2025 Southeastern Residency Conference

Title: Implementation of an Internal Inventory Integrity Team within a Community Health System  


Authors: Maura Rodriguez, Heath Jennings, Craig MacDonald, Bradley Morgan  


Objectives:   
- Discuss the benefits of appropriate hospital pharmacy inventory management. 
- Determine important operational outcomes of an internal inventory team. 
- Identify opportunities for future research and ways to expand inventory services. 

Self-Assessment Question: True or False: When conducting inventory services, it is essential to consider the size and model of the central pharmacy, the inventory software and equipment utilized, the qualifications and training of personnel, and the timing of the inventory process.  

Background: Appropriate inventory management is critical for maintaining regulatory requirements, patient safety, financial forecasting, and integrity of pharmacy operations within a health system. While specific statistics on the exact number of health systems that utilize outsourced inventory vendors for pharmacy product counts are not readily available, it is known that outsourcing various pharmaceutical services, including inventory management, is an established practice in the healthcare industry. Many health systems are adopting this practice to improve efficiency, accuracy, and cost-effectiveness. This study aims to determine whether a difference exists in inventory accounting practices with implementation of an internal inventory integrity team.  

Methodology:   
This study employed a mixed-methods, phase-based approach to evaluate the implementation of an internal inventory integrity team within a ten-facility community health system. Quantitative analysis was performed through the implementation of an internal team. A small sample of cycle count audit data was collected from central pharmacies of varying sizes and models over two separate three-day periods. Audits immediately preceded the biannual inventory period conducted by the outsourced service provider in August and November of 2024. Primary outcomes and tracked metrics included inventory accuracy, timing of inventory counts, personnel requirements, and discrepancies in inventory records. The study utilized perpetual inventory workflow management software as a comparator group for internal and external inventory count accuracy rates. Descriptive statistics were employed to compare audit data collected via convenience sampling for the August audit and purposive sampling for the November audit. The focus was on timing, accuracy, and the complexity of inventory across different pharmacy models.  
Predictive modeling was utilized to estimate labor required for comprehensive counts across two different central pharmacy models of varying sizes. This will be used to validate audit time accuracy derived from the initial data. The timing and accuracy of inventory processes were monitored, with an emphasis on time validation and personnel requirements for timely completion.  
Financial impact was reviewed for the implementation of the internal inventory integrity team. These projections accounted for expected program costs including salaries as well as capital and operational expenses to complete a full internal inventory count across all facilities. Expected program savings and net savings was forecasted utilizing the relative value unit developed through the time analysis which was based on inventory size and complexity.

Results: 
The internal team had higher accuracy rates than the external vendor in Phase 1A (89.7% vs. 85.8%), Phase 1B (86.8% vs 72.1%), and Phase 2 (81.9%). Baseline inventory management system accuracy rates decreased from Phase 1A (11.4%) to Phase 1B (9.4%) and corrected inventory management system discrepancies increased from Phase 1A (7.0%) to Phase 2A (8.1%). External accuracy dropped significantly from 85.8% to 72.1%, respectively during Phase 1A to Phase 2B.
A team of up to five members (1.21-5.04 FTE) would be required to count all sites within a three-day period to ensure accuracy, precision of inventory counting and external industry competitors. Upcoming Phase 3 cost projections for a full internal inventory supported count provides a net savings of $123,200.

Conclusion:
Internal accuracy was higher and more consistent than the external vendor but there is still a need to identify how to improve inventory management system accuracy rates. Time analysis revealed that experienced technicians and buyers were most efficient, and a team of two to five members is required for accurate inventory counting at various facilities. Financially, using an internal team for inventory services is more cost-effective and time-efficient than relying on external vendors and implementing an internal inventory team would provide a net savings of $123,200. Further research will focus on system wide perpetual inventory with reliable real-time inventory management system count accuracy for quality assurance and process improvement.