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Healthcare workers (HCWs) are continually seeking ways to enhance service and quality, and improve the
financial bottom line. An effective inventory control management system for surgical instruments in the healthcare
setting is one way to achieve this goal.

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Every hospital wants to get a handle on managing instrumentation. Surgical instrumentation has become
increasingly complex and expensive. The instruments represent a substantial financial investment for healthcare
facilities. Money is tight and HCWs do not have the luxury of buying excess inventory. This is especially true of
endoscopic instruments, which have become a costly and necessary financial investment as HCWs increasingly
utilize minimally invasive surgical procedures.

In today's healthcare setting, there are hundreds of instrument sets containing thousands of different types,
designs, and sizes of instruments that are used in surgical procedures. As the number and variety of instruments
used in surgery has increased throughout the years, so has the cost of these instruments. In addition, surgical
cases and the need for rapid turnover of sets have contributed to the need for better organization and control.
Remember, an organized inventory management program keeps trays under control and circulating. The volume
of procedures can be better handled and tracked avoiding the need to routinely flash instruments.

The volume, high cost of surgical instruments, increased turns, and limited inventories make it essential that an
effective management system for this asset be in place to provide accurate control and timely data.

       

Every hospital sees the need to manage its instrument sets. Having an established written policy and procedure
regarding instrument inventory management is one step; having the cooperation of the staff to implement these
procedures when overwhelmed by the increased volume of cases and responsibilities is another. In other words,
we need a team of dedicated staff trained to utilize the system each and every step of the way. Training and
cooperation are crucial in maintaining an inventory management system. Furthermore, the system must be
consistent and easy to implement.

Healthcare facilities typically utilize a manual record-keeping system, or an automated system, to document
information. However, all healthcare facilities are not the same. The decision as to which system to utilize,
whether manual or automated, is based on several factors, including the size of the facility, the number of
surgical instruments, procedures, staff compliance, and the financial resources of the institution. It is important to
choose an instrument management system that will best meet the healthcare facility's particular needs. Whatever
system is used, it should be efficient, cost-effective, and easy-to-use. It is crucial for the staff to completely
understand the system, be trained to use the system, and work together to achieve optimum results.

  
      

Manual instrument management systems are certainly a way to start. In the


past it was the only option and these may work for smaller healthcare facilities
and surgery centers. However, a manual inventory system takes a
considerable amount of time and effort to maintain. Keeping manual logbooks
where all processed instrument trays are listed and tracked is time consuming
and labor intensive. There is a chance for error. Additionally, retrieving
information from a manual system is difficult, as there are volumes of
paperwork to look through before data can be complied and analyzed.

When there are many instruments, it is even more difficult to maintain accurate
control with the manual system. It is also a challenge to consolidate information from the records to generate
needed and valuable reports that are useful to enhance the operation of the department.

Organization and standardization of trays, color-coding, labeling, and instrument count sheets are a few solutions
that can help manage the process. There are products currently on the market such as sterilization containers
that provide organization and secure containment of surgical instruments. These container systems provide a
location for the identification of set name or service, load card information for the sterilization record, and options
to customize and standardize sets.

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Computer technology has provided opportunities for improving instrument management. Computerized inventory
management systems have the capability to manage and process large volumes of data quickly and provide
reports that help the healthcare facility do a better job of managing its surgical instrument inventory. It is
important to be aware of which systems are currently available in the marketplace and what they offer. Most
computer management systems track the instrument set through all processes and services. Others have
additional options, such as instructional features on line, instrument preventive maintenance reminders, and
employee tracking for productivity.

Take time to review literature and assess different systems and costs. Although an automated system may
require a substantial initial investment, it has proven to be a cost effective instrument management program.
According to Valerie DeVries, RN, sterile processing manager at Lenox Hill Hospital in New York City, "It may
cost thousands of dollars, but it's worth it. Now we can find the trays. At Lenox Hill, w e have an outrageous
volume of instruments and now we have a better handle on standardization and control over the instrument
inventory." However, the system requires maintenance, backup, and someone to sit and input consistently.

