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Centralized Pharmacy Distribution with RFID: Insights and Best Practices from UNC Health’s Model

In today’s healthcare landscape, centralized drug distribution (sometimes called the hub and spoke model) within Integrated Delivery Networks (IDNs) ensures efficient and reliable medication management. Increasing in popularity, more hospitals are adopting the model, from 13% in 2018 to 33% of respondents in our most recent Hospital Pharmacy Operations Report (HPOR) reporting leveraging a central distribution model. 

Centralized systems (hubs) can facilitate better inventory management, especially during shortages and recalls, and support various applications beyond traditional warehouses, including supplying inventory to sister hospitals, clinics, and EMS (spokes). The model’s flexibility and potential for cost savings make it an attractive option for healthcare systems aiming to streamline their supply chains and improve efficiency across multiple sites in a similar region.

We recently hosted a webinar with UNC Health’s Katie Donowitz, System Pharmacy Manager, to discuss their approach to distributing drugs from a centralized hub to individual departments while leveraging KitCheck’s RFID technology. Here is an in-depth look at UNC Health’s system and the key strategies they employ.

Establishing the Shared Services Center

UNC Health’s Shared Services Center (SSC) was established to streamline the distribution of medications across multiple locations. The center utilizes KitCheck’s software for tray replenishment, servicing 9 locations, with 700+ code trays in distribution. The SSC operates with a dedicated pharmacist, ensuring continuous service throughout the week.

Maintaining a Code Tray Buffer

The central hub maintains a buffer of approximately sixty trays, each tagged with and organized by its expiration date for easy identification. This simple yet effective system allows the hub to send out trays with at least ninety days remaining before expiration, ensuring that the trays are viable for use for an extended period. Each site maintains a buffer and receives alerts within KitCheck when trays reach a sixty-day expiration threshold, providing the option to deploy or replenish the trays.

To optimize efficiency and minimize waste, UNC Health customizes the expiration alert thresholds within KitCheck, tailoring them to meet specific site needs. Trays with longer expiration dates are strategically sent to sites with lower turnover rates to reduce the frequency of expired tray replacements. In contrast, trays with sooner expiration dates go to larger campuses with higher drug turnover. This proactive management ensures that trays are utilized effectively, minimizing waste and maintaining an adequate supply of ready-to-use trays across all sites.


The Daily SSC Workflow

Step 1. Replenishing the hub inventory: A centralized purchasing agent team oversees all orders based on predetermined par levels, triggering daily replenishments to the kit check area. This centralized approach ensures a consistent and reliable inventory flow.

Step 2. RFID Tagging and storing the hub inventory: This is a critical verification process involving two pharmacists. The first pharmacist identifies which inventory needs RFID tagging or replenishment, and assigns and activates the tags. Then, a second pharmacist verifies details like expiration dates and drug names to ensure accuracy before the inventory goes into circulation.

Step 3. Replenishing the trays: Under the hub-and-spoke model, spoke sites send back used or expired trays to the hub, which then replenishes them one-to-one. The hub often receives trays with missing or incorrect items due to the chaotic nature of clinical environments, highlighting the need for proper drug disposal and sharps containers to handle unexpected returns.

Step 4. Delivery: UNC utilizes an external courier service to deliver the replenished code trays to the spoke sites. This ensures that all sites receive the necessary supplies promptly, maintaining a seamless and efficient workflow across the entire health system.

Challenges and Lessons Learned

Over the years, several challenges and valuable lessons have emerged:

  • Unpredictable Volume: The emergent nature of medication needs makes it difficult to predict volume accurately. Implementing a replenishment schedule helps manage this unpredictability.
  • Flexible Staffing: Cross-training pharmacists in various operations allows flexible staffing based on daily workload, ensuring that all tasks are covered efficiently.
  • Locating Trays and Drugs: KitCheck aids in dispatching and locating kits, which is particularly useful during drug recalls.
  • Sourcing and Shortages: Balancing inventory for readily available and shortage-prone drugs is crucial. Keeping a buffer of inventory helps mitigate the impact of shortages.
  • Drug Waste: Strategies are in place to handle expired drugs, either through return to the reverse distributor or repurposing for educational purposes.

Future Objectives

UNC Health is continuously looking to improve and expand its system. Future objectives include integrating pharmacy technicians into the workflow, exploring other replenishment opportunities, considering decentralized stocking, and expanding their warehouse footprint. These steps aim to optimize their system further and accommodate future growth.

Decentralized restocking is another concept under consideration. This involves tagging and shipping individual medications to hospitals, which then restock their kits. This approach offers efficiencies in purchasing and labor, supported by the advanced software used by UNC Health.

Other Resources

Webinar Recording: Central Distribution with RFID: Increase Visibility Across the Supply Chain

Product Demo: Navigating Recalls with Kitcheck