Cost-benefit analysis of a hospital pharmacy bar code solution

Saverio M Maviglia, Jane Y Yoo, Calvin Franz, Erica Featherstone, William Churchill, David W Bates, Tejal K Gandhi, Eric G Poon
Archives of Internal Medicine 2007 April 23, 167 (8): 788-94

BACKGROUND: Bar coding can reduce hospital pharmacy dispensing errors, but it is unclear if the benefits of this technology justify its costs. The purpose of this study was to assess the costs and benefits and determine the return on investment at the institutional level for implementing a pharmacy bar code system.

METHODS: We performed a cost-benefit analysis of a bar code-assisted medication-dispensing system within a large, academic, nonprofit tertiary care hospital pharmacy. We took the implementing hospital's perspective for a 5-year horizon. The primary outcome was the net financial cost and benefit after 5 years. The secondary outcome was the time until total benefits equaled total costs. Single-variable, 2-variable, and multiple-variable Monte Carlo sensitivity analyses were performed to test the stability of the outcomes.

RESULTS: In inflation- and time value-adjusted 2005 dollars, total costs during 5 years were $2.24 million ($1.31 million in 1-time costs during the initial 3.5 years and $342 000 per year in recurring costs starting in year 3). The primary benefit was a decrease in adverse drug events from dispensing errors (517 events annually), resulting in an annual savings of $2.20 million. The net benefit after 5 years was $3.49 million. The break-even point for the hospital's investment occurred within 1 year after becoming fully operational. A net benefit was achieved within 10 years under almost all sensitivity scenarios. In the Monte Carlo simulation, the net benefit during 5 years was $3.2 million (95% confidence interval, -$1.2 million to $12.1 million), and the break-even point for return on investment occurred after 51 months (95% confidence interval, 30 to 180 months).

CONCLUSION: Implementation of a bar code-assisted medication-dispensing system in hospital pharmacies can result in a positive financial return on investment for the health care organization.

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