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Hospital Bar-Coding Systems

By Brent A. Metfessel; MD, MIS

www.HealthcareFinancials.com

Given anticipated benefits in patient safety, the FDA required in April 2006, that bar codes be installed on all medications used in hospitals and dispensed based on a physician’s order.  The bar code must contain at least the National Drug Code (NDC) number, which specifically identifies the drug. 

Unfortunately, by 2008 only about 18% of hospitals used bedside bar coding systems. Nevertheless, this ruling heightened the priority of implementing hospital-wide systems for patient/drug matching using bar codes and implementation that is still growing rapidly today.

Procedures

Conceptually, the procedure for bar coding is as follows:

• The drug is given to the nurse or other provider for administration to the patient.
• Once in the patient’s room, the provider scans the bar code on the patient’s identification badge, which positively identifies the patient.
• The medication container is then passed through the scanner, which then identifies the drug.
• The computer matches the patient to the drug order.  If there is not a match, including drug, dosage, and time of administration, an alert is displayed in real-time, enabling correction of the error prior to drug administration.

Enter the FDA

The FDA estimates that over 500,000 fewer adverse events will occur over the next 20 years, a result of an expected 50% decrease in drug dispensing and administration errors. The decrease in pain, suffering, and lengths of stay from drug errors is estimated to result in $93 billion in savings over the next 20 years. 

Avoidance of litigation, decreased malpractice premiums, reduction in inventory carrying costs, and increase in revenue from more accurate billing result from the improvement in quality and efficiency of care.

This makes implementation of bar coding technology relatively low-risk, although there needs to be sufficient informatics capability to capture and store drug orders.

Estimated Cost Savings

For a bar coding system, a 300-bed hospital may expect up-front costs of $700,000 to $1.5 million with about $150,000 in maintenance fees annually.  The returns, however, in terms of improved patient safety and cost of care make an investment in bar coding technology one of the more cost-effective information systems investments.

Assessment

Also, given the increasing consumerism in healthcare, prospective patients will be more assured of care quality from a hospital investing in state-of-the-art technology in this area, giving the medical center a competitive advantage.

Conclusion

Thus, hospitals are becoming more like retail businesses every day … finally!

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Filed under: "Doctors Only", Health Economics, Information Technology, Quality Initiatives, Risk Management | Tagged: Brent A. Metfessel, FDA, hospital bar codes, medical bar codes, National Drug Code Number, NDC, www.certifiedmedicalplanner.com, www.healthcarefinancials.com | 2 Comments »