|Between 11 cath labs at two William Beaumont hospitals, physicians perform more than 12,000 procedures annually. Barbara Stevenson, a material coordinator at the Royal Oak, Mich., facility, takes a Cypher drug-eluting stent from the Pyxis inventory control system, an automated, transaction-based, closed system from Cardinal Health.|
As multifunctional cardiac catheterization labs see new cardiovascular products constantly arriving and old ones getting pushed to the back shelves, administrators need a well-organized storage space, as well as a sophisticated method for integrated inventory management to control costs and revenue.
As healthcare costs continue to rise, hospitals and facilities are looking to trim costs without compromising the quality of patient care and safety. Supply chain management is a strategy many facilities have incorporated since inventory can represent 20 percent or more of a hospitals’ operating budget. To keep within budgets, control over inventory is a key function within any hospital, but especially in high procedure volume areas like operating rooms, emergency departments and cardiac catheterization labs.
In light of this, the pressure to pinch pennies and reduce costs is fierce for cardiovascular (CV) administrators, particularly given the increasing variety of products that CV administrators and inventory control managers must stock. The trick for inventory teams is to maintain a balance between the latest technology to come online and the products that already stock their shelves. And CV administrators must do this in a way that keeps physicians happy while staying on budget.
Eliminating the guesswork in supply chain management is critical for the cath lab environment because the cost of inventory within the labs is typically higher than other areas of the hospital. “Keeping inventory levels and supply expense low is a main function, but balancing that with enough inventory for physicians to use on hand is the double-edged sword,” says Renee Bouren, assistant director of clinical inventory at William Beaumont Hospitals in Royal Oak, Troy and Grosse Pointe, Mich. The three-hospital system has 1,711 licensed beds and 12 cath labs between them. The volume for the Royal Oak and Troy hospitals (Grosse Pointe’s single cath lab numbers are insignificant) is more than 12,000 procedures annually, including diagnostic caths, interventional cardiology and peripheral vascular procedures.
To control inventory, the cath labs utilize Pyxis, an automated, transaction-based, closed system from Cardinal Health. At Royal Oak, the hospital has installed two Pyxis units in each of the eight labs, and another 20 in an outer core. At Troy, they have two units in each of the three labs, and another eight in an outer core.
When nurses or technologists need an item, they go to a unit and pull up the patient record through the Pyxis computer at the station. Once the patient’s file is chosen, the doors to the supply cabinet are unlocked, the nurse hits the “take” button, the inventory is decremented and the charge applied to the patient’s bill. If a product is not used, the same thing is done in reverse, adding a credit to the patient’s bill and to the inventory.
Challenges do exist, Boren admits, particularly for oversized products, which require the Pyxis cabinets to be customized for them to fit. Having the space to add new products also is a challenge. Because Pyxis is a closed system, new items cannot be added without first depleting items from existing inventory. Bouren and her team are currently preparing for the influx of new drug eluting stents (DES) due to hit the market soon. One option they are considering is to limit the number of DES vendors, rather than carry every type of stent.
Despite theses challenges, Bouren rarely runs out of stock. The cath labs turn inventory about eight times a year, which is high for a cath lab, she says. Her inventory on any given day can be close to $2 million, and sometimes $3 million. They count inventory levels every week, a job easily done with the automated Pyxis system. Bouren also credits her staff, which is 98 percent compliant in keeping in line with inventory control policies.
“We look for expired product once a month during our physical inventory which includes counting asset items located outside of Pyxis,” Bouren adds. “We keep a very low volume here—mostly ‘just-in-time’ inventory, but we do a complete physical inventory and report it to the eight-member senior leadership financial team.”
Assessing real-time needs
While the automated closed Pyxis system works well for William Beaumont, the University Health Care System in Augusta, Ga., found that Pyxis could not accommodate its need to track high-dollar/high-turnover items like coronary and peripheral stents. Currently, Pyxis is a house-wide system within the 551-bed non-profit community hospital, installed in surgery, radiology and the six cath labs, according to Teresa B. Waters, director of cardiovascular services.
As an adjunct solution to Pyxis, the hospital chose to implement a radiofrequency identification (RFID) inventory management system from WaveMark. Product information is captured from the bar code and assigned to the WaveMark RFID tag. A continuous read-cycle captures inventory levels as products are removed or returned to the shelf. An item taken from a WaveMark cabinet is listed as “pending” until it is scanned at the point of care. Any item with an outstanding pending status must be manually tracked down to discern if it was used, misplaced or not returned to the shelf.
