Always, Better and Control - Vital, Essential, Desirable Matrix Analysis of The Drug Store of A Tertiary Care Teaching Hospital of North India
Always, Better and Control - Vital, Essential, Desirable Matrix Analysis of The Drug Store of A Tertiary Care Teaching Hospital of North India
Always, Better and Control - Vital, Essential, Desirable Matrix Analysis of The Drug Store of A Tertiary Care Teaching Hospital of North India
DOI: http://dx.doi.org/10.18203/2320-6012.ijrms20195546
Original Research Article
Department of Hospital Administration, Government Medical College Hospital, Chandigarh, Punjab, India
*Correspondence:
Dr. Sonali Shamdasani,
E-mail: sonali7872@gmail.com
Copyright: © the author(s), publisher and licensee Medip Academy. This is an open-access article distributed under
the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial
use, distribution, and reproduction in any medium, provided the original work is properly cited.
ABSTRACT
Background: Substantial improvement can be brought about in the hospital inventory and drug expenditure by
inventory control techniques. These include ABC (always, better and control), VED (vital, essential and desirable)
and ABC-VED matrix analysis. The objective of the study was to categorize the drugs based on cost and criticality
and identify those which require stringent managerial control.
Methods: ABC analysis according to drug expenditure, VED analysis according to criticality of the drugs, ABC-
VED matrix analysis to classify drugs into category I, II and III was done for drug store of a tertiary care teaching
hospital of North India for the period of April, 2018 to March, 2019.
Results: The total number of the drug items used by the drug store was 315. The total drug expenditure was Rs.
9,61,29,859. By ABC analysis, it was found that 15.24%, 22.54% and 62.22% items belonged to A, B and C category
respectively, accounting for 70%, 20% and 10% of Annual Drug Expenditure (ADE). VED analysis showed that
31.11%, 60.32% and 8.57% were V, E, and D category items respectively, accounting for 30.44%, 57.12% and
12.44% of ADE. By ABC-VED matrix analysis, 42.86%, 52.38% and 4.76% items were category I, II and III items
respectively, accounting for 78.91%, 20.15% and 0.94% of ADE.
Conclusions: The study depicted the items belonging to category I which requires top managerial control, also the
items belonging to categories II and III which require control by middle and lower managerial level respectively.
Keywords: Always better and control analysis, Always better and control - vital essential and desirable matrix, Cost,
Drugs, Inventory, Vital essential and desirable analysis
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Gupta RK et al. Int J Res Med Sci. 2019 Dec;7(12):4728-4732
designing and organizing the drug store in a manner that The present study has been conducted in a tertiary care
results in efficient clinical and administrative services.4 teaching hospital of North India where there is huge
The goal of the hospital supply system is to ensure inflow of patients directly or through referrals. To satisfy
adequate stock of the required items so that an the healthcare needs of rising number of patients, it is
uninterrupted supply of such items is maintained. necessary to use the resources wisely. Thus, ABC
Therefore, hospitals need to adapt efficient techniques for analysis, VED analysis and thereafter, ABC-VED matrix
inventory control. A savings of 1% or 2% from these analysis was done so as to have strict inventory control
costs can lead to a significant increase in hospital over the items in drug store. The objective of the study
productivity, profitability, financial performance and was to categorize the drugs based on cost and criticality
increase competitive advantage. Yiğit stated that aspects and identify those which require stringent
inventory control analysis and precautions taken in a managerial control.
study conducted in a 1500-bedded hospital, resulted in
saving 20% of the cost of expensive drugs.5 The ability to METHODS
provide the financial sustainability of hospital enterprises
with today's highly complex, technological and Study period
competitive structure can only be possible by the
availability of medical supplies and medicines at the right Study was conducted for the period of 1 year i.e., from
location, time, quantity, quality and price, protecting April 2018 to March 2019.
against the fluctuation in supply and demand, uncertainty
and minimizing waiting time.6,7 The need of the hour is to Inclusion criteria
follow the principles of rational drug use and inventory
management techniques so that in the existing budget it • The drug formulary of the hospital consisted of 377
can cater to more number of patients.8 items. Out of these, the items which were procured
by the hospital drug store during the study period
There are some commonly used inventory management were included in the study i.e. 315 items.
techniques such as:
Exclusion criteria
• ABC (Always Better Control),
• VED (Vital, Essential, Desirable items), • The items which were not purchased by the hospital
• SDE analysis (Scarce items, Difficult and Easily drug store as requirement was not raised by any
available items), department during the study period were excluded
• HML (High, Medium, Low cost items), from the study i.e. 62 items.
