Billions Needed to Meet Drug Bar-Code Mandate

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March 17, 2003 (Computerworld) -- The Food and Drug Administration last week mandated that drug companies put bar codes on all drugs dispensed in hospitals as a means of reducing medication errors. Hospitals welcomed the prospect of error reduction, even though as an industry they will have to spend billions to deploy the technology.

The regulations apply only to drug manufacturers and not to hospitals. But as a practical matter, hospitals will need bar code readers and the networks and systems to support them. The FDA put the cost of deploying those systems at about $7.2 billion.

Hospitals don't appear to be balking at the hefty price tag, because many see it as a worthwhile investment.

Richard Coorsh, a spokesman for the Federation of American Hospitals, a Washington-based association of large, investor-owned hospital companies, said his organization has solidly backed the bar-code regulations. "We believe it will improve care and save lives," he said.

The FDA requirement for standard bar codes will save money for hospitals that have already started to deploy medication management systems, according to Jane Englebright, vice president of quality at HCA Inc. in Nashville. In testimony at an FDA hearing last year, Englebright said the lack of standard bar codes required hospitals to repackage and add bar codes to drugs at a cost to a 150-bed hospital of $162,000 per year. That compares with a one-time cost of $250,000 to equip the hospital with bar-code technology and systems, she said.

Jeff Schou, director of worldwide health care markets at Symbol Technologies Inc. in Holtsville, N.Y., estimated that close to $1 billion will be spent on wireless LAN technology to provide connectivity for nurses dispensing drugs bedside. Schou said there are roughly 6,000 hospitals in the country and only 7% of them have installed WLANs. He estimated the cost of installing WLANs at hospitals that lack such systems at between $50,000 and $500,000 each, depending on the size of the facility.

Schou said the bar code readers could function in a batch, or disconnected, mode, but he added that WLANs will be the best way to manage the system.

Steve Rough, director of pharmacy at the University of Wisconsin Hospital and Clinics in Madison, agreed, noting that batch mode doesn't provide nurses with real-time information -- a key to medication management.

The University of Wisconsin started deploying a medication management system, Admin-Rx from San Francisco-based McKesson Corp., in December 2001. That system incorporates bar codes, and according to Rough, it will revolutionize patient care and safety. Rough said the hospital has experienced an 87% reduction in the number of medication errors.

That's because the bar-code system provides multiple checks to ensure that a patient receives the correct drug. When nurses dispense medications, they first scan a bar code on their badges and then the code on the patient's bracelet and finally the code on the drug. This information is sent to a back-end database, which contains patient and prescription information.

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Billions Needed to Meet Drug Bar-Code Mandate

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