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The American Journal of Managed Care February 2013
Are Benefits From Diabetes Self-Management Education Sustained?
JoAnn Sperl-Hillen, MD; Sarah Beaton, PhD; Omar Fernandes, MPH; Ann Von Worley, RN, BSHS, CCRP; Gabriela Vazquez-Benitez, PhD, MSc; Ann Hanson, BS; Jodi Lavin-Tompkins, RN, CNP, CDE, BC-ADM; William Parsons, MS; Kenneth Adams, PhD; and C. Victor Spain, DVM, PhD
Impact of Oral Nutritional Supplementation on Hospital Outcomes
Tomas J. Philipson, PhD; Julia Thornton Snider, PhD; Darius N. Lakdawalla, PhD; Benoit Stryckman, MA; and Dana P. Goldman, PhD
Comparative Effectiveness Research and Formulary Placement: The Case of Diabetes
Michael E. Chernew, PhD; Rick McKellar, BS; Wade Aubry, MD; Roy Beck, MD, PhD; Joshua Benner, PharmD, ScD; Jan E. Berger, MD, MJ; A. Mark Fendrick, MD; Felicia Forma, BSc; Dana Goldman, PhD; Anne Peters, MD; Rebecca Killion, MA; Darius Lakdawalla, PhD; Douglas K. Owens, MD; and Joe Stahl, MA
Oral Nutritional Supplementation
Gordon L. Jensen, MD, PhD
Medical Homes Require More Than an EMR and Aligned Incentives
Samantha L. Solimeo, PhD, MPH; Michael Hein, MD, MS; Monica Paez, BA; Sarah Ono, PhD; Michelle Lampman, MA; and Greg L. Stewart, PhD
Do Electronic Medical Records Improve Diabetes Quality in Physician Practices?
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Short-Term Costs Associated With Primary Prophylactic G-CSF Use During Chemotherapy
Suja S. Rajan, MHA, MS, PhD; William R. Carpenter, MHA, PhD; Sally C. Stearns, PhD; and Gary H. Lyman, MD, MPH
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The Cost of Implementing Inpatient Bar Code Medication Administration
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The Cost of Implementing Inpatient Bar Code Medication Administration

Julie Ann Sakowski, PhD; and Alana Ketchel, MPP, MPH
Bar code medication administration can be an effective and potentially cost-saving solution to prevent harmful medication administration errors in the community hospital setting.
A second study focused on the severity of these prevented errors.30 That study used a review panel of pharmacists, registered nurses, and a physician to rate various medication error scenarios for severity of outcome and probability of adverse event. The scenarios were created by developing de-identified descriptions of the verified error or potential error events from BCMA reports from the same 6 study sites used in the previously mentioned study. Similar to other studies employing this technique, the panel used a 10-point scale to score the potential severity of each error. This 10-point scale was then collapsed into 3 categories: minimal effects (a score of 0 to 2); moderate (likely to produce lasting effects and may interfere with treatment; 3 to 6); and severe (likely to cause life-threatening or lasting effects; 7 to 10). Reviewers used the National Coordinating Council Medication Error Reporting and Prevention (MERP) medication error rating index categories as a reference point when assigning their scores. “Moderate” errors scores in our study were analogous to MERP Index categories D, E, and F and a “severe” score was similar to a MERP index score of G, H, or I.31

The panel rated 8% of the events prevented using BCMA as having the potential to produce moderate adverse effects and 1% of the events potentially leading to severe consequences. Data on the additional healthcare costs associated with hospital ADEs were gathered from the existing literature, as were estimates of the cost-effectiveness of other medication safety HIT.

Data Collection. Primary direct capital cost information was collected from financial records from the individual hospital sites and the network-level financial accounting department. This provided data on all initial capital purchases. Information on subsequent capital purchases and hardware upgrades was compiled from existing invoices, financial records, and key informant interviews.

Information on personnel time dedicated to planning, implementation, and ongoing maintenance was collected during structured interviews with key project team members. The BCMA implementation teams varied by site, but generally included a nursing lead, pharmacy lead, and IT managers at each site along with corporate-level nursing and pharmacy leads and an IT project manager that facilitated all of the BCMA implementations across the system. We corroborated selfreported time estimates with supporting project management documents such as meeting minutes, training attendance logs, and hospital budgets whenever possible. Wage and benefit information to quantify personnel costs were collected from human resource records at each site and from key informant interviews. During the structured interviews we queried key informants about any cost savings derived from the system in terms of both material purchases and staffing time. Informants consistently judged these savings to be negligible. We examined the impact of using the system on work flows and included additional costs associated with these refined work flows.

Analysis. We totaled the direct capital purchases and personnel costs incurred from the initial planning and design stages of the system implementation at each facility through December 31, 2008. We calculated 2 measures of cost: total cost per facility (data not presented) and cost per BCMA-enabled bed. The total cost measures were used to calculate total cost per harmful error prevented. The cost-per-bed estimates provide insight into the degree of variation across facilities and provide a bounded range for the average.