• FSN (Fast moving, Slow moving, Non-moving
items).9 The methodology is list of drugs purchased by the drug
store of tertiary care hospital along with their costs for the
Most commonly used amongst them are ABC and VED period of 1 year i.e. from April 2018 to March, 2019 was
analysis. obtained. The data was then transcribed in an MS Excel
spread sheet. The statistical analysis was carried out
ABC analysis, popularly known as “Always Better using MS Excel statistical functions.
Control”, is an important tool used worldwide, to identify
items that need greater attention for control. According to For ABC analysis, total cost of each item was calculated
it, 10% items consume 70% of budget (Category A), next by multiplying cost of each unit by the total quantity of
20% consume about 20% of the budget (Category B) and that item. The items were arranged in descending order of
the remaining 70% account for just 10% of the budget their costs. Cumulative cost of the list was calculated.
(Category C).10 The items were then categorized according to their costs
as per ABC analysis. The items accounting for the top
An additional parameter of assessment is criticality by 70% expenditure were classified as category A, next 20%
VED analysis. “V” is for vital items without which a as category B and the last 10% as category C. For VED
hospital cannot function, “E” for essential items without analysis, items were then classified into 3 categories
which a hospital can function but may affect the quality according to their criticality, namely, Vital, Essential and
of the services and “D” stands for desirable items, Desirable. The VED status of each item was decided with
unavailability of which will not interfere with justification by the committee which consisted of faculty
functioning.11 members and Consultant In charge, Pharmacy.
Thereafter, number and percentage of items in each
Combining these two techniques, ABC-VED matrix has category was calculated.
emerged and this matrix is the most suitable method for
hospital medical materials.12 The data from ABC and VED analysis was further used
to perform ABC-VED matrix using MS Excel worksheet.
Different classifications were presented by various The items were classified as shown in (Table 1) and
authors using ABC and VED analyses.13-16
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Gupta RK et al. Int J Res Med Sci. 2019 Dec;7(12):4728-4732
further categorized into category I, category II and (52.38%) fall in category II and 20.15% of ADE was
category III based on their criticality and cost aspects. done on them. Only 15 items (4.76%) were in category
III, consumed 0.94% of ADE and needs lowest
Table 1: ABC-VED matrix. managerial control.
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Gupta RK et al. Int J Res Med Sci. 2019 Dec;7(12):4728-4732
that almost 90% of drugs are in Category C.8 However, An ABC-VED matrix provides a balanced classification
ABC analysis has certain limitation that it is based only of the drug inventory into 3 categories based on both cost
on monetary value and cost of consumption of items. and criticality of the items. In the present study, 135
Some items of low monetary value are vital or lifesaving. items (42.86%) consuming 78.91% of the ADE belong to
Their importance cannot be overlooked simply because Category I, 165 items (52.38%) consuming 20.15% of the
they are not in category A. Therefore, an additional ADE belong to Category II and 15 items (4.76%)
parameter of assessment is their criticality by VED consuming 0.94% of the ADE belong to Category III.
analysis. Different studies have shown variable results for ABC
VED matrix analysis as shown in (Table 6). ABC-VED
VED analysis of the drug inventory in this study shows matrix enables us to apply stringent managerial control
that, 98 items (31.11%) in vital category which accounts measures to the 135 items in Category I which are either
for 30.44% ADE, 190 items (60.32%) in essential expensive or vital.
category and expenditure incurred is 57.12% and 27
items (8.57%) in desirable category accounts for 12.44% These drugs should always be maintained in stock since
of the ADE. Similar results were observed by Khurana et they are either vital or essential. But considering the high
al8 and Mahatame et al, in their study.17 However, study cost of these drugs, a low buffer stock should be
by Wandalkar et al, classified almost 50% of the items as maintained, and strict control should be exerted on the
vital.15 So, the categorization of the items as per this prescription and utilization of these drugs. Category II
classification depends on type of healthcare facilities drugs can be controlled by the middle level management
being provided i.e. primary, secondary or tertiary. and Category III drugs can be controlled by lower
managerial level. Appropriate ordering techniques should
be employed for the different categories.
Table 6: Comparison of various ABC, VED and ABC-VED matrix study results.
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Gupta RK et al. Int J Res Med Sci. 2019 Dec;7(12):4728-4732
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