The medication barcode rule

Linear barcode

2-D barcode

Awareness of the value of linear barcodes in healthcare got a boost with the medication barcode rule, enacted in 2004 in response to the Institute of Medicine’s 1999 To Err is Human report, which found that as many as 98,000 people die in hospitals each year as a result of preventable medical errors. The rule mandated that certain human drug and biological product labels contain a linear barcode consisting of the National Drug Code (NDC).

Today, Mark Neuenschwander President of The Neuenschwander Company, estimates 60 percent of hospitals are scanning medications at the point of care, e.g., the bedside, up considerably from just a few years ago. But for many, that is still not a high enough percentage, given that the law went into effect in 2006, but Neuenschwander says that number represents 70 percent of U.S. hospital beds and that the laggards are primarily smaller hospitals — not unlike the situation in retail. Lack of necessary technology to scan barcoded pharmaceuticals, capture the data and transmit it to clinical, business and financial systems has been cited as a primary reason why some hospitals and other healthcare providers are not utilizing the barcodes more extensively.

Unique Device Identification (UDI) rule

The FDA is expected to issue the final UDI rule – requiring medical device manufacturers to label their products with auto ID carriers attached to unique device identifiers or UDIs – later this year. While hospitals and healthcare systems have been among the strongest proponents of the UDI rule, some wonder if technology will once again prove to be a barrier. Unlike the medication barcode rule, the FDA is not mandating a specific auto ID carrier for UDIs. Instead manufacturers can choose among a variety of carriers, including linear and 2-D barcodes, as well as RFID, although the FDA encourages labelers to consider what their customers can actually capture electronically. For that reason, some manufacturers have stated they will include both linear and 2-D codes on labels before eventually switching to the smaller 2-D format that can hold considerably more data in a smaller space. Scanners that can read 2-D codes are less common in healthcare and can cost $300-400 each.

Neuenschwander takes exception with those healthcare providers who argue it is not worth making the investment in auto ID technology until all healthcare products bear machine readable labels. Once again, he points to retail, noting that many produce items still carry a 4-digit code — as opposed to a barcode — that has to be manually entered at the checkout stand. But few would argue that there is benefit gained — in terms of accuracy and speed — by being able to scan the majority of items.

The flexibility around auto ID carriers has some manufacturers and their customers questioning whether 2-D or RFID will ever replace the linear barcode. Neuenschwander says, absolutely not, noting that 2-D is still only used on a limited basis in retail. As for RFID, he says it will probably only augment, but never replace, the barcode. As he put it, "Just because something is sexy doesn’t mean it’s the best thing to do." Others in the industry agree, noting that RFID has its place, e.g., for very expensive medical equipment that moves around a healthcare facility and must be tracked over a long period of time, while barcodes work just as well for consumable products.

It’s not the carrier, it’s the code

Regardless of the format, the real value in auto ID carriers is the data behind the code. But to work, that data must be associated with an industry standard code, as opposed to a proprietary identifier. With proprietary codes, the same number can be used to represent more than one kind of product. The UDI rule will solve this problem by requiring the codes to be issued by one of three standards bodies expected to be named as authorized issuing agencies by the FDA: GS1, HIBCC and ICCBBA. Because none of these standards bodies use the same codes, there is not the risk of using the same identifier as there is with proprietary codes.

And it’s how you use it

The real value from auto ID technology comes when providers and others are able to automate how data is captured and shared among systems and functions, to understand which products are being purchased and more importantly used in the delivery of patient care. But only when there is standardized data and interoperability between systems can we achieve a more seamless process, with little or no human intervention. Automation in this manner can reduce both labor and the risk of data entry errors.

Accurately capturing, sharing and storing data in a consistent manner across systems also makes it easier for healthcare providers to track product usage for charge capture, recall management and comparative effectiveness research, among other activities. By sharing consumption data with manufacturers, healthcare providers can also begin to tackle the challenge of lack of demand signals in healthcare. Better demand signals allow all parties to better manage inventory levels, another area where the retail industry has achieved significant savings.