Keeping track with point of care stations
By Nancy Torner
Sisters of St. Francis Health Services Inc.
It seemed too good to be true when one Sisters of St. Francis Health Services Inc. (SSFHS) hospital improved its supply charge capture, lowered its inventory levels and reduced overall supply expenses, all seemingly by installing automated, controlled-access dispensing supply cabinets.
A follow-up pilot study at two campuses of another SSFHS hospital obtained similar results using the same type of cabinets—the OmniSupplier from Omnicell Inc., based in Mountain View, Calif.
Now, SSFHS is installing these cabinets systemwide, says Matt Mayer, senior vice president for the SSFHS supply chain. “Everyplace we put this in, we’re measuring the before OmniCell impact and after OmniCell impact,” he says. In every case, performance has improved.
The pilot study started in 2007 in the emergency department at the Olympia Fields campus of St. James Hospital and Health Centers in Illinois, where the charge capture for chargeable items was less than 50 percent.
“After using it for one month, even with the learning curve, we jumped to 80 percent charge capture,” says Rick Daniel, administrative director of support services for St. James Hospital.
Based on an increase in gross revenue the first month of $188,144, additional annual gross revenue of $2.2 million is projected if the trend continues, he says. Potential gross revenue is used because it remains constant regardless of varying reimbursement rates for charges between departments, hospitals and states. SSHFS has 11 hospital campuses and corporate offices in Indiana and two hospital campuses in Illinois.
“Even though we see several million dollars just in the emergency departments for instance, with the cold, hard light of reality we know that we’ll probably get only half a million dollars,” Mayer says. “But it’s still half a million dollars.”
The emergency department at the hospital’s Chicago Heights campus joined the study a month later, increasing its charge capture in the first month from 57 percent to around 80 percent, resulting in a gross revenue increase of $64,277. A five-month lease to fully equip both campuses with OmniSupplier cabinets will cost about $3 million, Daniel says. Anticipated savings from using the cabinets will pay for the lease within 15 months. “That is how I got my finance folks to sit up and pay attention,” Daniel says.
OmniSupplier is an automated dispensing system that controls supplies at the point of use, says Robert Mullenger, senior product manager for Omnicell. Only people with permission can open the cabinets. Access to various areas inside cabinets can be restricted as well. The system runs on a computer server that centrally manages the dispensing system and can track individual users and patients, manage the inventory database and run reports on data collected. More than 50 pre-defined reports allow different users to extract and export information in detailed graph or summary form. Users also may create custom reports.
“It’s a turnkey installation. We set it up and put our software on it,” Mullenger says. “That software talks to these cabinets.” An appropriate person is delegated and trained to act as program administrator responsible for selecting system options and granting user access, and appropriate hospital staff members are trained to use the cabinets.
Users log in with a user identification and password. Upgraded versions allow login by fingerprint or swiping a badge. Guiding-light technology directs users to the cell and shelf location of items. The system automatically charges patients for and reorders the items. System reports show how much inventory is truly needed and tracks items taken.
Hospitals can lease or purchase the systems. Costs can range from $100,000 to several million dollars, depending on the number and size of cabinets, the central server installed and additional features desired. They are available in combinations of half, one, two and three cells. They can hold anywhere from about 100 line items up to 336. “It usually pays back within six to 12 months whether they buy one cabinet or whether they buy 50,” Mullenger says.
St. Anthony Memorial Hospital in Michigan City, Ind., was the first SSFHS hospital to install the cabinets. Gail Shaw, the regional director of materials management, “dribbled” them in over several years, Mayer says.
A convincing argument
In about 2004, after SSFHS standardized its materials and purchasing systems and item databases, it started benchmarking its hospitals on performance, and St. Anthony Memorial Hospital stood out, Mayer says. “Inventory levels seemed to be lower there, overall supply expenses seemed to be going down while everybody else’s were either staying the same or going up.”
The gathered data was presented in January 2007 to administration systemwide. “They were, as one would expect, a little bit skeptical,” Mayer says. This led to Daniel volunteering to host the pilot study, which led to the ongoing systemwide installation.
During the study, the average PAR at Olympia Fields dropped from a daily on-hand balance of about $30,500 to $18,900, saving about $11,600, Daniel says. Returning unused inventory from patient rooms to central supply earned a $15,000 credit. “That was just startup, just by putting the equipment in and setting their PAR values according to past history.” Running a daily usage report made it possible to limit on-hand supplies in cabinets to two days of inventory, giving the hospital a one-time reduction of $27,000.
Chicago Heights was able to reduce emergency department inventory by $12,777 and to return $11,131 in inventory for credit. Its one-time reduction from adjusting the amount of on-hand supplies was $23,908.
“In the event that the ER staff is running out of a supply, they can actually pull that item up on their OmniSupplier and it will tell them the nearest location of a machine that has it,” Daniel says. If 10 cells or 12 cells are tied together, even a new nurse can find an item quickly by spelling the item on the touch screen. Once the system recognizes the item, lights flash to identify the correct door and item.
The more input from nurses in stocking and organizing cabinets, the greater the efficiency and savings.
“Down in materials, we know the item by number and a location and a cost. We don’t have any idea what the stuff is used for,” Daniel says.
Nurses need to build the cabinets so that items are placed most logically and conveniently and to create a blueprint for item placement that central supply staff can follow when restocking. “It’s going to take a good three months of using the cabinets to get the usage right,” he says.
The use of the cabinets have automated the former bar-code sticker system for charging patients and changed the habit of nurses taking supplies just in case items are needed later. Reports show if a nurse takes 10 items but pushes the corresponding cabinet button only once, the other nine unlogged items aren’t traced to that specific nurse.
Benefits of accountability
Overall benefits of the cabinets have made nurses some of the system’s greatest supporters.
“We were wheeling cabinets down on one of our telemetry units two weeks ago to get them going the first day, and as my guys wheeled the cabinet past the nurses’ station, they stood up and applauded,” Daniel says.
Extra cabinets will be set up for ambulance drivers, who previously had open access to hospital supply items they used on patients brought to emergency departments. Each firehouse will have its own code. “We won’t know which driver went in, but we’ll know what firehouse went in,” Daniel says.
Heavy involvement by the IT department also is crucial to interface with existing materials management, financial and patient charging systems. “The things that went on behind the scenes before the cabinets were plugged in were mind boggling,” Daniel says. Because the cabinets are a standard, systemwide initiative, SSFHS has dedicated staff to oversee it.
“They’re not magic boxes,” Mayer says. “You need to have a good person overseeing them to make sure the machines are operated the way they are supposed to be, that stocking is appropriate, to make sure the nurses know how to use them and that they’re running the reports to make sure that everything is happening the way it’s supposed to.” Systemwide installation is about 30 percent finished.
Meanwhile, Mayer says, “We’re going to keep measuring and we’re going to keep watching it and a year from now we’ll have an even better story to tell.”
This article 1st appeared in the April 2008 issue of Materials Management Magazine.
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