The Future of Bar Codes

As healthcare providers call for increased efficiencies in medical product distribution, device manufacturers will be forced to step up their use of bar codes.

by Greg Erickson, Contributing Editor

Sometimes it's hard to imagine what we did in the days before the photocopier, the fax machine, and the supermarket scanner. (What we did, in case you've forgotten, was crank carbon paper into the typewriter, affix stamps to envelopes, and wait in slow-moving checkout lines for clerks to key in each price by hand.)

Almost as quickly as these electronic technologies became available, they were snapped up by industry leaders who recognized them as indispensable tools for boosting efficiency and saving money. Now it's hard to find any type of retail product that does not have a machine-readable bar code on its package, or a retailer who will stock an item that is not scannable.

Bar codes can be printed on almost any type of medical product package, even that of a contact lens. Photo courtesy CCL Label Inc. (Itasca, IL)


Such bar coding technology has long been available for medical devices sold in the healthcare-provider marketplace. But it has been employed by fewer than a third of all suppliers of unit-of-use packages. Why?

Steve Koenig is project manager at the Health Industry Distributors Association, a national group that is working to expand and improve electronic data interchange (EDI) capabilities throughout the healthcare industry. He says, "Customers in the grocery business have stated to their suppliers, 'You either source mark or we won't do business with you.' But nobody in the healthcare field at the customer level has forced manufacturers to do this for devices. Until somebody says that the manufacturers have to do it, they won't."

According to Garren Hagemeier, executive director of the Healthcare EDI Coalition (HEDIC), "Bar coding still has not moved into the provider facility and will not do so until there is critical mass." What he means by critical mass is a large enough number of manufacturers who decide to implement the technology. "This is a chicken-or-egg situation," Hagemeier says, "and it is up to the manufacturers to be the chicken and lay the egg."

But rather than wait for that to happen, the healthcare industry has decided to make the first move. HEDIC recently negotiated an industrywide initiative that will require bar codes on all products sold to major healthcare providers. Signed by 20 groups (representing 93% of all healthcare group contract purchases in the United States), the UPN Initiative, as it is known, should ultimately spur the device industry's use of bar codes.

Installing a bar code reader and the needed computer software at the provider's site generally represents an investment of less than $2000. Consultants say providers who install these systems are likely to see a return on their investment in less than three months. "But why," Hagemeier asks, "would providers employ this technology even if it were much less expensive? What is the point of doing so if critical mass is not reached and products received are not coded?" While they wait for critical mass to develop, he says, "providers are still checking most of their stuff in and out with clipboard and crayon." This can lead to increased cost and risk of human error.


Grocery retailers—especially the large chains—wield tremendous clout. They can and do make expensive demands on their suppliers. In comparison, says Hagemeier, buyers of medical devices (clinics, laboratories, and even the largest hospitals) are "cottage industries." Furthermore, while grocery retailers are increasingly taking on the role of promoters, healthcare providers generally are not. "You are not dealing with people in a normal marketing mode," he says. "The doctor is not marketing a product; rather, he is using that product to deliver a service. If the cost of the product to him is x, and the cost of handling it is y, he combines x and y to set his price."

But who's really keeping track? And how accurately? Mitch Cooper of the consulting firm MC&A (Chesapeake, VA) assists medical device manufacturers with turnkey bar code applications. "If you're a healthcare provider," Cooper says, "do you know the cost of your procedure? How do you know if you're making money off one procedure versus another? You can't know that unless you track the unit of use of every device involved." That's hard to do when the packages are not coded or, if they are coded, the information is not collected by providers' computerized systems.

Cooper says two bills working their way through Congress will speed acceptance of bar coding. Both are aimed at reducing confusion, overspending, and waste in the Medicare system. Legislators view bar coding at all levels—cases, inner bulk packages, and unit-of-use packages—as a solution.

Patty Roberts, marketing programs manager at Rockwell Automation/Allen-Bradley (Milwaukee), offers another rationale for bar coding. "If there is no traceability, tracking defective devices is difficult," she says. "If you have no bar code, how can you determine when the product was made and packaged and whether or not it should be part of a recall? More and more hospitals are going to start requiring bar coding from their suppliers because of the traceability issue."


The cost of bar coding to device manufacturers is not easy to estimate. One reason: The type of application system required varies with the size and shape of the package to be marked and the speed it travels down the line. Tom Thatcher, president of coding-equipment supplier Tharo Systems (Brunswick, OH), says some manufacturers will employ in-line printers, while others will preprint codes directly onto packages. Yet others will preprint small bar code labels that will later be applied to the packaging.

Regardless of which application technique is employed, bar codes are going to grow in use by device manufacturers. The chicken-and-egg situation—manufacturers waiting for their customers and customers waiting for their suppliers—will soon come to an end. Then it will be up to healthcare providers to accept unit-of-use package coding, buy readers, and fully utilize everything the technology has to offer.


Will Bar Codes Soon Be Obsolete?

Just as the compact disc replaced the LP record, advancements in package marking and tracking might one day replace the bar code. At present, bar codes contain a bare minimum of data about any product. If and when a great deal more information than that is needed, more-sophisticated codes will come into play.

"We have been doing coding for 27 years," says Natalie Bruton, regional products manager at laser coding company Lumonics (Oxnard, CA). "Bar coding is a central part of our business, but we have also been involved in the use of 2-D Data Matrix." This symbology, developed by RVSI CiMatrix (Canton, MA) and now part of the public domain, consists of a series of tiny black-and-white squares in a checkerboard pattern. The amount of information that can be written into a matrix far exceeds that of a typical bar code. Another code, says Bruton, is made up of a series of minuscule dots. This is called a snowflake. The name comes from the configuration: What looks like a kind of connect-the-dots representation of a snowflake is actually a vast amount of data.

The 2-D Data Matrix can be printed as small as 2 mm2. Photo courtesy RVSI CiMatrix


A move from bar codes to matrix or snowflake codes requires a change in printing machinery and code readers. Bruton says, "The person who can create the most economical reader is the guy who will win."

Anyone who continued to invest in LPs after the debut of CDs knows the frustration of sticking with a soon-to-be obsolete medium. Patty Roberts, marketing programs manager at Rockwell Automation/Allen Bradley (Milwaukee) says, "Healthcare companies are being prudent in waiting and not investing in something that will be outdated immediately. But for most uses, the traditional bar code seems likely to remain adequate for the foreseeable future."

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