University Hospital –
Rehab Department Inventory System Redesign
Draft of Final Report
IE 476
April 18, 2000
Melissa Garcia
Jon Olson
Tony Warren Client Background
The client for our design project is University Hospital & Clinics Rehab Department. Speech Pathologists Amy Eckert and Vicki Hill and Management Engineer Patrick Laemmrich serve as our primary contacts.
The Rehab Department is divided into five function areas: Medical/Surgical, Rehab, Pediatrics, Orthopedics/Hands, and Neurology. Each of these sub-departments works as a part of team to provide care and service to patients at the hospital. Specialties within the Rehab Department are Speech Pathology, Physical Therapy, and Occupational Therapy.
Problem
The problem statement as it read in the course syllabus said:
“The Rehab Department maintains an inventory of equipment that we
lend to patients. We would like a team to evaluate and improve our
processes for organizing and cataloging equipment. Our current processes
are painstaking, hand written, and non-automated system. We want to
review how the system works, what can be improved in the manual system,
and what improvement automation can provide. The Hospital uses several
types of inventory systems in other departments, such as bar code
scanning, par level, and just in time. If appropriate, we may be able to
expand these systems into the Rehab Department.”
During our initial meeting with the client, Ms. Hill began by giving a short verbal description of the problem, which was similar to the problem statement above. However, she continued from there and began explaining difficulties the Rehab Department was having with “resale items.” She explained that resale items are products that are given to patients to help rehabilitation but are not billed as part of the therapy.
The current system for resale items works in the following manner. Supplies are held in one of five storage areas, each one roughly assigned to each of the functional area listed above. Each of these function areas is also a “cost center” with a budget for the year.
When supplies are found to be low in a storage area, a therapist will assemble an order of what is needed to replenish the closet. This order is given to the Purchasing Agent, Lori Entringer. Lori then places an order with the companies that supply products to the Rehab department. Because of the need to keep the cost centers’ budgets separate, Lori cannot consolidate orders from different areas. This leads to a situation where double orders for the same supply are frequently placed.
When supplies arrive, they are delivered directly to Lori. She and a team of student employees place double stickers on each item. These are then delivered to the correct storage closet for use.
The problem with this system occurs when a therapist gathers supplies to use with a patient. The sticker on each item must be removed from the item and placed on the patient’s bill for correct billing to occur. This often does not happen. Another problem with this system are inaccuracies in cost centers being billed. Because the cost center is charged when items are ordered and there is nothing to prevent therapists from other supply cabinets, the amount of supplies used by a team often does not equal the supplies ordered by that team.
At the end of Vicki’s description of the problem, it became apparent that two separate but related problems were present. Given the constraints on our time, we determined only one problem could be worked on. We presented this back to our client and they agreed that the resale items held a higher priority.
Best Practices
We examined two systems to use as benchmarks for our project. The UWHC Central Supply was the first best practice to be analyzed, which was mentioned by the Rehab Department in our initial meeting. The Hospital Information Systems (HIS) mentioned how the Emergency Room (ER) and Intensive Care Unit (ICU) handle similar situations.
Central Supply handles medical supplies and linens for most departments in the hospital. It is a huge distribution center located in the basement of the UWHC. Since many supplies must be distributed to many different areas, inventory and cost control are necessities. A scanner system makes this necessity a comprehendible reality.
This scanner system consists of three main components: wireless scanner, bar codes, and Peoplesoft. The wireless scanner allows for the employees to easily scan materials throughout the supply area with no range of use. Janus is the name of the wireless scanners used in this system. Bar codes are needed to scan the separate items. Peoplesoft is a very complex management computer system, but in this application only the inventory tracking section is needed.
The scanner system applicable to our project was used for the individual carts, which are brought to the many areas in the hospital. An individual cart contains bins for each item with a label. The label contains: item name, item number, re-order point, and initial quantity.
The ER and ICU uses a less technical approach than the Central Supply. The ER and ICU are often connected by the quick transition of patients from one department to the next. An index card system is used to ensure that patients and departments are charged correctly. An index card is placed in a plastic sleeve on each new patients bed. Health providers place item stickers of goods, which were given to the patients, on the index card. This card follows the patient around the department and does not get removed from the patient until the patient leaves the department. This system allows for the patient to be billed accurately for the supplies used and also allows for the correct department to be charged.
