Barcoding in Healthcare

Barcodes in Healthcare A Critical Solution

A Business Case for Bar Coding

Efficiency

The trend in healthcare, as in virtually all private and public sectors, is the incorporation of standardsbased technology in the advancement of business systems and processes. While the retail, apparel and grocery industries have successfully established universally accepted product identifiers, the healthcare industry has yet to take this critical step towards supply chain efficiency.

Healthcare facilities will be able to identify and order necessary items without extensive catalogue research. Manufacturers will realise improved product visibility, and distributors will save by not having to develop and maintain multiple cross-references to track their product lines. Everyone benefits from the increased ease, speed and accuracy of ordering, distribution, payment and reimbursement.

Safety

The application of standards-based bar code technology in provider settings is also relevant to patient safety. Healthcare associations and government agencies worldwide support the use of bar coding as a tool to reduce medical errors. In its much publicised report, To Error is Human: Building a Safer Health System, the US Institute of Medicine advocated the application of bar codes on pharmaceutical and medical supplies, stating that their use would ensure that “the dispensing and administration processes are checked for timeliness and accuracy.” Bar coding is widely used in many industries outside medicine, and results in error rates are about a sixth of those due to keyboard entry.

Cost Savings

A 1998 report drafted by the consulting firm of Ernst and Young on behalf of the Efficient Healthcare Consumer Response (EHCR) coalition (comprising the American Hospital Association, HIBCC, Health Industry Distributors Association, Healthcare Distribution Management Association and Uniform Code Council) concluded that the automation of the healthcare supply chain could yield financial savings of about US$11 billion in the US market. The savings identified in the report were indicated as follows:

efficient product movement – US$6.7 billion savings
efficient order management – US$1.7 billion savings
efficient information sharing –US$2.6 billion savings.

The use of standards-based bar coding throughout international markets would ideally accomplish similar cost savings in contracting, inventory management, product identification, utilisation and benchmarking, distribution and logistics management and claims and auditing.

Reimbursement Accuracy

In the US, as in many other countries, provider systems must rely on general product categories as identifiers for billing and payment and these include a broad range of cost and quality of items. By not requiring specific product identification on submitted claims, the system is susceptible to unintentional error, overpayment and fraud. The use of automated, specific product identifiers would engender a system of accurate billing, thereby reducing the opportunity for error. A similar system for pharmaceutical reimbursement in the US was implemented using the National Drug Code (NDC). The unique labelling of drugs with product-specific identifiers enables the accurate tracking of utilisation by recording the exact product used.

Conclusion

Many organisations within the international healthcare community have proactively begun taking steps in anticipation of system reform. For example, the US Department of Veterans Affairs (VA) has installed tracking systems within its VA hospital system to monitor medical products at the bedside and link the products to the patient via electronic medical records. Studies at VA hospitals have indicated that the implementation of this system has reduced error rates significantly.

Standards-based bar coding offers the best opportunity for the most accurate and costeffective data communications systems to improve healthcare supply chain efficiency and the safety of patient care processes.

As society and technology advance, so too must healthcare systems and services. Wide availability and relative affordability of automated identification technologies support the implementation and use of bar coding. Current system failings make the need evident. HIBC standards-based product identification can foster the creation of a system that is not susceptible to fraud and abuse, is less prone to error and is better able to monitor the quality of care that beneficiaries are receiving.