Eliminating sticker shock: automating charge capture and supply chain management delivers a host of gains to a large Tennessee-based IDN

Eliminating sticker shock: automating charge capture and supply chain management delivers a host of gains to a large Tennessee-based IDNThe bane of nearly every hospital without automation technology is the ubiquitous piggyback sticker: the tiny price label pulled from a product as it is used and stuck on charge sheets. The problem with this manual approach is that the stickers often don't make it to the charge sheets. Just as likely, they end up on someone's uniform or scrubs.

While the vision of staff heading out the door with piggyback stickers forming polka dots on their scrubs seems almost comical, the financial loss for a multihospital medical system can be significant.

In 2003, the growing problem of errant stickers and staff resources needed to maintain a manual and paper-based charge-capture system became a real concern for David Gilfillan, vice president of materials management for IASIS Healthcare in Franklin, Tenn. Gilfillan was given responsibility to find a better system for IASIS, which owns and operates 15 general, acute care hospitals, one behavioral hospital and three ambulatory surgery centers in Arizona, Florida, Nevada, Texas and Utah.

Piggyback Sticker Shock

Using piggyback pressure-sensitive stickers throughout the system as the primary charge-capture method at IASIS facilities resulted in lost charges and required massive amounts of labor--administrative and medical--to maintain basic par levels. Often, because of inaccurate capture of charges and recording of products onto paper charge sheets, medical units ran out of products and had to call materials management for emergency warehouse runs for supplies. Finding needed products on a different floor, in an entirely separate medical unit, wasn't practical.

Brian Pollick, materials manager for Salt Lake Regional Medical Center, an IASIS facility, said his team spent so much time checking par levels, inventorying supplies and filling last-minute orders, that there was little time to manage essential duties such as keeping the warehouse fully stocked and organized. Other IASIS materials managers were having similar experiences.

Turning to Technology

"We needed to automate the charging process as well as the supply chain point-of-use process," says Pollick. The ideal solution was one that allowed the charge capture and supply replenishment to run from software located on a single server at IASIS' central computing center in Phoenix.

Typically, finding the ideal solution involves requests for proposals, technology reviews and complex internal review processes--but not for IASIS. Instead, corporate decision-makers gave Gilfillan the responsibility to quickly find answers and resolve the situation, since he had extensive experience with materials management automation in a previous job. He had already been through the usual exhaustive reviews and knew what was available.

Gilfillan chose Omnicell's OptiFlex software. The touch software system allows the nurse to issue items to patients by selecting the patient on the touchscreen monitor and then scanning the item or shelf label with a cordless bar code scanner. In this two-step process, the nurse has performed a charge for the patient (if a chargeable item) and decreased the on-hand inventory value of the item in real time.

After the transaction, materials management personnel can look at the inventory value and see exactly what is on the shelf on each nursing floor at the facilities where the software was installed. Currently, OptiFlex is installed in eight IASIS hospitals and a ninth installation is under way with 60 charge stations (including management client stations).

Teaming for Installation

IASIS and Omnicell created a joint team to perform the installation in multiple phases. The information technology team began by setting up enterprise interfaces in four separate markets: Texas, Florida, Utah and Nevada. There were four hospitals in each market, but only one in each market was brought online during the first of three phases. The phase-in involved installing and testing the server and interfaces at IASIS' computing center in Phoenix that facilitates the central processing for all of the company (phase one), installing the system in four facilities (phase two) and, finally, expanding the system to a total of 16 facilities.

Installation took about two to three weeks per facility once all interfaces were in place, with final installations to be complete by January 2005.

IASIS held four-day in-service training programs for each of the eight hospitals that came online, with trainers available on all shifts. In addition, a nurse from each nursing unit was designated as a trainer and given responsibility for one-on-one training with agency nurses who may come in for short periods of time.

Training included a quick overview of OptiFlex and hands-on practice. Besides learning the basics of charging, trainees were shown how to put items back into the system if an item charged to a patient wasn't used, if they pulled an item from another department or if they set up custom packages such as those needed in labor delivery.

As an incentive, those who signed up for training were eligible for drawings with gift certificates as prizes. Physicians, respiratory therapists and housekeepers also received training, learning how to quickly scan a product such as a cath tray and then take it for a procedure, knowing it would be properly charged to the right patient. The sessions took place in the hospital at the actual supply scanner locations, and the system went live when training was complete.

The hardware and software required for the new system was readily available in the marketplace: a standard PC and Windows 2000 SQL Server environment. The system also requires the use of Elo touchscreens and Symbol cordless bar code scanners. The IASIS system was assembled and installed in less than 90 days.

Savings From First Month

Where do the new electronically captured charges go, once the nurse or therapist has scanned the items? They go directly to IASIS' HBOC charging system, through the Phoenix central network, and then are linked to the Lawson materials management system.

Salt Lake Regional Medical Center's Pollick figures that $90,000 a month in lost charges has been recovered by nurses using the automated scanning system instead of the manual charge sheets system. According to Pollick, by tracking chargeable items issued to the various nursing units and comparing what was actually charged for on the manual charge sheets, the organization gained a history of the charges that they trended over a six-month period. Then, by comparing the manual charge sheet totals and the amounts used by floor with the automated scanner system, they determined a monthly dollar total that they could calculate out for total savings, based on a daily census that is constant to the six-month trend.

Gilfillan believes additional benefits have accrued in staff efficiency and nursing accountability for product replenishment. Scanning enables materials management staff to print a pick list from the previous day's issue activity out of the scanner system. This pick list is generated and organized in warehouse shelf location order, for quick and efficient pulling. By not having to perform data entry, they save a major step in the process.

"The system puts nurses in tune with materials management and their own budgets. They know if they scan, they get the products they want and the bins aren't empty, eliminating the need for urgent or emergency replenishment," says Pollick.

With OptiFlex, hospital material management staffs true up inventory once a week, generating a discrepancy list that they share with nursing managers. Nursing managers must investigate why a chargeable item was missed, correct the situation or have the item charged to their nursing department budget. "It's a good management tool for nurses," says Pollick, who notes that so far discrepancies are very minimal, from $30 to $120 per week, including both chargeable and non-chargeable items.

One of the biggest gains is that automation allows the staff to focus on activities they normally aren't able to get to, such as working on inventory reduction projects and product non-usage reports for perpetual inventory areas. "We can perform basic warehouse maintenance and, with OptiFlex, track product use and trends, rather than rushing around to the cath lab or emergency room to deliver urgently needed supplies," says Pollick.


David Gilfillan

Vice President, Materials Management

IASIS Healthcare

Franklin, Tenn.



Omnicell Inc.

Mountain View, Calif.

For more information about OptiFlex from Omnicell,