When it comes to inputting data, bar coding is a valuable tool. Inputting data using a bar code system is a definite
time saver over manual input as long as the information is recorded at time of use. Bar coded trays and a bar
code scanner provide improved tracking of instrument sets. Using a tray system that provides a location for
labeling as well as the ability to bar code is a clear advantage.

Scanning ensures accuracy of data entry. Instrument sets are scanned at specific workstations in order to know
the location and status of any set at any time. Surgical instrument sets can be identified with a bar code label that
identifies each set.

Labels can be affixed to inner baskets and outside of containers and to the outside of trays that are wrapped.
Computers track the flow of sets through the department and at each stage of the processing department.


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First, instrument sets are scanned when they enter the decontamination area.
Scanning creates a record that the tray is there. The tray is scanned when the set
arrives in the prep and pack area for assembly, when sterilized, and when delivered
to the operating room or storage area.

A count sheet for each set is printed when the set is scanned for assembly and bar
code labels are printed to affix to the outside of the container or package before the
sterilization process. Additionally, a backup plan is necessary as with all
computerized systems. Implementation takes time and requires a concerted effort.
When all processes and documentation rely on an automated system to function, if
the system goes down, tracking documentation cannot be obtained. Therefore,
service is an important feature of the system.
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The system must be as user friendly as possible. At Sarasota Memorial Hospital, an ‘
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845-bed regional medical center, an automated inventory management system was  ‘ ‘‘

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approved by the staff in central processing and the OR, and put into use. According
to Jim Heller, director of central services, "Sarasota Memorial's first goal was to have sets complete with the
correct instrumentation. The facility created count sheets and imported photos for each instrument in the
computer." Later they implemented an instrument maintenance program, a tracking system and standardized to a
sealed container system to store and contain the instrument sets using bar code labeling.

In conclusion, choose an instrument management system that will work for you. Obtain consensus from everyone
involved and do a step wise implementation program. Make it easy. Do a back-up and use trays that can be
standardized and labeled. In the end, whether the inventory management system is manual or automated, what it
comes down to are the people, their dedication, and commitment.

     


   
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The singular focus of Caduceus Systems is to deliver significant improvements in the ability
of hospital facilities, networks, and other healthcare organizations to optimize the processes
and work flows associated with hospitals materials management information systems and
reduce the costs related to inventory and supply chain management (SCM).

Strategically, we position healthcare providers to exploit contemporary technologies and


connectivity with suppliers and trading partners to:

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Œur built-for-hospitals-from-the-ground-up approach includes a tailored, tactical hospital


inventory management solution for operational requirements - a significant area for cost
savings.

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-nparalleled in its design and scope, the Caduceus Materials Management Information
System (MMIS) is an advanced "end-to-end" hospital supply chain software solution utilizing
scanning and a wireless infrastructure to manage materials, costs, and charges from
requisitioning to the point of care.

Caduceus Systems delivers an effective way for forward-thinking hospitals and other
healthcare facilities to integrate the best-of-breed hospital supply chain management solutions
that have proven so effective in reducing costs throughout American industry without
requiring wholesale change in existing systems.

This challenge was first articulated in a major analysis of inefficiencies in the healthcare
industry, the Efficient Healthcare Consumer Response Report (EHCR, 1996). The report
identified $11.6 billion of cost saving opportunities in the American healthcare system
directly due to inefficient product movement and ineffective inventory control and materials
management. Nearly ten years later, this situation has only grown worse. As materials cost
has increased, this is inefficiency our overburdened health system cannot afford.

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Each year, the average health system invests millions of dollars in pharmaceuticals. While
hospital pharmacists are expert at evaluating the efficacy of drugs, many haven't looked
closely enough at their inventory management processes. In fact, the typical health system
pharmacy does not use calculated methods for determining product orders. As a result,
hospital pharmacies average a relatively low 10.2 inventory turns per year, lose contract
compliance opportunities, and continue costly process inefficiencies.

