LEAD I NG ARTICLE
4 (I): S-Il. !993 11 7!J.. 7690/91jOQ07.{)008/S03.00/O C Adis International Limited . All ri&hl$ ~Economics
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Direct Costs of Intravenous Delivery Systems Stephen W. Birdwell College of Phannacy, The Ohio State University, Columbus, Ohio. USA
As the era of cost containment continues for hospitals, managers are being forced to re-evaluate current methods of delivering services to patients. With the qevelopment and entry into the market of new methods for delivering intermittent intravenous medications, managers are faced with the decision whether to retain the current methods of intravenous delivery or to implement new or alternative systems. In order to contain costs, yet provide quality intravenous drug products, the decision-making process must include both an objective evaluation of the costs associated with each system and a subjective evaluation of system characteristics. All direct cost components associated with each intravenous delivery system should be determined. These costs include the labour and supplies used in the preparation of small-volume intravenous medications by the pharmacy department and the administration of the medication by nursing personnel. The cost of waste must also be included in the cost analysis of any system. Determination of costs should be made on a per dose basis, yielding a common unit of measure for comparing the intravenous delivery systems. Numerous studies have been conducted which compare the costs of various intravenous delivery systems. These systems include: (a) pharmacy-prepared minibags; (b) premix:ed, ready-to-use minibags and bottles (frozen and liquid); (c) manufacturer-prepared piggyback bottles; (d) syringe pump systems; (e) metered burette systems; (f) the ADDVantage lll system (Abbott Laboratories Ltd); and
(g) the controlled-release infusion system (CRISIll, IVAC). Because of the different approaches used in the cost analysis of the various systems, it is difficult to compare the results and to use the results for decision making by institutions. Some cost evaluations include labour and supplies associated with both the preparation and administration of the intravenous medication (Pax:inos et al. 1979; Smith & Amen 1988; Smith & Kitrenos 1986; Tanner & Nazarian 1984); others include labour and supply costs for preparation only (Hatoum et al. 1986, 1989; Havlovic et al. 1987; Johnson et al. 1990; Kirschenbaum et al. 1988; Kleinberg & Duafula 1988), or the costs of only the supplies used in the preparation and administration of the admix:ture (Colangelo et al. 1985; Davey et al. 1990; Goudreau & Morrissey 1985). Models have also been proposed for the analysis of these systems, including the objective evaluation of costs (Kappeler et a1. 1992), decision analysis comparing costs of obtaining desired outcomes (Witte et al. 1985), and a systems analysis approach (Crane & Stephenson 1989). Table I provides a review of the published studies, identifying those cost components considered in the cost analyses of the intravenous systems. The reader must be cautioned that the methods applied in the identification of the various cost components are not consistent among the studies, again, making it difficult to compare the results of one study with another. This article provides the information necessary to conduct a comprehensive, objective analysis of the costs associated with any intravenous delivery
,
Cosu of Intra venous Delivery Systems
system. Appropriate direct cost components are identified, including the costs of comparing and admin istering intermittent, small-volume parenteral solutions. The cost analysis yields a total cost per dose to be used in the decision-making process of comparing alternative intravenous deli very systems. While the subjective evaluation of system characteristics is also im ponant in the final decision whether or not to implement a new delivery system, this article focuses on the proced ure for conducting a cost analysis of these systems. The process for conducting a subjective evaluation is discussed onl y briefly.
J. Identification of Costs I . I Preparation Supplies Cost The total cost of preparation of supplies is determined by identifying all supplies necessary to prepare a single, sma ll-volume parenteral solution to be used with each intravenous delivery system. Typical supplies include con ta iners, diluent, alcohol swabs, syringes, needles and labels. However, suppl ies speci fic to each delivery system (e.g. admixing pump. pump tubing, upcharge) should also be included. Since several of the delivery systems use premixed admixtures. the cost of quality can· trol et sting should be determined for those parenterals prepared by pharmacy department personnel. Inventory holding costs, or costs that accrue as a result of having more inventory available than is needed alone point in time, must also be included in the calculation of the lola I preparation supplies costs per dose. Components of inventory holdi ng COSIS include cost of capi tal, taxes on i nventory, insurance costs, deprecia tion, apportioned cost of utilities, storage costs, cost of obsolescence a nd Shrinkage a nd alterna tive investment costs (Sanderson 1982). It has been estimated that the inventory holding costs range from 18 to 30% of the total value of the pharmacy's inventory (Hassan 1986; McCormack etal. 1989). To arrive at the total cost per dose for preparation supplies, the costs of all preparation supplies are summed, including the inventory holding costs.
