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Children's Hospital Pharmacy Automation Expected to Slash Costs

Analysis  |  By Christopher Cheney  
   March 06, 2019

Texas Children's Hospital is implementing the latest technology to dispense, store, and administer medications.

With an automation initiative in full swing, Texas Children's Hospital is expecting to reduce medication inventory costs by 16% annually.

"Right now, we are purchasing more than $100 million per year, so 16% will be a big cost savings. It should almost pay for the cost of the automation immediately," says Gee Mathen, assistant director of pharmacy applications and technical services at the Houston-based hospital.

With the potential to improve the consistency and accuracy of dosing processes, pharmacy automation can improve patient safety—particularly in the pediatric care setting. Children's hospitals care for a wide range of patients from neonates to young adults, which creates a need for precisely calibrated medication dosing and flexibility to produce a range of doses tailored to individual patients.

For example, Texas Children's is about to start using IV robot technology in the hospital's pharmacy that will draw up doses for administration to patients. The automated technology will replace some of the effort of human technicians.

"An IV robot can draw a dose with up to 99.9% accuracy. A human gets only 97% to 98% accuracy in best runs. That 3% variation in a pediatric institution is huge. Sometimes, it could mean the difference between life and death," Mathen says.

Adopting new technology

In addition to the IV robot technology, Texas Children's has installed or is adopting several other forms of pharmacy automation.

  • Next generation smart pumps: At the bedside, the hospital is installing the newest available smart pumps for administration of drugs to patients. With the new smart pumps, doses labeled with bar codes can be scanned into the pump, and the pump is automatically programmed with orders from physicians verified by the pharmacy.
  • Omnicell XT automated cabinets provide more usable space inside medication storage cabinets. In combination with the IV robot, the hospital will be able to fill the cabinets with doses that are pre-made and have longer beyond-use dating.
  • Omnicell XR2 Automated Central Pharmacy System: XR2 is expected to allow the hospital to improve management of inventory, procurement, and storage. The hospital's goal is to examine total inventory and have complete visual control over it. The system is also expected to minimize the difficulties with back orders such as maintaining multiple formulations.
  • Omnicell Performance Center: This automated system will show exactly what pharmacological stock the hospital has available.

Achieving cost savings

With the new technology, waste avoidance is expected to generate significant cost savings at Texas Children's.

The hospital's pharmacy dispenses about 5,000 doses of medication daily for patients in three buildings and lost or missing doses are a major source of wasteful spending, Mathen says.

"Every time a lost or missing dose happens, we get a phone call from someone who has not gotten their dose. To be responsible to the patient, we dispense another dose. Ten minutes later, we get another call and have to dispense another dose. So, for one dose that we can charge for we have dispensed three doses. At least two of those doses will end up being wasted."

Inventory control challenges also drive wasteful spending.

"We have medications on the shelf that six vials cost a million dollars," Mathen says. "Can you imagine if those six vials just sat on a shelf and expired? That has happened before. We want to get away from that. We want visibility of our inventory."

Creating staff flexibility

Texas Children's automation initiative allows the hospital to redeploy human resources in the pharmacy, Mathen says. "We are not focusing on reduction—we are focusing on reassignment."

With the IV robot set to focus on commonly dispensed medications, pharmacy technicians will have more time to produce specialty formulations, he says. "This allows us to free up technician time to focus on more specialized doses such as chemotherapy and medications that take a long time to dilute."

The XR2 Automated Central Pharmacy System is going to reduce the amount of time that technicians spend pulling medications from storage carousels for dispensing to patients, Mathen says.

"Without XR2, our technicians have to come in every morning, get orders from more than 200 Omnicell cabinets, and see how many products are running out and require refills," he says. "Then technicians take an order, go to the carousel, and pull each item from the carousel and put it in a bag."

The automated system will be more efficient and enable the pharmacy to assign technicians to other tasks such as quality control functions.

"With XR2, it can receive a feed in the middle of the night from an Omnicell cabinet saying it needs some products, and XR2 can fill what is needed, bag it, label it, and put it in a bin for a tech to pick up the next morning," he says.

Keys to automation success

Mathen is convinced that the Texas Children's pharmacy automation initiative is destined for success. "I have great confidence that we will exceed many of the benchmarks that we have set," he says.

The anticipated improvement of inventory capabilities should result in a giant leap forward for the hospital's pharmacy operations.

"We are going to be able to keep better track of inventory. Until now, our inventory processes have been set to carousels and Omnicell machines," he says. "We have not had a good way to look at our inventory as well as our lot numbers and expiration dates. A lot of that has been done manually."

The automation initiative has been launched with a solid foundation.

"You need buy in from the institution because technology has a cost and it's a capital cost," Mathen says. "You need buy in from your department, and you need to be able to support the functionality when it comes into play. You need to minimize human touch—consistency is what we need in pharmacy."

Texas Children's expects to lead other children's hospitals in pharmacy automation, he says. "The autonomous pharmacy is the pharmacy of the future. We can reduce repetitive tasks, we can achieve consistency from automated functionalities, and we can put robotics into play to provide accuracy."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


Children's hospital pharmacies face unique challenges such as the need for precise dosing for neonates.

Pharmacy automation has the potential to reduce wasteful spending through improved inventory control.

The keys to success for a pharmacy automation initiative include supporting the functionality when it comes into play.

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