A disciplined inventory management program applies "buying science" to pharmacy


procurement and can make a huge difference in inventory investment, labor conservation and
patient safety.
While many hospitals today use robotics to fill prescriptions and sophisticated systems to
track and monitor patient care, most still use manual processes to determine what, how often
and how much to order. The vast majority of hospital pharmacies still rely on a "want book,"
using pen and paper to take notes throughout the day on items to be ordered. They double the
work by visually inspecting the on-hand inventory of items in the pharmacy, and cap off this
process by manually entering their daily order into technology systems provided from their
pharmaceutical distributor.

Many pharmacy buyers were trained as pharmacy technicians and in lieu of formal
purchasing instruction, rely on their own intuition. A typical hospital pharmacy has more than
2,000 products in its inventory. Relying on visual inspection, memory or experience to decide
how much to order leads to costly overstock and stressful buying emergencies. Compounding
this problem is the fact that most hospital pharmacies do not have a process for accurately
reconciling what is received against what their pharmaceutical distributor bills.

The serious consequences of traditional pharmacy purchasing include:

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Taking control of inventory is much easier than it was a few years ago. The right inventory
process redesign includes three components: technology; buyer experience; and change
management.

At the core of the program is a discipline that relies on velocity rankings, a term used to
illustrate the speed at which a product moves off the shelf. Wholesale channels use inventory
classifications of A, B,C, and D items as product velocity metrics. An "A" item can typically
represent 10% of the stocked SK-s (stock keeping units) but 60% of sales, while a "D" item
can represent 25% of stocked SK-s and only 10% of sales. Each velocity group has its own
inventory turn goals. These rankings help focus more of a pharmacy buyer's time on "A"
items and less time on slower moving "B" and "C" items.

Ideally, the order process incorporates computer calculated reorder points and reorder
quantities for each item, built in to the ordering process, eliminating the need for the want
book. The pharmacy can rely on suggested, automatically generated order quantities, contract
compliance checks, and other time and cost saving decision-support features. A process like
this ensures adequate on-hand inventory while preventing costly overstock.

Thorough manual reconciliation of daily distributor deliveries is burdensome and impractical


for most hospitals. With the millions of dollars worth of inventory on their pharmacy shelves,
however, hospitals need reassurance that what they receive and what they paid for are the
same. Hospitals should take advantage of their distributors' receiving technologies that
automate the check-in process and instantly compare what is delivered to what is invoiced.

Hospital pharmacies will realize significant measurable benefits from redesigning their
inventory management processes, such as:
   
  -The higher the number of inventory turns, the less capital is
invested at any given time. Hospital pharmacies should strive for an inventory turn rate of at
least 14 turns, and ideally over 16.


     Contract items represent a significant area for pharmacy
savings for pharmacy-the more compliant with buying group contracts, the higher the
savings. Without a disciplined inventory management process, a pharmacy runs the risk of
stock-outs that lead to non-contract purchases. Œutmoded pharmacy buying methods
contributed to an average 40% of hospital pharmacy drug spend invested in non-contract
items.

Southwest Washington Medical Center (SWMC), a 442-bed hospital outside of Vancouver,


Wash., adopted McKesson's Asset Management program last year, and its pharmacy
department experienced savings of 2.5 hours a day in purchasing staff time. In one year, the
department increased its inventory turns and realized a cost savings of $170,000. Pharmacy
staff say the program has allowed them to identify areas in need of improvement, and to find
other opportunities for savings.

Hospital pharmacies can expect new challenges over the next decade, including adopting
electronic medication administration record technology, implementing automated prescriber
order entry, and coping with continuing clinical labor shortage. Modernized inventory
management can help them address these challenges, by optimizing the purchasing and
inventory management processes to free up pharmacist time, reduce costs, and increase
capital availability for future needs. The result is a more efficient system that can produce
significant savings for the hospital while providing pharmacy with more time to focus on
patient care activities.

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