1.2 Preparation Labour Cost To arrive at the total preparation labour costs per dose, pharmacist and technician times required to prepare a si ngle dose of an intravenous drug are determined and multiplied by the average salary and fringe benefits of pharmacists and technicians in the institution. It is important that internal data, including department-specific preparation times, be used in the calculation of labour costs. If internal data are not available, the needed information should be collected using suggested work measurement and work analysis techniques (Hepler 1986: Nickman et al. 1990; Roberts 1986; Sebastian & Thielke 1983; Siegel & Geier 1987). Several studies have reported values for preparation times (Colangelo et al. 1985; Havlovic et al. 1987; Ki rschenbaum el al. 1988; Smith & Amen 1988: Smith & Kitrenos 1986) and these may be used, however, the accuracy of the final calculated total cost per dose may be severely jeopardised when institutionspecific times are not used.
1.3 Administration Labour Cost The total cost per dose for an intravenous deli very system should include the labour costs involved with the administration of a small-vol ume medication by nursing personnel. Again, institution-specific data should be used in this determination. (finternal data are not available, similar work anal ysis and work measurement techniques used to determine average preparation times should be employed for determining average administration times. It should be realised that administration t imes for initial doses or doses associated with intravenous tubing changes may be higher than the average administration ti me for subsequent doses, because of additional steps inthe work flow process. Therefo re, to obtain an overall average adm inistration labour cost, the costs o fthe initial dose should be spread over all doses. The calculation of the overall administration labour cost includes not only the average administration times for initial and sub-
PharmacoEconomics 4 (I) /993
10
Table I. Analysis of previous studies that included cost analysis of intravenous delivery systems
Reference
Syslams evaluated
Preparation supplies
PII~jnos
ot al. (1979)
1. Metered burette
2. Pharmacy-prepared
Waste
Administration
labour
auppjies
labour
y"
y"
y.,
y.,
No
y., y., y.,
y.,
y.,
No
No No
y., y., y.,
No No
No No
y.,
y.,
No
No
Yo,
y.,
y.,
y.,
y.,
No
y"
y"
No
No
y.,
y.,
y.,
y.,
No
Yo,
y.,
y.,
No
No
y.,
y.,
y.,
y.,
y.,
No
y.,
No
y.,
No
y.,
y.,
y.,
y.,
No
No
rninlbllgs 3. Manufacturer-prepared Tanner & Nazarian (1984)
COlangelo 91 al. (1985) Goudreau & Morrissey (1985) HalOurn a\ al. (1986)
Smith & Kitn!llos (1986)
Havlovic al III. (1987)
Kirschenbaum lit a!. (1988)
b"',,, 1. Pharmacy-prepared
minibags 1. Syringe pump system 1. Syringe pump sysilim 2. Pharmacy-prapared minibags 1. Pharmacy-prapared minibags 2. Ready-to-use minibags 1. Pharmacy-prepared mlnibags 2. Manufac1urer-prepared bottJ!!s 3. Syringe pump system 4.
CRIS· 1. Pharmacy-prepared minitlags 2. Ready-tO-lise rninibags 1. Pharmacy-prllpared minibags 2. Manufacturllr-prepared
""".,
Killinberg & Dualula (1988) Smith & Amen (1988)
Davey lit a!. (1990)
Johnson lit at (1990)
3. Rllady-to-use minibags 1. Pharmacy-prllpared minibags 1. Pharmacy-prepared minibags 2. Ready-to-use minibags 3. Manufacturer-prepared bonles 4. Syringe pump system 5. Metllred burette 6. ADD·Vantagll· 7. CRIS· L IV bolus 2. Pharmacy-prepared minibags 1. Syringe pump system
Abbreviations; CRIS· - controlled release inlusion systllm; ADD-Vantage· - a combined vial and mini bag infusion system (Abbott Laboratories).
