The Consultant Pharmacist: June 1999 | Cost Control at Your Fingertips

The Consultant Pharmacist is published by the
American Society of Consultant Pharmacists.

COST CONTROL AT
YOUR FINGERTIPS:

A Second-Generation Automated Pharmacy System

Now that we have officially entered the era of managed long-term care with the transition to the Medicare nursing facility prospective payment system (PPS), the practice of consultant pharmacy has forever changed. Pharmacists now find themselves taking on a new role—one many of us never envisioned. Not only does our responsibility now lie in the provision of pharmaceutical care to the geriatric population, but we are also expected to serve as "gatekeepers"—key players in efforts to control the rising costs associated with providing quality health care.

Clinicians and Cost Cutters

Like it or not, we are on the front lines of a wave of heightened emphasis on cost control that is redefining pharmacy practice and the entire health care playing field. Today, optimal cost-effectiveness is a very close second to clinical appropriateness as a driver of drug therapy selection. How well we meet this two-pronged objective will largely dictate the continued evolution of our profession and the scope of practice opportunities in the years ahead.

With every clinical decision and recommendation we make comes a responsibility to our patients and clients to manage not only a disease state, but a spreadsheet as well. This was a role once left to the case managers, administrators, and accountants. After all, we became clinicians because we envisioned our practice to encompass management of patients’ drug therapy, prevention of drug misadventures, and clinical interventions leading to improved outcomes. Most of us received no special training in negotiating pricing and reimbursement. But now we find ourselves developing innovative programs and taking advantage of automated technology to the fullest extent possible—all in an effort to control medication-related costs and free up more time to spend with the elderly we serve.

PPS Applies the Pressure

As a result of the implementation of PPS last summer, many of us are reevaluating the efficiency and productivity of our operational centers, while we formulate plans to acquire a greater share of our regional market. In the highly competitive long-term care pharmacy arena, this often means developing strategic mechanisms by which we may service institutional facilities at greater distances from the main operational center, while maintaining our profit margins.

Not only must we continue our emphasis on controlling our own costs and profitability, but our clients will increasingly demand that the medication services they provide in partnership with pharmacy providers rise to an even higher level of cost-effectiveness. Many client facilities now expect the vendor pharmacy to assist them in reducing their own costs associated with providing care, in return for allowing the pharmacy to share in the profits that accrue through resident care activities. This is where a little innovation can pay big dividends in securing a contract—and an in-house automated pharmacy system can often help cement the deal, especially if the system can help reduce pharmacy operational costs, as well as the nursing facility’s operational costs.

Bilateral Cost Reduction

Clearly, automation of drug distribution and related processes will be an increasingly critical part of pharmacists’ efforts to make an impact on both sides of the cost reduction equation. Over the past decade, manufacturers of automated equipment have made tremendous strides in expanding and enhancing the capabilities of their medication dispensing systems. Pharmacists considering a step toward an initial or expanded investment in automated equipment should carefully assess and compare the specific capabilities of these and other available systems in light of the patient population they serve, their own resource and operational constraints, and the needs of their individual customers.

The system my pharmacy uses is the Envoy Automated Medication System manufactured by Houston-based KVM Technologies, Inc. The system is specifically designed to meet the medication management needs of both the long-term care pharmacy provider and the nursing facility. Envoy is a "virtual pharmacy system" designed to reduce pharmacy and nursing labor cost, control medication cost to both the patient and the facility, and minimize medication diversion and waste while improving dispensing accuracy.

Envoy is based on a Windows NT operating system capable of interfacing with most mainframe dispensing systems. Not only does its software support formulary compliance; it also enables the pharmacy to generate a mountain of valuable information relevant to medication use by the patient, facility, and physician, as well as packaging and billing information. Using the system’s integrated computer terminal, a pharmacist can easily access and manage the system on site, or from a remote location via an online modem, thereby minimizing staff time demands.

The Envoy system allows the pharmacist to remain in complete control while granting onsite authorization, entering orders, setting up medication passes ("med passes") and packaging medication, and conveying information to onsite nursing staff.

A ‘Virtual Pharmacy’

In a nutshell, here’s how the system works. A pharmacist—either on site or at a remote location—receives an order for a medication. The order is entered into the system. Upon release of the correct order by the pharmacist, the robotic vacuum system arm selects the appropriate medication from one of the system’s 176 universal medication containers. Once the dose has been selected by a dedicated silicone probe, it is transferred to an envelope (MedView) labeled with the patient’s name and required package labeling. The envelope, which has a plastic window to facilitate medication identification, is then barcoded and dispensed.

The system we use is capable of dispensing both single- and multiple-medication envelopes, providing lots of flexibility and versatility. For some facilities and providers, the system’s capacity of 176 medication containers may first appear to be a limiting factor. But for those seeking a mechanism to maintain strict formulary compliance, the limited capacity may be an advantage.

Each container is equipped with a piggyback refill cartridge, which automatically releases bulk medication inventory into the main dispensing container after the last dose has been utilized. This process eliminates the possibility of mixing lot numbers or topping off containers. Restocking the system is fast and easy. The software system comes complete with a color-coded menu option screen to view the stock status of each cartridge, eliminating the need to inspect stock. The system also has a sophisticated memory chip link between the stock container and corresponding piggyback refill cartridge. This coded chip verifies medication identification between containers, preventing stocking errors. Should there be a need to change the contents of an individual container (e.g., from furosemide to verapamil) the computerized system ensures accuracy through an automatic system update. Once the door to the stock containers is closed, the system automatically scans the memory chip of each stock container to verify its contents and automatically updates the systems memory as to the nature of the change—no need for a manually entered update. The system updates itself, reducing the possibility of human error.