Mike Brown, director of materials management at University Health Care System in Augusta, says that the Pyxis system did not work for the stents mainly because of the variety of sizes—one stent family could have 50 different product codes. “We could not afford to buy or consign enough stents to fully outfit each procedure room within the six cath labs,” he says. “So the hospital decided on a centralized location for these.”
Keeping an accurate account of stents is particularly important because some have only a three-month lifecycle, says Chris Lucas, cath lab inventory coordinator. “With so many product codes and the possibility that some could not turn over before their expiration date, it’s critical to keep track of them,” Lucas says. Prior to installing WaveMark, inventory for expiring stock had to be done on a monthly basis. With the RFID system, reports can be generated daily.
Lucas notes that another advantage of WaveMark is the ability to track high-dollar/low-turnover items such as peripheral debulking devices, rotablator burrs and beta-radiation therapy catheters—items that can sometimes “slip through the cracks” because of their infrequent use.
The hospital conducted an ROI assessment before choosing WaveMark, looking at areas such as inventory reductions and charge capture. After a three-month trial, the cath lab saw a total savings of $101,000, which translated into an annual ROI of $55,000 after the annual WaveMark fee of $46,000 was deducted, according to Waters.
Personalized inventory database
While RFID has many benefits, one of the downsides is the special tags that must be purchased and affixed to each item. Oftentimes, vendors will perform this function to current inventory, but staff must then take care of subsequent incoming products. To overcome this drawback, the Knight Center for Interventional Cardiovascular Therapy at the Massachusetts General Hospital Heart Center in Boston opted for VueTrack from VueMed. The VueTrack system uses the existing manufacturer bar codes, which provide a description of the product, an expiration date and a lot number. Inventory in the six-room cath lab can be tracked as it enters or leaves a room and par levels can be created for each product. “As products come in, we scan them into the system,” says Rose M. Guanci, CV tech and inventory manager. “Each room has a scanner and as we scan the barcode, it is reflected in the patient’s chart.”
Prior to going live with VueTrack, VueMed representatives input the current inventory into its database of barcodes, which the company updates as new products arrive or changes occur to existing products. Each time a product is added to the inventory, VueMed inputs that product into the database. The cost for the system is $6,000 a year, per station, as well as a one-time installation and training fee.
Guanci adds that she can generate a daily consumption report on in-stock inventory, as well as inventory on consignment. “We were running out of stock or ending up with a lot of expired product,” she says. “Now, I can get our daily usage report, am able to set par levels, check on expiration dates and keep track of products borrowed from different departments or outside hospitals.”
Staying on track
CV administrators can tackle the dilemma of controlling costs within the cath lab supply chain while providing quality products by understanding what supplies are being used and when they are being used for each patient. With myriad ways to monitor and track inventory in the cath lab, many facilities are finding sophisticated methods, including RFID, barcode scanning and additional inventory management systems. As time wears on, the market for integrated inventory management systems within the cath lab is only sure to become populated with even more advanced technologies designed to keep track of high-dollar items and keep costs under control.
|Key strategies for negotiating inventory contracts|
|Make sure physicians and administrators are on the same page. Work with physicians to understand their needs and communicate the needs of the hospital to them. By creating a collaborative, collegial environment between purchasing and cardiology, a department can ensure that physicians have the products they want for patients, while taking pricing out of the equation as the defining element.|
Establish a fair hospital market price for each commodity. For major physician-preferred products like pacemakers, ICDs and coronary and peripheral stents, establishing a fair hospital market price in collaboration with physicians eliminates headaches later on when vendors balk at selling products at the established price.
Get a clear financial picture. Negotiating an advantageous contract requires having sound, organized financial information on hand so administrators can easily understand what products are being purchased at what price and to avoid being overcharged for a particular product or service.
Commit to what you can deliver. While vendors are focused on increasing their market share, departments should not make commitments for products or services that do not generate revenues.
Maximize consignment. With consignment inventory, inventory is in the possession of the customer but still owned by the supplier. Inventory is only purchased after it is used, enabling administrators, to free up capital and stock shelves with what is needed, when it is needed.