1. VHA INNOVATION PROGRAM Innovation #665 Hazardous Pharmaceuticals (HazPharm) VHA ISB Business Case September 25, 2013

2. VETERANS HEALTH ADMINISTRATION Project Background Problem Statement – Every VA pharmacy in the country carries pharmaceuticals that present hazards for human exposure and environmental hazards upon disposal. This has created the following problems:  Technicians handle, package, and dispose of pharmaceuticals without knowing the hazards  Hazardous pharmaceuticals are packaged and processed through automation causing cross contamination, exposing Veterans to risk unnecessarily.  Nurses administer medication without knowing handling or disposal hazards  VA professionals who mishandle hazardous pharmaceuticals put everyone who enters VAMCs at risk  Improper handling and disposal of pharmaceuticals makes VA susceptible to substantial fines from the Environmental Protection Agency (EPA) and other regulatory agencies  The VHA healthcare system is behind the industry standard in pharmaceutical waste management making it particularly vulnerable to scrutiny by regulatory watchdogs Description of Proposed Solution – HazPharm seeks to modify necessary VA systems to properly identify hazardous pharmaceuticals for handling precautions and disposal instructions. This will serve to protect the Veterans, VA staff, and the environment. This includes:  Implementation of a national hazardous pharmaceutical drug file marking in computer database  Pharmacy Product Systems – National (PPS-N) enhancement to store hazard data downloaded from external source  National Drug File (NDF)/VistA Pharmacy enhancement to provide pharmacy look-up file, disposal labeling and reporting, and local modification when necessary to reflect state variation in EPA code  Bar Code Medication Administration (BCMA) enhancement to provide nursing with warnings of drug hazards prior to handling them 1

3. VETERANS HEALTH ADMINISTRATION Execution Status Functional prototype in the VA Innovation Sandbox includes: –PPS-N enhancement for “Hazardous for Handle” and “Hazardous to Dispose” data storage with coding for import of data/updates from external sources –NDF-Local/VistA Pharmacy enhancement for “Hazardous to Handle” and “Hazardous to Dispose” data storage (auto-populated by PPS-N), look-up file for pharmacy access, and security key functionality for local editing to accommodate variations in EPA codes from State-to-State –BCMA enhancement for a hazard column with hazard icons to inpatient medication screens for “Hazardous to Handle” and/or “Hazardous to Dispose” pharmaceuticals and bar code driven pop-up warning for nurses who administer medications Final code and documentation is being submitted to OSEHRA Support of Pharmacy Benefits Management (PBM) leadership for enterprise-wide release HazPharm supports fulfillment of the Hazardous Drugs NSR (20130302) submitted by PBM HazPharm utilized a multi-disciplinary SME workgroup for development input which included: PBM pharmacists, nurses, environmental engineers, industrial hygienists, and health and safety and pharmacy informatics reps High level, project specific, tasks required for enterprise deployment: –Replication of changes made for PPS-N into the national instance of PPS-N (source code change from Stericycle data to VISN 2 maintained data file) –Addition of label and report functionality in the VistA Pharmacy package –Import of VistA Pharmacy package programming from OSEHRA into VistA development environment (NDF-Local used for prototype development will need conversion to NDF-National) for Pharmacy Data Management and BCMA (PSS* and PSB* patches) – Six (6) month pilot at approximately six (6) sites and Class III to Class I verification performed prior to national release NOTE: Evaluation necessary to determine how PPS-N changes will be seen at non-test sites during initial operating capability phase 2

4. VETERANS HEALTH ADMINISTRATION ISB Selection Criteria 3 CriteriaSee…Self-Assigned Score ComplianceSlide 41 Five-Year Net Operational Cost ChangeSlide 5, 63 Implementation CostSlide 7-6 Clinical Impact (Broadness)Slide 810 Clinical Impact (Degree)Slide 810 Business Impact (Broadness)Slide 910 Business Impact (Degree)Slide 910 Patient SafetySlide 103 Patient ValueSlide 115 Healthcare DisparitySlide 121 Summary Value = 1 * (17+29) = 46 Business Value = 3 + (-6) + 10 + 10 = 17 Clinical Value = 10 + 10 + 5 + 1 + 3 = 29

5. VETERANS HEALTH ADMINISTRATION Business Case – Compliance HazPharm is compliant with regulations, including patient safety –Improves employee and patient safety by providing pharmacy and nursing personnel a valuable tool for better decision making when handling hazardous pharmaceuticals and disposing of pharmaceuticals when they become waste. –Improves compliance regulating bodies such as EPA, Department of Transportation (DOT),Occupational Safety and Health Administration (OSHA), and the Joint Commission. –HazPharm complies with patient safety requirements 4 Self Assigned Score: 1 –Improves compliance with Resource Conservation and Recovery Act (RCRA) of 1976 (40 CFR), the Clean Water Act (40 CFR Parts 122 and 403), Hazardous Materials Transportation Safety Act (49 CFR), as well as, the Federal Enforcement Act of 1992 which strengthened the enforcement of RCRA at federal facilities. Compliance will prevent VA hospital pharmaceutical waste from going into streams and soil.

