Cba on Rfid Drug Inventory in Phc

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A COST-BENEFIT ANALYSIS OF AN AUTOMATED RADIO FREQUENCY IDENTIFICATION DRUG INVENTORY SYSTEM FOR PUBLIC HEALTH FACILITIES

A Thesis submitted to the Faculty of the Health Sciences Program Ateneo de Manila University Loyola Heights, Quezon City

in Partial Fulfillment of the requirements for the Degree of Bachelor of Science in Health Sciences

Hannah Paula V. Doromal Muriel Tania L. Go

February 2007

ACRONYMS
ADD BFAD BHC CHD DOH DBM DBMS EPI EPC FAMUS GAAM ICER Namfrel NSB QMMC RHU RFID SMS TDFI – – – – – – – – – – – – – – – – – – – Automated Drug Dispensing system Bureau of Food and Drugs Barangay Health Centers Center for Health Development Department of Health Department of Budget and Management Database Management System Expanded Program on Immunization Electronic Product Codes Family Health Management by/for Urban Settlers Government Accounting and Auditing Manual Incremental Cost-effectiveness Ratio National Citizens’ Movement for Free Elections Net Social Benefit Quirino Memorial Medical Center Rural Health Units Radio Frequency Identification Short Message Service Tropical Disease Foundation Inc.

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A B S T R A C T
The current system of drug inventory in the Philippine public health facilities is manually done and is mostly paper recorded, thus making it error-prone and inefficient. Medicine oversupply and shortages are not immediately addressed leading to increased holding costs and a higher incidence of distressing unavailability of medicines for patients. Inventory is not regularly monitored consequently increasing the expired and soon-to-be expired medicines in stock. This study seeks to address these issues by introducing a Radio Frequency Identification system that will: a.) decrease percent stock variation, b.) decrease the percentage of expired and soon-to-be expired drugs, and c.) increase savings and decrease potential losses in the future of Category II Tuberculosis drugs in the national warehouse level and regional warehouse level of the Department of Health. The study will also undertake a cost-benefit analysis of such a system to determine its feasibility. The researchers measured data pertaining to the above variables for the manual inventory system and will compare it with those obtained after the implementation of the RFID system. Accuracy is measured by percent stock variation, which is done by comparing stock records to actual physical count. The percentage of expired medicines was measured as the proportion of stocks that are expired or near-expiry. Assigning commensurate units of Pesos to each element involved in the manual inventory system and comparing it with those of the proposed system measured the net social benefit of the project. The cost-benefit ratio of the two systems was computed by subtracting the incremental cost benefit of the two systems by the sum of their incremental costs. The study’s results show that the RFID system is more cost beneficial than the current manual system yielding a net social benefit of Php1.6M per year. A preliminary sensitivity analysis reveals that the RFID system will remain cost-beneficial if the total percentage of stock variation is 2.59%, the lower limit of its accuracy level or the percentage expired or nearexpiry drugs is 5%. A preliminary threshold analysis reveals that the RFID system would break-even at a cost of Php3.3M or around 2 times its actual cost.

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TABLE OF CONTENTS A B S T R A C T............................................................................................ii 1. INTRODUCTION...........................................................................................1 1.1 Background ................................................................................................................ 1 1.2 Problem Statement ..................................................................................................... 3 1.3 Related Literature...
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