Viewpoint: Throwing Money Down the Drain?

AUGUST 20, 2012
Terri Albarano, PharmD, MS; David A. Cecere, PharmD, MBA
Our hospital pharmacy was requested by administration to take a closer look at cost-containment strategies so that we could operate within budgetary guidelines. With quality initiatives in health care gaining momentum, our health system is looking for ways to become more efficient and continue to provide quality, costeffective care. Traditionally, we focus on medication-use processes, purchasing contracts, and reimbursement when initiating cost-management programs. Consequently, IV product waste went undetected when the hospital pharmacy was considering cost-saving initiatives. We investigated the extent to which an IV waste reduction program reduces IV waste, costs, and human resources in the hospital pharmacy setting.


Allegheny General Hospital (AGH) is a 661-bed academic tertiary care center located in Pittsburgh, Pennsylvania. As part of an ongoing cost-savings initiative, the management team took notice of a large number of returned IVs waiting to be wasted in the pharmacy. Pharmacy managers wanted to determine how much money the department spent on expired IV returns. This inquiry led to the first IV waste audit in December 2008. During the 2-week audit all expired, admixed IV products were placed in a designated area in the central pharmacy. Drug name, strength, quantity, and location were recorded on a Microsoft Excel spreadsheet. At the end of the audit, total waste numbers and associated costs were calculated and annualized. Using the 80:20 rule, the top 10 admixed IV drugs wasted by cost were also identified and a summary of the audit was presented to the pharmacy staff.

The audit showed the pharmacy wasted 1277 IV bags costing $16,256 during the 14-day period. These data estimate the pharmacy wasted 33,215 IV bags annually, at a cost of $391,753 annually. Additional calculations, using time and motion studies, estimate the pharmacy utilized approximately 0.98 FTE preparing IV products that were subsequently wasted.

As a result of these findings, the pharmacy department created a pharmacy quality improvement team to develop an action plan to decrease IV waste within the hospital. The quality improvement team was made up of representatives of pharmacy management, the sterile products area, pharmacy operations, and the clinical team. Each member of the team had previously served on quality improvement teams sometime in their career.

Analysis and Resolution

Following the initial IV waste audit, the pharmacy quality improvement team developed an action plan to decrease IV waste. The action plan consisted of 3 process improvements: standardizing diluent options for titratable IV medications in the hospital’s computerized physician order entry system (CPOE), mixing IV bags with a stability of 24 hours or less no sooner than 2 hours prior to their hang time, and educating the pharmacy staff on the key metrics of the IV waste audit.

A second waste audit was conducted in March 2009 to determine if IV waste had decreased as a result of the process improvements made by the pharmacy team. The 14-day audit showed IV waste had decreased by 213 bags (1277 wasted bags in December to 1064 wasted bags in March) with a subsequent decrease in associated costs of $4510 ($16,256 wasted in December to $11,746 wasted in March). The extrapolation of this savings out to a year equated to wasting 5475 less bags with an associated savings of $84,627 annually. Based on this dramatic improvement, the pharmacy quality improvement team decided to conduct additional IV waste audits in hopes of further driving down the expenditure.

Following the second audit, the pharmacy quality improvement team reviewed the data. Using the 80:20 rule, it was determined that 10 admixed IV drugs wasted accounted for the majority of the cost. The team decided to focus on the 10 drugs on this list to help reduce the cost of IV waste. For example, once admixed, Ferrlecit has a very short expiration. A possible solution to the Ferrlecit waste problem is to admix the drug only after nursing calls for a dose. The team also believed that converting the once-daily IV batch to 2 daily batches would be beneficial to decreasing the waste metrics.

A third IV waste audit was scheduled for June 2009. The June 2009 audit was conducted over a 14-day period and showed a further decrease in IV waste of 602 bags (1064 bags wasted in March to 462 bags wasted in June) with a decrease in associated costs of $5492 ($11,748 wasted in March to $6256 wasted in June). The extrapolation of this savings out to a year equated to wasting 15,652 less bags with an associated savings of $142,792 annually. The action plan was to continue to concentrate on decreasing our IV waste for the top 10 drugs wasted.

The fourth audit conducted in September 2009 showed a slight increase in waste over the June audit, with an increase in the number of bags wasted over the 14-day period from 462 to 588. The cost savings appeared to have leveled off, and new ideas to further the decrease of IV waste were needed. Three ideas were pursued. For one, the pharmacy team investigated purchasing premixed IV products from a compounding pharmacy. These compounding pharmacies employ rigorous stability testing and are able to give their products longer expiration dating than a typical hospital pharmacy. The team looked at the cost of wasted drug versus the cost of the compounded, pre-mixed product when determining which pre-mixed products to purchase.

Ideas That Worked

An example of where we purchased a pre-mixed product was nicardipine. Once admixed, nicardipine has an expiration of 24 hours. Most patients started on nicardipine require a new IV bag of nicardipine every 1 to 5 hours (depending on the rate of infusion), resulting in the IV room admixing a large number of nicardipine bags for a single patient. Nicardipine is often discontinued abruptly, leaving a large number of nicardipine bags to be wasted. Based on this information, the team decided to purchase commercially available premixed IV bags of nicardipine. The premixed bags of nicardipine are more costly than the vials of drug; however, the cost of nicardipine waste offsets the difference in price.

