For hospitals, barcode system’s price tag may be bargain

The benefit of preventing potentially harmful and expensive medication errors may exceed the cost of implementing and maintaining a barcode system that monitors inpatient administration of medication. Hospitals that already have existing infrastructure or are at higher risk of adverse drug-related events may reap even more savings, according to a recent study.

“It is estimated that only 50 percent of hospitals in the United States use BCMA [barcode medication administration] partially due to a belief that the technology is prohibitively expensive and labor intensive,” wrote Julie Ann Sakowski, PhD, of the Sutter Health Institute for Research and Education in San Francisco, and colleagues. “The findings from this study provide information that can help guide decision makers in developing a business case for adopting and operating BCMA in the inpatient community hospital setting.”

Sakowski et al previously had found that warnings generated through a BCMA prevented medication administration-related errors in 1.1 percent of attempted administrations (Am J Health Syst Pharm 2005;62[24]:2619-2625). They built off those findings to explore the costs associated with implementing and operating a BCMA, with a retrospective analysis based on four community hospitals in one network that implemented the same system in adult inpatient acute care units.

They tracked costs from the initial planning through implementation and operation over a five-year period. The BCMA software was linked with each hospital’s pharmacy system to create an electronic record. Each site had fully implemented its BCMA by the end of 2008.

They determined costs by looking at financial records and interviewing key personnel. Costs included direct capital costs and personnel costs, all calculated in 2008 dollars. Time costs covered the time spent preparing and implementing the system as well as training. They used data from previous research to estimate the frequency and cost of adverse drug-related events and events avoided through use of a BCMA. They calculated cost as total cost per hospital and cost per BCMA-enabled bed.

Based on their analysis, implementing and operating a BCMA in a community hospital cost on average $40,000 per BCMA-enabled bed over five years. But if a facility already had an electronic pharmacy management system in place, the cost dropped to $20,000 per BCMA-enabled bed. Thirty-five percent of total costs were from initial capital outlays.

Looking at overall costs, they determined that 14 percent of total costs went to personnel in system planning, designing, training and technology monitoring.

An analysis by harmful medication events pegged the cost for each moderate to severe event averted at $2,000. They noted that hospitals typically absorb the cost of preventable adverse drugs events, which have been estimated between $3,100 and $7,400 (2008 dollars) per event by the Institute of Medicine and others.

“A 100-bed facility could anticipate that implementing and operating a commercially available BCMA system, including electronic pharmacy management and drug repackaging, would cost between $3.6 and $5.5 million over five years,” Sakowski et al proposed. “If implementing a new electronic pharmacy management system is not required, the five-year cost for operating a BCMA solution with the associated drug repackaging would be about $30,000 per BCMA-enabled bed, or $3 million at a 100-bed facility.”

They added that a variety of factors influence the effectiveness and cost-effectiveness of a BCMA. Those include the frequency of adverse events, opportunities to prevent adverse events, how hospital personnel respond to warnings (including run-arounds), work processes and technical malfunctions.

“Any errors introduced by the system or reduced efficiency from not using the system as intended would reduce the beneficial impact of BCMA on preventing errors, thus increasing the cost per ADE [adverse drug event] prevented,” the authors pointed out. “This reinforces the need for ongoing monitoring efforts to ensure the system is being used properly and operating as intended.”

They also suggested that the costs in the study may be underestimated because they do not account for knowledge gained from successive implementations within the hospital network. BCMA costs may differ in today’s market, and hardware and upgrade costs may differ by institution.

The study was published in the February issue of the American Journal of Managed Care.