The UPN Initiative Gives Bar Codes New Clout

Endorsed by 20 major healthcare groups, the HEDIC-sponsored initiative achieves an industrywide consensus on the use of bar codes.

by Jim Wagner, Editor-at-Large

It's no secret that using bar codes can save the healthcare industry billions of dollars in supply chain costs. In fact, the Efficient Healthcare Consumer Response (EHCR) study of 1996 estimated the amount at $11.6 billion. So why haven't hospitals, device manufacturers, and drug makers been more aggressive in their use of bar codes?

Until now, they were confused about which format to use. Some liked the flexibility of the Health Industry Business Communication Council's HIBC-LIC alphanumeric standard. Some liked the internationally accepted Uniform Code Council's UCC/EAN all-numeric format. Some liked both.

No one liked switching from one to the other. Changing bar code formats is expensive, costing tens or even hundreds of thousands of dollars. And new bar codes mean innumerable inventory headaches. So packaging engineers watched, waited, and hoped one format would emerge as the "right" one to use.

The wait ended on February 23. The Healthcare EDI Coalition (HEDIC) convinced 20 major healthcare groups, including heavy hitters like Kaiser Permanente and Columbia/HCA Healthcare Corp., to endorse a universal product number (UPN) initiative that will be in place by July 1999. The initiative calls for "a consensus implementation process to benefit all stakeholders and the general healthcare consuming public through greater efficiencies afforded by standardized product identification and automation."

The initiative also spelled out which format to use. And the winner is...both. According to HEDIC, the universal product number will be derived from either the HIBC-LIC or UCC/EAN bar code labeling data structures and will be universally used as the key identifier on each inventory unit of all products and as the key identifier to communicate product information among all trading partners in the supply chain.

There are a few provisos. Products can't use more than one format. Manufacturers must create the UPN and associated bar codes in accordance with specifications outlined by either HIBCC or UCC/EAN, but not both, says the initiative. In addition, manufacturers must create a unique UPN for each inventory unit (carton, case, box, etc.) and label each inventory unit with a machine-readable bar code.

The initiative also calls for the creation of a single UPN database to store and disseminate bar codes. "While other industry-sector-specific and commercial UPN databases may be developed and maintained for different industry needs, we believe that industry trading partners and associations should agree to support a single central database to maintain the integrity of UPNs and basic product information in all databases. We recommend that the HIBCC UPN Repository be accepted as the single central database."

The "we" in the initiative carries a lot of weight. The 20 groups (which include federal agencies that purchase for government-owned healthcare facilities) account for 93% of all healthcare group contract purchases in the nation.

To bar code or not to bar code is no longer the question, if it ever was. When a group with this much purchasing power backs an idea, it's wise to get in line. What the initiative does is eliminate the last hurdle to using bar codes more effectively, that is, to carry in-depth product information. HEDIC obviously did its homework and went with the course that benefits everyone. Issues still remain—for example, the problem of overseas acceptance of the HIBC-LIC format—but at least the initiative moves toward using bar codes to their full potential.

The EHCR study was sponsored by the American Hospital Association/American Society for Healthcare Materials Management, the Health Industry Business Communications Council, the Health Industry Distributors Association, the National Wholesale Druggists' Association, and the Uniform Code Council.

For more information, contact the Healthcare EDI Coalition at 501/661-9408 or via E-mail at Or visit their Web site at

No votes yet