiovascular suit. A 40% rduction in wast was rcognizd from xpird products alon. This nw visibility nabld a largr mix of products to accommodat physician prfrncs and fficint tracking of lot, srial and xpiration dats to improv patint safty. On of th ky lssons larnd was w didn t know what w didn t know. W had a strong hunch that products wr unaccountd for, but had no way of gtting accurat data to support th suspicion. On avrag, w found that w had 12 unaccountd for itms pr month, annualizd at clos to $200,000 of lost rvnu. With RFID, all taggd itms ar now accountd for and products no longr rmain missing for vry long. As a rsult of accurat information bing radily availabl, th clinical workflow has bn gratly stramlind and is improving staff satisfaction. No longr must clinicians manually count itms and conduct data ntry on products currntly on th WavMark systm. A tim study was conductd and w calculatd that th us of RFID rducd th manual labor tim by 70%, th quivalnt of 1.5 hours pr day for 5 days. With th automation of ths onc manual tasks, nurss and tchs ar spnding mor tim whr thy want to b, with patints. Th array of rporting tools availabl allows th lab managrs to smooth ordring pattrns, fulfill physician prfrncs with a gratr varity of products, and provids multipl alrts of xpiring products. Whn it coms to patint safty, th rports and alrts can litrally b lifsavrs. With products xpiring all th tim, and not just at th nd of th month, it maks it virtually impossibl to manag this manually. Th abundanc of rports and audibl alrts nsurs w captur xpird itms bfor thy vr rach a patint and kp us compliant with th Joint Commission. Barrirs Encountrd Our gratst challng was th far of th unknown. RFID tchnology is quit nw in hospitals, with th prpondranc of installations using activ RFID tchnology that is usd for tracking capital quipmnt throughout th hospital. Passiv RFID is a bttr fit for invntory managmnt and is a compltly diffrnt typ of application. WavMark standardizd on high frquncy RFID, which was rcntly announcd by ANSI as an HIBCC standard for us in mdical sttings to avoid any intrfrnc with implantabl dvics. Thr was som confusion among clinical and administrativ staff rgarding RFID and its rliability. Thrfor, it was incumbnt upon th tam to dvis and xcut an audit procss that would provid vidnc of passiv RFID s accuracy within a Cath Lab nvironmnt. Wkly audits comparing a hand count with th cabint-gnratd count wr conductd, all with 99.9% accuracy. Scondly, th qustion of laying an automatd invntory systm ovr an xisting manual procss fding a Lawson matrials managmnt systm raisd qustions about procss chang and flow. WavMark was abl to dmonstrat that 90% of data that gos into th WavMark systm is collctd automatically not scannd in or manually kyd in. As of Jun 2008, that two-way intrfac to th Matrials Systm is