Alternatives Considered
After examining the systems in our Best Practices analysis, we decided to consider the following alternatives: individual patient index cards, patient logs, wand, scanner, wireless scanner, or do nothing.
The individual patient index card idea came from the Emergency Room (ER) and Intensive Care Unit (ICU). In these units, each patient is given an index card that stays with them for their entire stay with that unit. The stickers from resale items are placed on the card. The card is removed from the patient’s chart before they move to a different unit or are discharged. All charges from the card are then directly billed to the patient’s account.
To adapt this to our problem, each index card would contain the following information: patient name, Medical Record (MR) number and corresponding barcode, and In/out patient status. A “Rollodex” would hold these cards at each station and would be manually rotated by clerical staff.
The Rehab department currently uses Patient logs that are carried by each therapist. We are going to modify this system by having patient bar codes printed in addition to other information that they currently have (same as index card). A binder will hold these at each supply cabinet so the therapist will no longer have to carry it with them.
The wand is the most inexpensive method to read barcodes. It is also fragile and prone to breaking. It resembles a pen with a light and in order to read barcode, it must touch the surface as it is being swiped over. The wand would require a PC at each supply closet.
The scanner is a step up from the wand. It requires a PC at each location as well, but is more durable than a wand and does not require physical contact with the barcode.
A wireless scanner is similar to the scanner above except it does not require a PC, is more expensive, and requires a docking port to download information. The final option considered is the “do nothing” option where we would advise the Rehab department to continue with its current practice.
Data Used
The data analysis for this problem was limited. We gathered data from patient billing statements and compared this with the quantities of supplies ordered by each cost center. After analyzing this, we concluded that about $1000/month could be saved by an improved inventory management system.
Recommendations
After reviewing our alternatives with our client, we came to an agreement that the best solution would be to have a wireless scanner combined with a patient log at each location. The reason for this conclusion was that the index card system would most likely produce a lot of clutter in the supply cabinet areas. The patient log is something that they currently use, but we have improved it by adding a function into their computer system that will print the patients’ bar codes also on the log. Right now, student helpers print the patient logs every morning before the therapists arrive, so we are not adding too much work for them to print additional copies for the supply area. The therapists are relieved of having the responsibility of carrying their log with them, so it will now be more convenient to bill the patients at the time of pulling the resale items they need.
The wireless scanner was chosen, because although it was the most expensive option, it offered the most flexibility. It doesn’t have to be connected to a computer terminal, which allows for more space in the supply rooms. The data can be retrieved from the cartridges the following morning before the therapists arrive by the clerical staff that currently arrives earlier than the therapists. By doing this the cartridges will be removed at a time when the scanners are not needed to be used by the therapist and the patients are still billed in he required time frame.
Expected benefits
The benefits of our proposed solution are well worth the cost of the system. The rehab department will have better tracking of their inventory. The computerized system will automatically re-order items at the specified re-order points given to us by the rehab department. They will have a better knowledge of which cost centers use which products and can modify their supply areas to reflect that. The correct cost centers will be billed for the materials that they used only. Patient billing will be much more accurate and will increase revenue by $1000 per month. The system encourages therapist participation, because they know that if they don’t scan their products out, the computer inventory system will think that there are more items available than there are actually and the reorders will not be made at the appropriate time.
Plans for implementation
In order to implement this system we have designated a worker from the hospital to continue our project. We have provided them with a complete list of our contacts, and with a budget of different brands of scanners and software and the pros and cons of each option. We have also provided them with a recommendation of the scanner and software we suggest and why we feel that way.
Lessons learned
The lessons learned fall into two broad categories – lessons on the project content and lessons on the project process.
Because our client indicated their preference for a scanner/barcode system, we were forced to become knowledgeable on the hardware and software to make this a possibility. We also had to learn about the way the Rehab department functioned as units attached to different departments and thus had different budgets. We also learned how the Rehab department defended its independence and refused to work with Central Supply. The need to present the processes in a clear manner forced us to develop flow chart that was new for us. The design and maintenance of the web page proved to be a challenge because we had no experience.
The project process was also educational. The project solution would seem to be within our reach if we would speak with one more person. However, when we would speak with that person, we discovered our problem was much larger or complex than we thought. The value of clearly written and organized notes was also an important lesson.