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Cosa of Intravenous Delivery Systems
sequent doses, but also an estimate of the average num ber of doses per tubing change. To estimate the average number of doses per tubing change, the hospital's policy for changing intravenous tubing should be determined. Th is policy usually involves a specifi c period for which the tubing is used before nursing personnel change it (e.g. 24 or 48 hours). A random sample of patienls' intravenous records should be reviewed to determine the average number of doses administered during the specified time period. Using personal judgment to estimate this value may not provide an accu rate estimate because some patienls receive more than one drug per tubing and some intravenous medications are discontinued before the lapse of the specified lime period. For example. hospi tals w ith apatient mix of more criticall y ill patients may find a higher average number of doses per tubing change than institutions with a more acutely ill pat ient population. On the basis of the average number of doses per tubing change, weighted time values are determined for initial and subsequent doses. To arrive at the weighted time value for initial doses, the average administration time for initial doses is multiplied by the reciprocal of the average number of doses per tubing change. The weighted time value for subsequen t doses is calcula ted by multiplyi ng the average adm inistration time for subsequent doses by onc minus the reciprocal of the average number of doses per tubing change. Summ ing the two weighted values results in the total admi nistration time per dose. The total administration labour cost per dose is determined by using the total admini stration time per dose and the average salary and fri nge benefits for nursing personnel in the inst itution. Multiplying these 2 values yield the total ad ministration labour cost per dose. 1.4 Administration Supplies Cost The costs of all supplies used by nursing personnel in the administration of a small-volume parenteral solution are identified for each intravenous delivery system. Typical supplies associ-
ated with the various systems include secondary tubing, needles, pumps, adapters and volume control sets. Again. since most administration supplies are used with the initial dose (or with intravenous tubing cha nges), Ihese costs must be spread across all doses. Therefore, a weighted value is calculated by multiplying the sum of all administration su pplies costs by the reciprocal of the average number of doses per tubing change. The resulting value is multiplied by the inventory holding costs, to produce the total administration supplies cost per dose. 1.5 Wastage Rates
The cost of waste must be included in the cost analysis of an intravenous delivery system. Wastage rates should be assessed for each system currently used in the institution. While values for wastage rate have been published in the literature (Billetar et al. 1990; Mitchell 1987; Newhouse et al. 1988; Salberg et a!. 1984), the use of depanmenl-specific values is encouraged. Wastage rates include all small-volume admixtures that cannot be used. or reused, because of flaws in preparation, breach of sterility (eit her in the pharmacy depanment or on the nursing unit) or a lapsed expiration date.
2. Calculatio" of Total Cost Per Dose The total cost per dose is calculated by first summing the val ues obtained for the total preparation supplies and labour costs per dose. The re~ suiting value is multiplied by one plus the wastage rate to yield the total preparation cost per dose. The tOlal preparation cost per dose is added 10 the lotal administration supplies and labour costs per dose to produce the final value, the total cost per dose. Some intravenous delivery systems allow for batch preparation of ntravenous i medications and the total cost per dose should be determined for bolh batch-prepared and single-dose-prepared medications. This allows for a more accurate assessment and com parison of the costs associated with each intravenous delivery system.
Pharmaco£conomics 4 (I) 1991
12
3. Subjective Evaluation Because not all drugs are avai lable, or appropriate to sue. with some delivery systems, it is nOI uncommon to find more than one intravenous delivery system being used in a single institution. Therefore. a subjecti ve evaluation of each system bei ng compared should be conducted. This evaluation includes assessing characteristics of the delivery systems: availability of drugs for use with the system; compatibility with other systems; drug stability in the system; availability of different diiuents necessary to adjust for osmolarity. The patient mi x o f toe institution should also be considered in this evaluation. Specific factors related to intravenous drug delivery may be more important for some patient populations, which will have an impact on the dedsion to use one system rather than another. These facto~ include fluid restriction, accuracy of drug delivery, dosage individualisation, fluid preference, rate of administration and frequency of fluid changes. It is imponant to assess whether or not these factors can be accommodated, based on the characteristics of each intravenous deli very system.