The system is not only ideal for first dose and p.r.n. orders, but will prepare an entire med pass at the touch of a button, limiting waste, improving available medication cart space, and reducing staff time. Once the system has been activated to prepare a designated med pass, medications are prepared in their respective envelopes and transferred to one of seven compact carriers (MedTote), which hold up to 60 envelopes each. Medication envelopes can be sorted in each carrier by facility wing, patient name, patient room number, or other variables, allowing nursing staff to access medication in a resident-specific fashion. Envelopes for a med pass can be filled at a rate of up to 250 per hour, and p.r.n. orders are available within 30 seconds.

Tighter Medication Management

Now that the Medicare PPS has kicked into high gear, medication costs are front and center in the eyes of long-term care facility owners and administrators. This has motivated the development of a new approach to the management of medication costs. In the past we have seen a tremendous amount of medication waste in long-term care settings. Much of it stems from the fact that many existing dispensing systems place a significant amount of medication at risk for waste. Commonly encountered mechanisms of waste include discontinuation of medication, death or discharge of residents, therapeutic interchanges, staff misplacement of unit-dose packaging, product contamination, drug recalls, over-ordering of medication, destruction of nonreturnable controlled substances, and theft. Packaging each medication in a bulk unit-dose system places more medication in a vulnerable position once it leaves the pharmacy.

The best automated packaging systems can help combat the problem of waste by permitting the pharmacy to dispense individual doses directly at the time of use, eliminating the need for the facility or the patient to reimburse the pharmacy for a 28- to 30-day bulk supply. With the current system, if a number of nonreturnable doses are wasted, the facility or the resident pays the cost. In the case where medications are returnable, there is an added operational cost to the pharmacy, based on the fact that pharmacy personnel must process the return for credit. With automated packaging systems such as the one we use, there is direct control of doses utilized by both parties—which translates into substantial cost savings through reduction of medication waste. The facility pays for exactly the number of dosing units used, and returns for credit to the pharmacy are minimized. In addition, the need for house stock is significantly reduced, since p.r.n. orders can be dispensed directly from the system, freeing up house stock space and reducing costs associated with expired stock.

Freeing Up Nurses

Today’s sophisticated automated dispensing systems can help reduce nursing administration time by allowing nursing staff to administer medications directly from prepared carriers without having to fumble through the medication cart searching for the necessary unit-dose pack or punch card. This frees nursing staff to spend more time on direct patient care or administrative responsibilities. Based on data originating from initial beta testing, my pharmacy’s use of an automated dispensing system has yielded nursing-time savings of 5.17 minutes per patient per day. That translates into savings of 10.4 hours per day for a typical 120-bed nursing facility.

Automated systems not only reduce the cost of medication utilization and nursing administration time, but also the direct costs to private-pay residents. This represents a concrete marketing benefit to the long-term care facility, which is better able to control medication costs and residents’ out-of-pocket expenses—potentially making long-term care facility placement more affordable for some families and giving the pharmacy provider an edge on the competition.

Enhanced Documentation

Anyone involved in long-term care knows full well that the process of caring for a resident revolves around accurate documentation. Today’s sophisticated automated systems are designed to generate voluminous information to facilitate enhanced medication management. The Envoy system, for example, can generate medication administration records based on one-, seven-, and 31-day cycles, documenting p.r.n. and "stat" doses in the process. Transaction reports can be generated and sorted according to resident, physician, medication, caregiver, Drug Enforcement Administration (DEA) code, and date of dispensing. Medication usage reports are available to assist in drug utilization evaluations, with a variety of options for graphic display of medication use data.

Security and Technical Support

Medication security has always been a high priority for in-house automated medication systems. To deter theft and diversion, the system we use is designed to prevent break-ins, and it meets all DEA security control requirements governing storage of controlled substances. The system comes equipped with an alarm that activates with each attempt at a break-in and automatically terminates the dispensing process.

As with any automated system, technical support is just as important as functional reliability. Should a mechanical problem arise, it is essential that interruption of service be minimized. Leading automated dispensing equipment manufacturers typically offer local mechanical support services that are on call 24 hours a day to maintain their system’s functional capabilities. Service staff are typically trained to respond to malfunctions within a two- to four-hour period.

Do Your Homework

It wasn’t too long ago that the first automated dispensing systems appeared on the long-term care landscape. At first glance, some appeared to be little more than high-priced automated toys. It wasn’t until many of us actually took a closer look at these systems that we found they held the potential to help us achieve enormous operational economies and cost savings. Now we’re witnessing the development of "second-generation" automated systems that not only reduce cost to the pharmacy, but can also help boost our client’s profitability.

If you are reengineering your existing automated system, searching for a system to assist in reducing both pharmacy and client facility operational costs, or searching for a system that is adaptable to your operational needs, I highly recommend that you explore the full spectrum of automated equipment on the market or in development. Any purchasing decision should be guided by an in-depth comparison of the unique characteristics and capabilities of each candidate system. Once you’ve narrowed the field, visit practice sites where the systems you’re considering are operational so you can judge their capabilities firsthand. A bit of careful homework up front can help ensure that your investment in automation quickly pays off in solid cost savings to your pharmacy, operational efficiencies for client facilities, and, most important, enhanced patient care.