4 oprational and snds RFID-gnratd rquisitions dirctly into th MMIS, liminating at last an hour a day and th rrors associatd with manual product ordring. Tchnical challngs wr minimal, in that th RFID systm cam with all th ncssary hardwar and componnts to complt th systm. At installation, WavMark dlivrd and st up th smart cabints, placd th ncssary RFID tags on th products, rgistrd thm into th databas and traind usrs. From thn on, th cabints continuously rport on th product disposition. All hardwar is ownd by WavMark, thrby rducing th obstacl prsntd by a lngthy capital cycl and th far of buying obsolscnt tchnology. Challngs Facd Prior to using RFID, th hospital had bn using a bar-cod basd invntory managmnt systm, which was imprcis bcaus it rlid on invntory data collctd manually. Evn with its shortcomings, staff was comfortabl and familiar with th currnt procss and wr complacnt to adjust to its limitations. I was not. As a quality profssional, I knw thr had to b a bttr solution to addrss our nds of accurat information and ral-tim product visibility. Having bn through th valuation procss bfor, th hospital was abl to asily narrow its slction critria. Th introduction of th RFID systm ultimatly implmntd was mad by a mdical dvic supplir, whom was also valuating th us of RFID for similar rasons of invntory control. Having limitd knowldg of how RFID was usd for invntory managmnt, a fair amount of du dilignc was ncssary, rquiring dirct communication with th RFID vndor from th onst. Intrnally, th collaboration across dpartmnts (cath lab, matrials managmnt, financ) was ncssary and critical to undrstand th adjustmnts in workflow, th patint safty improvmnts and th financial outcoms. Although thr was som rsistanc to chang, RFID quickly provd itslf worthy. Th first phas includd six RFID nabld storag cabints in th hospital's priphral vascular storroom, fiv in th cardiac storroom and on apic in its four cathtrization procdur rooms. Th vndor providd th installation of cabints and th RFID tagging of xisting invntory. Th mdical dvic supplir whom rcommndd th systm providd thir products pr-taggd, whil invntory staff was rsponsibl for tagging subsqunt ordrs as thy wr rcivd. POS intrrogators wr placd in two control rooms, whr hospital prsonnl documnt ach patint's cas. Th cabints and th POS intrrogators work togthr to collct data on invntory lvls and usag tracking to fd into th systm s databas for ral-tim analysis of invntory status. Summary Bcaus th us of RFID has affordd so many bnfits, its us has bn consistntly xpandd to track mor products in mor labs. W xpandd our us of WavMark CIMS to includ th tracking of products in th EP Lab, for a total of 2200 itms ach ranging in cost from $100-$32,000. On of th initial goals in implmnting a tchnology was to provid visibility into how much of ach product is availabl and whr xactly it is locatd, so w could nsur th physicians had th right products for th right procdur to adhr to th Joint Commission s tim out procdurs. Not only did it accomplish th right-sizd invntory goal, targt invntory lvls wr rducd by 25%, for a dollar savings of almost $400,000 annually. For xampl, th us of th Bulk Buy calculator has savd th dpartmnt almost $300,000 in prparing th right shopping list basd on accurat usag data. A significant portion of th Cath lab invntory is consignd product, which dos put th onus on us to proprly track xpirations as wll as usag to proprly rconcil itms usd or rturnd. Consignmnt dos hav its advantags as a mthod of product managmnt but thr is still a nd for hospital staff to

5 monitor and rconcil consignmnt agrmnts and actual invntory lvls. W stay right on our contractd lvls bcaus of th visibility w gt from th RFID systm which avoids th problm of owning stock abov consignd lvls or owing th sals rp a PO for itms blow par. W ar now rlivd of th strss of manually tracking xpiration dats whrby th RFID systm automatically tracks xpiration dats as wll as lot and srial numbrs. Thr is a compounding alrt systm at th Point of Srvic stations to nsur xpird products nvr rach a patint. This has contributd gratly to our ability to nsur a high lvl of patint safty outcoms. In addition to th patint safty improvmnts of ral-tim xpiration tracking, w hav savd ovr $30,000 and rcognizd a 40% rduction in wast from xpird products. Improvd clinical workflow also has a dirct impact on patint car -- with nurss and tchs spnding lss tim on administrativ tasks, thy ar abl to provid mor dirct car to patints. RFID and an intllignt, wb-basd systm, has bn an invaluabl tchnology for nabling our ongoing fforts to safguard patint safty. Intrprtation Upon installation, an abundanc of information bcam immdiatly accssibl, rquiring th propr intrprtation to truly undrstand th valu of this nw found visibility. Th RFID systm continuously tracks th status of products as thy ar stord and rmovd from th cabints and th POS radrs track th usag of products, with th rsulting information prsntd in th form of rports in a wb-basd viw. If th rports ar not proprly intrprtd and th information applid, thn th systm provids littl valu. This rality was th primary rason for th diffrncs btwn obsrvd and xpctd outcoms Asid from th immdiat nd to manag xpirations and rcalls, RFID providd a walth of information with which w could mak sound financial dcisions. It was concludd that a crtain amount of historical data about 3 months --was ndd to nabl th propr xcution of dcisions that would justify th financial bnfits of th invstmnt. Whil indpndntly dpartmnts wr having succss with applying th information, a mans to intgrat th data with xisting hospital systms bcam an obvious ncssary stp. During an audit using th systm, th hospital analyzd four months of data collctd from th RFID nabld cabints and POS radrs, as wll as th patint billing systm. In doing so, it was discovrd that svral itms had bn scannd for particular patints but nvr chargd for. W found out, aftr th fact that th itms couldn't b usd for thos patints, and whil thy wr supposd to b rturnd to invntory, thy wrn't. W might hav bn abl to rturn thos itms to th vndor, but didn't. And now, thos ar lost dollars. To prvnt such a problm, th hospital rcommndd an intgration of th RFID systm with its matrials and patint billing systms. Thus, whnvr a product is pulld from a cabint and actually usd, it will automatically b chargd to a patint bill. This intgration would also provid an lctronic rcord of th xact itm usd on a particular patint, which can b compard with actual invntory at any givn tim. That would mak it asir for th hospital to track itms pulld from th shlvs but ultimatly not usd or rturnd to invntory. Th opportunity cost of not using th RFID systm was substantial compard to th cost of th intrvntion. Th systm immdiatly paid for itslf and is fully fundd through its ROI. In th first yar, w rcognizd a hard dollar savings of mor than $500,000 in rducd wast, improvd charg captur and adjustd invntory lvls. Soft savings in labor was also immdiatly rcognizd.