6. VETERANS HEALTH ADMINISTRATION Business Case – 5 Year Net Operational Cost Change 5 Hazardous Waste Violations: In VISN 15 alone, there were two EPA civil settlements for hazardous waste violations involving 3 VAMCs over a 5 year span from 2006 to 2011. These violations were predominantly for pharmaceutical waste, and upon final civil settlement of the violations, VISN 15 spent a total of $551,549 to properly identify, segregate, and manage pharmaceutical and chemical waste at their facilities. To determine the VA‘s cost on civil settlements, one could extrapolate VISN 15’s 5 year cost to all 23 VISNs in the VHA Healthcare System.  Assumption: All VISNs incur a similar number of hazardous waste violations and resulting penalties and civil settlements as found in VISN 15 HazPharm can provide a computerized, accessible, and easy-to-use waste characterization tool to help ALL VISNs/VAMCs properly identify, segregate and manage pharmaceutical waste. Self Assigned Score: 5

7. VETERANS HEALTH ADMINISTRATION Business Case – 5 Year Net Operational Cost Change (cont) 6 Waste Characterization: At this time, VAMC Pharmaceutical Waste Management programs operate independent of one another. The lack of shared waste characterization tools have resulted in individual VAMCs paying for waste characterization. PBM Pharmaceutical Waste Workgroup reported $108,000 in total expenditures for waste characterization over 18 VAMCs ($6,000 per VAMC). Extrapolate this $6,000 cost to all VAMCs (150) and the VA spends a total of $900,000 for waste characterization annually.  Assumption: All VAMCs spend a similar amount on waste characterization as identified by the PBM Pharmaceutical Waste Workgroup If each VAMC only updated their waste characterization annually (conservative estimate as new drugs are continuously added and product formulations change), the 5 year cost for waste characterization would be significant for information that could be obtained nationally and uniformly shared via production implementation of HazPharm. TOTAL SAVINGS: HazPharm would save VA approximately $14,685,625 over 5 years or $2,937,107 annually (see slide 14) between unnecessary hazardous waste civil settlements and redundant waste characterization.. Self Assigned Score: 5

8. VETERANS HEALTH ADMINISTRATION Business Case - Implementation Costs 7 Self Assigned Score: -6 Year 1Year 2Year 3Year 4Year 5 Pilot Phase$1,280,000$0 Deployment Phase$0$1,500,000$0 Annual Total$1,280,000$1,500,000$0 Cumulative Costs$1,280,000$2,780,000

9. VETERANS HEALTH ADMINISTRATION Business Case – Clinical Impact Broadness: HazPharm positively impacts five (5) clinical performance metrics 8 Self Assigned Score, Broadness: 10 Self Assigned Score, Degree: 10 Clinical Performance MetricDegree of Impact Cleanliness of hospital environment (NDPP) 10% improvement Communication with nurses (NDPP) 25% improvement Communication about medication (NDPP) 25% improvement Responsiveness of hospital staff (NDPP)5% improvement Telephone responsiveness (NDPP/QI)5% improvement Degree: HazPharm positively impacts these metrics in the following ways -Proper use of personal protective equipment while handling hazardous pharmaceuticals will prevent transfer and movement of hazardous residue throughout hospitals -Improved communication of “Hazardous to Handle” and “Hazardous to Dispose” data to nurses -Improved communication regarding hazardous medication will result in better handling, storage, segregation, packaging,and disposal practices -Time saved by nursing and pharmacy staff will increase responsiveness to patient needs -Improvements in telephone responsiveness on pharmacy help lines by freeing technicians as a result of streamlining pharmaceutical waste management process

10. VETERANS HEALTH ADMINISTRATION Business Case – Business Impact Broadness: HazPharm positively impacts six (6) business performance metrics 9 Self Assigned Score, Broadness: 10 Self Assigned Score, Degree: 10 Degree: HazPharm positively impacts these metrics in the following ways –Improves decision making by VA staff regarding proper handling and disposal of hazardous pharmaceuticals –Standardizes and implements best practices of pharmaceutical waste management –Streamlines the pharmaceutical waste management process –Enhances access and quality of hazardous pharmaceutical data to VA staff –Increased efficiency by reducing management of pharmaceutical waste characterization to a National level –Reduces cost by avoiding redundant waste characterizations and EPA penalties –Time savings will result in shorter pharmacy wait times and improved timeliness in patient care areas –Improves hospital safety through risk management –Minimization of risk associated with disposing of hazardous medications Business Performance MetricDegree of Impact Improved accuracy of decision making (quality of work) 20% improvement Standardization of best practices (quality of work) 20% improvement Enhanced data access, integrity, or aggregation (quality of work) 15% improvement Reduces program or organizational risk (quality of work) 20% improvement Reduces costs (VA staff efficiency or workflow) 15% improvement Improves the environment of care (Veteran/beneficiary’s experience) 10% improvement

