In spite of their critical role within the health system — and the life-saving care they provide — hospitals today continue to be bogged down by archaic practices and inefficiencies that are costly not only for hospitals themselves, but also for those receiving care. Take “hospital pharmacy kits,” for example. Also known as code trays, crash carts and anesthesiology kits, these care packs are located throughout hospitals (often as many as 50 of them) to give doctors, nurses and care providers quick access to the life-saving medication and equipment contained within.
Once used, these kits return to hospital pharmacies and, after technicians take inventory, the three to eight items they typically contain (though some have as many as 200) are re-stocked. The problem is, however, that pharmacists usually have to go through the tedious process of making sure the medications and equipment in these kits are up to date — something a barcode doesn’t always catch. As a result, the Joint Commission cites out-of-date pharmacy kits (and the medication therein) as one of “the most common citations for non-compliance” and, on average, 20 percent of these critical life-saving packs come with medications that are out of date, according to Forbes.
After talking to a friend who worked at one of these hospital pharmacies and hearing her account of the tedious inventory processes that prevail at most hospitals, Kevin MacDonald decided to devise a solution. As a former RFID engineer at Sun Microsystems, MacDonald knew there had to be a way to automate this process and give hospitals a more efficient way to track inventory. In April of last year, he and his co-founders launched Kit Check — a cloud-based software solution that hospitals can install in “less than one hour” — to do just that.
To decrease the time and cost of manually processing pharmacy kits, Kit Check supplemented its software with RFID-outfitted scanning stations to automate the inventory process and allow pharmacists to discover what’s missing from their kits in a matter of minutes. In so doing, the founders claim that Kit Check can reduce a 30 minute-plus grind to a 3-minute process and that several of its hospital customers have reduced 20 percent “out-of-date rates” to under one percent. To further add incentive for hospitals and reduce onboarding friction, Kit Check doesn’t require any installation on-site — or the need for in-house IT support.
In doing so, Kit Check says that it has found hospital pharmacy directors eager to test the new system, and the startup recently added both the University of Maryland Medical Center and NYU Langone Medical center. Alongside another five paying customers, the founders expect nine more hospitals to begin rolling out Kit Check’s technology in the next few months.
Although the startup doesn’t disclose what it charges hospitals, MacDonald says that each expired medication found saves hospitals up to $4, and that kit-scanning (writ large) costs hospitals over $2 billion each year. Of course, the startup isn’t alone in seeing the opportunity inherent to this kind of cost savings. Competitors like MedKeeper, for example, also sell tools to hospitals that aim to help them automate this process.
However, MacDonald believes that Kit Check’s leg up and primary differentiation can be found in the fact that it uses RFID tech, rather than barcodes — like many of its competitors. With this in mind, Kit Check has also attracted the attention of investors.
After graduating from Rock Health’s accelerator earlier this year with $100K in seed capital under its belt, Kit Check is looking to accelerate growth and build out its sales force and delivery staff to take advantage of the window of opportunity while it’s open — and meet customer demand. To do so, the startup announced this morning that it has raised $10.4 million in series A financing led by New Leaf Venture Partners, with contributions from Sands Capital Ventures, Easton Capital Investment Group and LionBird.
The type of technology and software solution Kit Check is selling to hospitals isn’t cheap, but as long as the startup can keep production costs low (and, in turn, the price tag for hospitals), there could be plenty of greenfield ahead for Kit Check. After all, it’s worked thus far.
Kit Check at home here.