Why is Hospital Pharmacy Inventory Management Important?
Maintaining an efficient hospital pharmacy inventory management system is important because it allows the hospital, first and foremost, to deliver optimal patient care and safety. This is the driving force in creating and implementing any system.
An effective hospital pharmacy inventory management system helps manage costs and addresses the financial needs of your hospital. It identifies opportunities to minimize carrying costs, enhance bid compliance, minimize stock outs, reduce shrinkage, and decrease obsolete inventory. All of this comes together to ensure that your hospital maintains compliance and adheres to regulatory requirements in order to continue providing excellent patient care.
Table of Contents
- Common Challenges Hospitals Face with Inventory Management
- Technology Solutions for Hospital Pharmacy Inventory Management
- Hospital Pharmacy Inventory Management Best Practices
- Key Benefits of Exceptional Inventory Management in Hospital Pharmacy
Common Challenges Hospitals Face with Inventory Management
Drug Shortages
When there is a drug shortage, it can be a struggle to ensure that you have enough medication for your patients while also considering your hospital’s capital.
Expensive Drug Costs
It can be difficult to maintain adequate supplies of expensive drugs while minimizing an overstock.
Specialty Drugs
Specialty drugs often create an additional workload with extra paperwork and payments as well as time spent managing deliveries.
Ambulatory Clinics and Services
When your hospital includes multiple locations, rigorous inventory management is required to meet the demands of your inpatient, outpatient, and clinic needs.
Value-based Reimbursement
With new value-based payment models, it is crucial for hospital pharmacies to stock the most effective drugs at the lowest possible cost.
De-centralized Pharmacies
The positive side of decentralized pharmacies is that they free up doctors’ and nurses’ time and make distributing medication more efficient, but there are also risks involved. Tracking inventory is difficult, there is an increased risk for drug diversion, and there are often increased costs.
Technology Solutions for Hospital Pharmacy Inventory Management
With all of these challenges, how do hospital pharmacies mitigate the risks and manage their inventory effectively? One of the most common solutions in inventory control is automating your decentralized pharmacies with innovative technology. This includes tech-enabled automatic dispensing cabinets and/or unit-dose dispensing cabinets on each patient floor as well as point-of-use dispensing cabinets and pass-through cabinets inside patient rooms.
Practical Benefits
These cabinets help create a more efficient workflow for nurses and physicians. Time is saved because the medication is securely stored near the patient, and the medication is specific to that patient as opposed to being stored in bulk. The end result is better overall quality of care for the patient.
Safety and Compliance
When technology is integrated with these cabinets, you get an added layer of benefits that enable you to maintain compliance and follow regulatory requirements. It gives you control over who can access the medications as well as the ability to track your inventory automatically. There is direct communication with your hospital pharmacy’s information system and the patient’s electronic health records. It also creates an audit trail of who accessed the cabinet, when, and what specific medication was taken.
Valuable Data Gathering
Technology enabled automated systems allow you to collect important data about your hospital pharmacy inventory. You can gain crucial insight about purchasing, utilization, waste, drug demands, historic prescribing patterns, and periodic automatic replenishment levels (PAR). Instead of ordering the same drugs and amount of inventory as you have in the past, you can use this data to minimize cost while providing better care.
Understanding and Using the Technology
All of this data doesn’t mean anything unless you can utilize it to improve your hospital pharmacy’s inventory management. When you understand the data – as well as how it is being collected – you are better able to use the technology to your advantage.
First, make sure that the technology is actually generating the information you need so that your hospital can make the best decisions possible. Once you’ve chosen the technology and automated systems that work best for you, you can more easily monitor your inventory and adjust your ordering accordingly. You can also create monthly reports to examine specific metrics and then analyze the monthly trends.
Hospital Pharmacy Inventory Management Best Practices
From logistics to personnel to overall work culture, there are several best practices that can be followed to ensure your hospital pharmacy inventory management system is successful.
Hospital pharmacy inventory management strategies include the following:
- Have a Plan
- Perform Receipt Procedures
- Ensure Proper and Secure Drug Storage
- Implement Tracking Systems
- Create a Successful Hospital Culture
Have a Plan
Create and follow a strategic and formalized plan for your hospital pharmacy’s inventory from the first stages of procurement to tracking and all the way through to administration or disposal. Document quantifiable measures of performance that can be tracked to evaluate the effectiveness of the inventory management process. Establish performance goals for total inventory value, inventory turns, inventory value/occupied bed, and (Non- 340B) G.P.O. purchase compliance of contracted items.
It’s important to plan for all variables, including drug shortages, adding new drugs, delays in manufacturing, unexpected spikes in demand, etc. Your plan should be reviewed on a regular basis and updated when necessary.
Perform Receipt Procedures
Implement clear procedures for receiving orders to ensure there are no discrepancies. Make sure the quantity of each medication received matches the quantity listed on the invoice. (Attaching the wholesaler’s stickers to each item is a good matching method.) Immediately contact the wholesaler if any items are missing from the order
Received controlled substance orders must be checked in by a separate individual. That receiving individual reviews the DEA 222 form to validate drug and quantities received by indicating the received quantity on the sheet and initializing it.
Ensure Proper and Secure Drug Storage
Delivered items must be stored in their proper areas as soon as possible after checking against the invoice. All medication bins must have proper labels with identifying names and wholesaler or manufacturer item number for easy ordering. Storage areas for high-cost or high-use medications need to be labeled with min/max PAR levels.
Implement Tracking Systems
Putting effective tracking systems in place helps to ensure access for responsible and qualified personnel, which keeps your hospital pharmacy in compliance as well as fosters effective inventory management and helps manage costs.
Implement processes to track and quantify potential lost savings from non-contract purchasing. By utilizing systems to track dollars purchased through the primary wholesaler vs. secondary wholesaler vs. direct purchases, you are able to identify opportunities to drive maximum purchase dollars through the primary wholesaler.
Create a Successful Hospital Culture
Hire the right combination of pharmacy staff who are comfortable with technology and know how to use it to provide the best patient care possible. Ensure that they can utilize the data at hand to make informed decisions. This allows them to assess a situation in the moment and adapt when necessary.
Communication and collaboration are key. When the entire team is working together and feels supported, everyone shares the responsibility of implementing your hospital pharmacy inventory management system together.
Key Benefits of Exceptional Inventory Management in Hospital Pharmacy
When a successful system is put in place to manage your hospital pharmacy’s inventory, your shelves are stocked with the medications your patients need. The technology you use offers insightful reporting and data that help you better understand the trends, allowing you to know how and when to place orders for what you need. Workflow efficiency is improved for nurses, physicians, and staff. Regulatory requirements and compliance mandates are easily followed. Bottom line? Your patients get the best possible care and attention, while your pharmacy operations are efficient and cost-effective, allowing your hospital to thrive.
Reach out to CompleteRx for a complimentary assessment to evaluate your hospital pharmacy inventory management or hospital pharmacy management.
