CEO SUMMARY: This San Francisco hospital laboratory hit a home run with its clever use of automated materials management units, originally used in pharmacies. Reagents, phlebotomy supplies, and other laboratory consumables are stored in an access-controlled environment. Benefits have been significant reduction in reagent and other lab supply costs, fewer stock-outs, and reduced loss from unused lab supplies with expired dates.
MANAGING THE STORAGE and timely use of expensive reagents is an ongoing problem at many laboratories across the country. But the laboratory at California Pacific Medical Center (CPMC) in San Francisco has a unique answer to this longstanding problem.
“We now use Pyxis® automated materials management units [sold by Cardinal Health] to manage our reagents,” revealed Jennifer Schiffgens, Director of Laboratory and Pathology Services at CPMC. “It’s a solution that’s made our staff happier and is generating significant cost savings within the lab.”
The story of how Schiffgens cleverly recognized that an automated pharmacy storage system could also be used to store and control reagents is a great example of innovative laboratory management. “It started when I participated in a hospital-wide project using Pyxis to control office supplies. I was surprised at some unexpected benefits of the program,” observed Schiffgens.
“Besides direct savings in better utilization of office supplies, use of the automated Pyxis system created a sense of accountability. I noticed that the staff automatically became much more aware of supply usage, waste and inventory control in general—things that weren’t necessarily on their mental radar before.
“When I saw how effective the Pyxis was in improving management and usage of office supplies,” continued Schiffgens, “I realized this could be a highly effective solution for reagent storage and management.
Managing Reagent Supply
“Like most labs, we faced the usual problem of maintaining optimum inventories. We also had a problem with disappearing reagents for rotorvirus, rapid microbiology testing, hCG qualitative kits, and vacutainer tubes. We had been searching for an effective mechanism to monitor usage,” she observed. “Manual management of the supply chain tends to be inefficient. It’s time-consuming and just too difficult to keep up with where things are.”
What makes this story of even greater interest for other lab administrators and pathologists is how the hospital’s purchasing department funded, from its budget, the purchase of the Pyxis systems used to store and manage reagents in Schiffgens’ lab. This is especially notable, since it may be the first known use within the United States of an automated pharmacy system to store and manage laboratory reagents and supplies.
“My vice president knew I was very cost-conscious. And the timing was right,” recalled Schiffgens. “A JCAHO (Joint Commission on Accreditation of Healthcare Organizations) inspection was soon to occur and the laboratory had some important issues it needed to resolve before the inspection.
Schiffgens sold her idea to use Pyxis systems by demonstrating that, not only would the automated storage program control supplies, it would also slash inventory costs by a significant amount.
“In particular, at this time we were having a consistent problem with expired tubes,” Schiffgens explained. “We had outrageous costs associated with phlebotomy tubes that were expired or missing. We were motivated to find a solution. We had to make supplies accessible, but at the same time we needed a reliable way to account for them, even when managers were not there to directly supervise pulling inventory from stock.”
Schiffgens sold her idea to use Pyxis systems by demonstrating that, not only would the automated storage program control supplies, it would also slash inventory costs by a significant amount. “More surprising was the discovery that use of Pyxis systems in the laboratory would cut purchasing department costs,” commented Schiffgens. “In fact, we were able to identify enough cost savings within the purchasing department alone that purchasing volunteered to provide, from its budget, the capital required to acquire the Pyxis systems.
“It’s an innovation which has been win-win for all stakeholders in the hospital and the laboratory,” noted Schiffgens. “As we roll out, we’re connected to the purchasing department through our Lawson system. Orders for resupply of laboratory products are now automatic.”
The laboratory at CPMC is implementing the reagent/lab supply storage solution in phases. “In phase one, all our phlebotomy supplies, needles, etc. are now stored in Pyxis systems,” she explained. “We will roll out phase two for dry reagents by the end of June. Phase three will entail monitoring systems for our refrigerated reagents.
Total of Eight Pyxis Units
“Currently we have three Pyxis units up and running, one each in hematology, microbiology, and chemistry,” added Schiffgens. “Eventually, our laboratory will have a total of eight systems distributed across our three hospital campuses, Pacific, California and Davies.