6 Conclusions Th implmntation of RFID and ral-tim invntory and usag tracking has grat practicality in spcialty labs whr critically important or high-dollar valu consumabl mdical supplis ar usd. This has bn dmonstratd by th xpansion of th systm to track additional products in th Cath lab, as wll as products in th EP lab. It is likly that this tchnology will also b implmntd in th oprating room. Financial Considrations Contrary to most information tchnology solutions, this systm is availabl on a subscription basis and rquirs no upfront costs or maintnanc fs. Th absnc of capital quipmnt costs continus to mak this a cost-ffctiv solution. With th as of us in downloading th data from th systm, w can marry th information from svral othr data systms to analyz data financially and statistically. Th information is invaluabl whn you ar talking about multi-million dollar invntoris.. Prior to implmntation and upon subsqunt xpansions in implmntation, an ROI analysis was conductd, providing a thorough valuation of th financial cost savings th systm provids. Th subscription cost of th systm is an oprating xpns, not a capital quipmnt xpns and immdiatly paid for itslf and continus to b fundd through ROI savings. Just 18 months aftr th initial implmntation, including 2 xpansions of th systm, an imprssiv 568% ROI was rcognizd. Th biggst savings aras cam from improvd charg captur du to automatd usag tracking and savings in product costs by xcuting bulk buy opportunitis. Invntory rduction by right-sizing invntory lvls and limination of wast also contributd to cost containmnt. W continu to monitor and implmnt nw aras to achiv bttr invntory managmnt and patint safty. Nxt stps ar to xpand into othr aras of th hospital whr invntory is shard with th Cath Lab. Th ROI for this xpansion will continu to support th funding for this ndavor as w mov forward through 21 st Cntury tchnology in Halthcar invntory managmnt. ###

7 Appndix Figur 1. How RFID Works Figur 2. RFID Implmntation Timlin

8 Figur 3. Joint Commission Tim Out Protocol Figur 4. Stting Targt Invntory Lvls for Tim Out Protocol

9 Figur 5. Rduction in Targt Invntory Lvls 2500 l v L r y t o n v n I t r g a T Jan 2008 Jun Currnt Targt Invntory Proposd Nw Targt Invntory Figur 6. Product Expiration Tracking

10 Figur 7. Product Expiration Alrts

11 Figur 8. Automatd RFID Usag Tracking Capturd $193,968 in Potntial Lost Rvnu in Unaccountd for Itms. Figur 9. Manual labor savings Comparison of th numbr of stps using various invntory systms s p t S f O r b m u N RFID rducs manual labor by 70% RFID Invntory Solution Barcod Systm

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