11. VETERANS HEALTH ADMINISTRATION Business Case - Patient Safety HazPharm demonstratively improves patient safety -Reduces chance that cross contamination would occur as a result of hazardous pharmaceuticals being packaged via local automation systems thus exposing our Veterans to hazardous pharmaceuticals unnecessarily. -Reduces spread of hazardous pharmaceutical residue throughout VAMCs due to improper handling practices. Safe handling not only protects VA staff, but it also protects our Veterans and everyone who enters the VAMC. Veteran medical care should be provided in the safest environments possible. Evaluation Criteria Scored -10 to 10 where -10 is severe decrease in patient safety, 0 is no change in patient safety and +10 is very strong impact in patient safety 1.Demonstratively reduces preventative harm in this population: 4 2.Reduces mortality and morbidity in this population: 1 3.Improves patient safety by demonstratively reducing the chance of human error: 4 10 Self Assigned Score: 3

12. VETERANS HEALTH ADMINISTRATION Business Case – Patient Value HazPharm clearly increases patient satisfaction -The current pharmaceutical waste management process for pharmacy and nursing is cumbersome and inefficient. -Time spent sorting, characterizing, packaging, and hand labeling pharmaceutical waste is better spent providing patient care. -HazPharm will streamline waste identification and pharmaceutical waste management thus freeing pharmacists, pharmacy technicians, and nurses for patient care. -Time saved can be spent improving the timeliness of care in patient care areas and decreasing patient wait times. 11 Self Assigned Score: 5

13. VETERANS HEALTH ADMINISTRATION Business Case – Healthcare Disparity HazPharm does not address a healthcare disparity 12 Self Assigned Score: 1

14. VETERANS HEALTH ADMINISTRATION Back Up Slides 13

15. VETERANS HEALTH ADMINISTRATION Other Considerations - Calculating the Annual Cost Savings for HazPharm 14 Data ElementAmount Cost of hazardous waste civil settlements for VISN 15 over5 year period (2006 - 2011) 1 $551,549 Annual cost of hazardous waste civil settlements for VISN 15 ($551,549/5)$110,309 Number VISNs in VHA Healthcare System23 Annual cost of civil settlements for hazardous waste violations extrapolated to entire VHA Healthcare System ($110,309 x 23) $2,537,107 Annual cost savings from elimination of redundant waste characterizations extrapolated to entire VHA Healthcare System (see slide 6) $900,000 Total annual cost savings ($2,537,107 + $900,000)$3,437,107 Total annual cost savings less operational expenses for sustainment and increased capability ($500k) $2,937,107 Net operational cost savings over 5 year period$14,685,525

16. VETERANS HEALTH ADMINISTRATION Other Considerations – Exposure Risk by Volume The above warning was issued by the National Institute for Occupational Safety and Health (NIOSH) in 2004. NIOSH publishes an updated listing of hazardous to handle medications as well as handling guidelines for healthcare workers. Nationally, VA pharmacy employees handle an estimated 164.2 million inpatient medication doses and an additional 49.7 million outpatient prescriptions per year. VA nurses administers an estimated 17 million inpatient doses through BCMA. Per Stericycle waste characterization, 20.7% of pharmaceuticals characterized were either hazardous to handle, hazardous to dispose, or both. The VA provides Personal Protective Equipment (PPE) to protect employees and to prevent the spread of contamination. PPE is only effective if employees use it and know when to use it. * evaluated by available NDC codes 15 Warning! Working with or near hazardous drugs in health care settings may cause skin rashes, infertility, miscarriage, birth defects, and possibly leukemia or other cancers.

17. VETERANS HEALTH ADMINISTRATION Other Considerations – Reality Check 16 If pharmaceutical waste characterization were easy, everyone would do it, right? Pharmaceutical waste would be characterized at the time of generation, labeled, stored, transported, and disposed of correctly, and VAMCs would be EPA compliant. HazPharm will provide quality tools to pharmacists, pharmacy technicians, and nurses. VA HazPharm will: –Be an instant training tool for hazardous pharmaceuticals –Make up-to-date waste characterization data available to everyone who needs it (at their finger tips and at the scan of a bar code) –Streamline pharmacy waste management by making the process easy –Protect employees, patients and visitors –Insure regulatory compliance Give VAMCs a real tool: –To evaluate pharmaceutical disposal practices –To conduct pharmaceutical waste minimization which will lead to future cost savings that can be attained from reduction of pharmaceutical waste.

18. VETERANS HEALTH ADMINISTRATION Other Considerations – PPS-N Enhancement Screenshot 17 New Hazardous to Handle and Hazardous to Dispose Fields

19. VETERANS HEALTH ADMINISTRATION Other Considerations – NDF/Vista Pharmacy Screenshot 18 NDF/Vista Look-up for Pharmacy Access with Local Control to accommodate individual State EPA Code

20. VETERANS HEALTH ADMINISTRATION Other Considerations – BCMA Hazard Icons Screenshot 19 Note: New Hazard Column with Hazardous to Handle and Hazardous to Dispose Icons, Sortable with Hover Technology

21. VETERANS HEALTH ADMINISTRATION Other Considerations – BCMA Pop-up Box Screenshot 20 Note: Pop-up box warning triggered by Bar Code Scan by Nurse