“When we get to the phase three refrigerated units, we’ll buy the Pyxis SupplyCenter™ monitoring system, rather than the refrigeration unit itself,” she added. “The monitoring system has sensors that go on our existing refrigeration units and are accessed by using a security code.”
Because of heightened concerns within healthcare about security and the need to control access to certain products, CPMC’s use of supply management automation adds extra protection, without impeding normal work processes. “All our lab staff have access,” stated Schiffgens, “but they have to enter their security code to get into the Pyxis. We know who accessed the unit and when.”
According to Schiffgens, it is up to the individual accessing Pyxis to key in the specific quantity of inventory that was removed. “Technically, some- one could try to fake out the system by not entering the correct amount of supplies taken,” Shiffgens added. “But this is unlikely, because we can easily audit who accessed the system.”
As most lab managers and pathologists know, med techs don’t always embrace changes in long-established work processes. Therefore, the fact that the new Pyxis system met with no
resistance from the staff at CPMC was an unexpected and welcome outcome. “Everyone loved the system because it is open and easy to see the contents inside,” Shiffgens noted. “Now they can look in and quickly see if we’re running low on something.
“Our units are stocked by a clerk from the purchasing department,” added Schiffigens. “This assures ‘first in–first out’ for our inventory of supplies and reagents. That is one reason why we have significantly reduced the laboratory supplies which must be discarded because their expiration dates have passed. Savings from this improvement are worthwhile.
“As to shortages, we’ve seen some stock-outs for certain items, but it is no longer a big problem for us. We have the Sutter West Bay supply distribution center as a backup” she declared. “We can get supplies within four hours. We keep about a week’s supply of inventory on hand.”
In addition to the benefits and improvements to work processes in the laboratory, the implementation of the Pyxsis automation materials management systems has produced impressive financial benefits, both in the laboratory and in the hospital purchasing department. “We saw a tremendous reduction in our laboratory’s supply costs—around 8% in a year,” Shiffgens observed.
“The equipment paid for itself within the first six months, just from the savings realized by not having tubes walk off the shelf.”
“The units we use, the Pyxis SupplyStation, run about $15,000 each and are sold by Cardinal Health. The savings in purchasing costs alone justified that department’s picking up the tab for the capital outlay for the equipment—so it didn’t even come out of the lab’s budget,” she continued. “The equipment paid for itself within the first six months, just from the savings realized by not having tubes walk off the shelf.
“There is no question that this Pyxis program exceeded our expectations,” Schiffgens stated. “We gained efficiencies and cost savings. In eliminated the expired tube problem, we corrected a potential JCAHO issue-no more compliance and regulatory issues, and no hoarding! This JCAHO outcome was an unforeseen benefit, since it got expired tubes off the floor.”
Having harvested the benefits from phase one, Schiffgens is eager to implement the next two phases. “Like all laboratories, we need to take every advantage of any opportunity to improve our operational efficiencies and reduce our supply expenditures,” she said. “As we go forward with this project, we are seeing a number of unexpected benefits, which shows that an improvement in one area can unlock unanticipated gains in other areas of laboratory operations.
“I can offer an unqualified recommendation that any hospital or reference laboratory will find it worthwhile to automate their inventory management in a similar fashion,” advised Schiffgens. “As to advice for anyone looking to implement an inventory automation system, I would recommend having accurate par volumes so they can better estimate ordering intervals. That way you never have to worry about running out of reagents.”
THE DARK REPORT considers this innovation at the CPMC laboratory to be a great example of why laboratory managers and pathologists should think “out-of-the-box.” Across business and commerce, management solutions abound which can be adapted and imported into clinical laboratory operations.
Purchasing Provides Capital
In the case of CPMC’s laboratory, it spotted an opportunity to take automated supply management systems, first developed in pharmacy settings, and apply it to the control of inventories in the laboratory. This allowed CPMC’s lab to resolve a gnawing compliance problem and to save significant dollars while maintaining buy-in from lab personnel. Further, it even triggered savings in the hospital purchasing department, which offered to provide the capital to realize these benefits from its own budget.