For the second idea, the team believed that an automated solution was needed to further control IV waste. Subsequently, the pharmacy received approval to purchase a pharmacy work flow management system (DoseEdge) for the IV room.1 The work flow management system streamlines the previously manual work flow for pharmacy IV doses through bar code drug verification, automatic dose calculation, image capture of dose creation, and improving pharmacist checking activity. Pharmacists have access to the system from any computer in the hospital that has the DoseEdge software loaded. This software system enables pharmacists to track and check IV doses from virtually anywhere in the health system.

The pharmacy department decided that expensive, short-stability (≤24 hours), and titratable IVs would be placed on a 4-hour hold, meaning the work flow management system would not allow these medications to be admixed earlier than 4 hours prior to the administration time. Another feature the work flow management system provides is the ability to track IV medications that were already prepared. This helps decrease waste because missing doses can be tracked through the system. Employees can see what time a medication was prepared and/or delivered by pharmacy. This feature cuts down on the amount of duplicate doses being dispensed by pharmacy.

The third idea involved increasing the number of IV batches from 2 to 3 daily. It was felt by increasing batches we could further decrease IV waste by catching a greater number of discontinued IV products, before they are admixed, through the hospital’s COPD system.

Consequently, the fifth 14-day waste audit conducted in December 2009 showed a decrease of 238 bags (588 wasted bags in September to 350 wasted bags in December). The extrapolation of this savings out to a year equated to wasting approximately 6200 less IV bags.

To validate our findings, a sixth IV waste audit was conducted in March 2010. The findings showed a slight increase in IV waste of 42 bags (350 wasted bags in December to 392 wasted bags in March). However, there was a decrease in the associated cost of IV waste of $4098 ($7720 wasted in December to $3622 wasted in March). The extrapolation of this savings out to a year equated to approximately $75,000. The substantial decrease in cost was attributed to the additional purchase of pre-mixed products with longer stability dating and the 4-hour hold the pharmacy work flow management system places on expensive, short-stability, and titratable products.

The process improvements initiated by the pharmacy department at AGH to decrease IV waste and the associated costs were successful.

Following the initial IV waste audit, using time and motion studies for IV preparation, the quality improvement team determined that approximately 0.98 FTE prepared IV medications that were subsequently wasted. Using the same time and motion study IV preparation numbers, the final waste audit showed pharmacy reduced that number to approximately 0.31 FTE. With the new work flow, doses are being prepared closer to the time of administration, duplicate doses are being eliminated through the DoseEdge system’s IV tracking, and improperly admixed doses are minimized through the DoseEdge system’s bar-code verification system.

More Opportunities

There are areas which the pharmacy recognizes as opportunities to further decrease IV waste within the hospital. For example, one current limitation in our ability to further decrease IV waste is our CPOE system’s inability to generate more than 3 IV batches daily. While increasing the number of batches (to 3 batches daily) helped decrease the amount of IV waste generated by pharmacy, a study by Alexander et al showed an estimated annual savings of $122,000 and a 0.5 full-time equivalent (FTE) reduction after implementation of an every-4-hour IV batch process.2

Patient discharges and discontinued orders occur throughout the day and many of these patient discharges and/or discontinued orders occur after the batch was prepared and delivered to the floors. Increasing the number of daily batches decreases IV waste because discharged patients and discontinued IVs are automatically pulled from the batch before they are admixed. We are currently working with Information Systems on a software upgrade that would allow us to run 4 IV batches daily.

Another limitation on our ability to further decrease IV waste is the poor communication between pharmacy and nursing, which has been found to be a major contributor to IV waste.3 Our institution’s pharmacy department is working with nursing to streamline notification of discharged patients. Currently there is a lag time between time of patient discharge and removal of the patient from the CPOE system. Therefore, IVs are sometimes mixed for patients who are discharged.

This study shows that by conducting scheduled IV waste audits followed by a process improvement action plan, a hospital can identify and significantly reduce IV waste costs. As of March 2012, the pharmacy had decreased IV waste by 24,000 bags annually, with an estimated cost savings of $300,000 annually. The audits have been reduced to biannual IV waste audits with the goal of further decreasing IV waste.

Terri Albarano, PharmD, MS, is manager of pharmacy operations at Allegheny General Hospital. David Cecere, PharmD, MBA, is system director of pharmaceutical supply chain at West Penn Allegheny Health System.

1 DoseEdge® version 1.7.3, Baxa Corporation, Englewood, Colorado
2. Jenkins A, Rowe E, Granko R, et al. Effects of a new sterile product preparation and delivery process on operational efficiency and cost. Am J Health-Syst Pharm. 2010; 67:1645-49.
3. Diehl LD, Goo ED, Sumiye, et al. Reducing Waste of Intravenous Solutions. Am J Hosp Pharm. 1992; 49:106-8.


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