We observed that most of the components of BCMA were priced according to size of the facility or the number of beds to be enabled with BCMA, such as software licenses, terminals, and drug repackaging materials. Components priced independent of facility size made up a much smaller portion of the total cost of BCMA, such as salaries of management personnel and select infrastructure improvements. We therefore used the cost-per-bed estimate as a reasonably generalizable indicator of the cost of implementing and operating BCMA at various facilities. One limitation of this metric is that our estimate may not accurately predict the cost of implementing and operating BCMA for facilities that are much smaller or much larger than our 4 study sites, as volume pricing may vary less or more at those extremes.

We employed standard financial management practices for capital budgeting and estimation of costs and benefits that occur over time.28,32 Costs were converted to constant 2008 dollars using the US Bureau of Labor Statistics Hospital Producer Price Index. To facilitate comparison with our results, we also converted the previously published estimates of the cost of care associated with ADEs and cost-effectiveness of other medication error prevention technologies to 2008 dollars using the same index. We applied a 3% discount rate to both costs and the number of prevented errors to adjust for time preferences in the cost-per-ADE-averted calculations. We rounded our estimates of the cost per bed and cost per error prevented to the nearest $100.

Our estimate of the number of moderate or severe errors prevented at the study sites was calculated by applying the error prevention rates estimated in our earlier studies to the number of doses administered using BCMA from system logs automatically generated at each site (Table 3). We examined the sensitivity of our cost-per-harmful-error-averted calculations to these assumptions about the effectiveness of BCMA at preventing errors by calculating costs using the upper and lower error-prevented rates we observed in our earlier work: 0.4% and 1.9% (Table 4).



Implementing and operating a commercial BCMA system, medication dose repackaging, and electronic pharmacy management system in a community hospital setting for 5 years costs $40,000 (range: $35,600 to $54,600) per BCMA-enabled bed. Costs incurred by individual study sites were dependent on their existing infrastructure and varied in terms of how much equipment was replaced during the study period and in terms of what pharmacy systems were purchased to support BCMA. If implementation of a new electronic pharmacy management system is not needed and minimal hardware replacement is performed, costs could drop as low as $20,000 per BCMA-enabled bed.

Initial capital outlays and personnel time for planning and implementation of an inpatient BCMA solution account for approximately 35% of the total costs. Ongoing operations, including technology upgrades, maintenance, training, and monitoring made up the remainder of total costs over the 5-year period.

Our estimates assume that the existing hospital infrastructure at our study sites requires that pharmacy management and repackaging systems be implemented to support the medication administration system. all of our study sites reported adding pharmacy personnel to support the work flow changes from the upgraded pharmacy management systems and the medication repackaging needs to support the addition of bar codes. excluding any costs associated with expansion of the hours of pharmacy coverage (after-hours pharmacy services), these pharmacy costs account for 36% of the total cost of implementing and operating bCMa, with the majority allocated to the pharmacy management system (see Figure).

Overall, approximately 14% of the costs associated with the bCMa system were for personnel participating in the planning and design, training, ongoing monitoring, and technology support. Our key informants reported that the nursing staff levels did not change as a result of incorporating bCMa into the work fl ow. This was supported by evidence from a recent time and motion study that found bCMa did not increase the time spent on nursing medication administration duties.33

Cost per ADE Averted. The cost of implementing and operating a hospital inpatient bCMa system over 5 years is $2000 (range: $1800 to $2600) per moderate or severe event averted when both costs and errors are discounted at 3% per year. as shown in Table 5, our sensitivity analysis showed that assumptions about the effectiveness of bCMa and the number of harmful errors averted by using the system can have a signifi cant impact on cost per aDe-averted estimation.


We estimated that the cost of replacing a manual medication administration process with a bCMa system for 5 years, including routine hardware replacement and system upgrades, is $40,000 per bCMa-enabled bed. a 100-bed facility could anticipate that implementing and operating a commercially available bCMa system, including electronic pharmacy management and drug repackaging, would cost between $3.6 and $5.5 million over 5 years. If implementing a new electronic pharmacy management system is not required, the 5-year cost for operating a bCMa solution with the associated drug repackaging would be about $30,000 per bCMa- enabled bed, or $3 million at a 100-bed facility.

Our estimate that bCMa implementation and 5-year operating costs are $2000 per harmful medication error averted is less than the $3100 to $7400 estimated cost of care associated with such errors. even the conservative cost-per-aDeaverted estimate from our sensitivity analysis that assumes bCMa only averts medication errors in 0.4% of administration attempts—$5600—is within this band of additional costs of care.

It is estimated that only 50% of hospitals in the united States use bCMa, partially due to a belief that the technology is prohibitively expensive and labor intensive.34-36 The findings from this study provide information that can help guide decision makers in developing a business case for adopting and operating bCMa in the inpatient community hospital setting.

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