4. Conclusions Many published studies have evaluated the costs associated with intravenous deli very systems. However, the approaches used in the cost analyses vary, making it difficult to compare the results o r to use the results in the decision whether or not to implement a new deli very system. This article provides a comprehensive method for conducti ng a cost anal ysis of any intravenous delivery system, using hospital-specific data. and includes both pharmacy- and nursing-related costs. Managers faced with the task of evaluating intravenous delivery systems for use in their insti tutions must conduct both an objecti ve cost analysis and a subjective evaluation of each system. It is hoped that the information provided in this article will aid the manager in conducting a complete and accurate cost analysis of any intravenous delivery system.
References Billetar M. Nowak MM , R.pp RP. Hun t ML. Waste of Lv . • dmixmres in the ADD-Vanlll!e system and a uadi lional minibag system. American JOIImai of Hospital Pharmacy 47: 13981600. 1990 Colangelo A . O . rk S T.Jlnousck JP. Im plementation and eost anal ysis of a syri n&e pllmp system for intermittent i.v. dl'Uj deli vCT)'. Amentan JOllm.1 of Hospital Pharmacy 42: S8 1-584. 1985 Cnne ¥S, Stephenton BY. Evolvill8 conceptS in hospital pharmacy manqcment: systems I nalysis, desi," and manqement: implications for the hospital pharmacist, Sc:ien ti fit The ... peutics Infonn.tion, Sprin&fjeld, NJ. 1989 Davcy P, Dodd T , MaJek M. Alldit of IV antibiotic administ .... tion. Pharmlccutical Joumal 244: 7~3-796. 1990 Goudreau1S, Momssey JM. Pharmacy-initiated implementation of a syrinse pump infllsion system. American JOllma l of Hospital Pharma<:~ 42: 384-387,1985 Hassan WE. Hospital Pharmacy, 51h ed .. Lea &r. "-ebl,cr, 1'1I '1a' delphia, PA, 1986 Ha toum HT. Wille KW, Bie
13
Costs of Intravenous Delivery Systems
intravenous admixture program. Hospital Formulary 19: 375378. 1984 Sandcnon ED. Hospital purchasing and inventory managrn cnt, Aspe n Systems Corporation, Rockville, MD, 1982 Sebastian G, T hielke TS. Work analysis of an admixture service.
jectiOl1l. American Journal of Hospital Pharmacy 43: 19JO.. ]935, ]986 Tanner DJ, Nazarian MO. Cost containment associated with decreased Pllrenteral antibiotic admonistntion frequencies. American Journal of Medicine 77: 1()4..1I1, 1984
Siegel J, Gf:ier T . Workload monitoring systems for clinical phar-
macy services. Topics in Hospital Pharmacy Management 7:
PUrctUISC of frozen premixed intravenous admixtul'n. American Journal of Hospital Pharmacy 42: 835-839, 1985
33-46, 1987 Sm ith C F, Amen RJ. Comparison of seven methods of preparing and admi nistering small·volumc injections. Amcrican Journal of Hospital Pharmacy 45: 18%-1901. 1988 Smith TF. Kitrenos JG. Comparison of seven methods of preparing and ad.m inilitcring cefazolin sodium small.volume in·
Correspondence and reprints: Dr SU'phen W. Birdwell. COUqC: of Pharmacy, The Ohio State University, 217 Uoyd M. Parks Hall, SOO West 12th Avenue, Columbus, OH 43210-1291, USA.
American Journal of Hospital Pharmacy 40: 2149-2153, 1983
Wille KW, Eek TA, Vasel DP, Decision analysis applied to the
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