UMass Med Center Finds Big Savings Through Tagging

According to Green, the system is providing UMass Memorial with tangible benefits. At any given time, the hospital can access a report from the WaveMark system to determine which rooms have used which particular items. "That helps us restock accordingly, so we can have just-in-time inventory," she says. "And in the age of reimbursement and making sure we are covering our costs, this gives us a fool-proof way of making sure we are billing for all the devices used. We can print reports and make sure devices are being charged to correct patients." Moreover, Green adds, the system has helped the medical center trim its inventory, which consists of both consigned and hospital-owned equipment.

For the first three months of using the system, UMass Memorial did not adjust any inventory levels. Then, after analyzing reports generated by the WaveMark system, the hospital was able to cut the inventory of its high-dollar items (such as stents and balloons) by 9 percent. The system is also expected to help it take advantage of volume ordering. The majority of devices are consigned by suppliers and are therefore purchased by the hospital only as they are used. But some suppliers offer discounts on items ordered in bulk and purchased outright. Every three months, for instance, the UMass places a bulk order of implantable cardioverter-defibrillators (ICDs) and pacemakers.

"By better understanding what our utilization rates are, we can, if necessary, increase the order so we can get a better rate," Green says. But there are also inherent risks to bulk ordering, because if the hospital doesn't use up all the items purchased and some expire or become obsolete, it must then take the write-off. By closely tracking inventory levels of such items, the medical center can gain greater insight into item usage and make better decisions about the number of items it should order.

For those items UMass receives on consignment, the WaveMark system will help it reconcile orders and payments with its suppliers. Typically, at the end of the month or quarter, the vendors and hospital agree upon items used versus items returned (returned items are then replaced at no charge). By being able to track an item's life-cycle—when it was received; when it was used, discarded or returned; or if it is still sitting on the shelf—the hospital finds it much easier to reconcile orders with its suppliers.

According to Green, WaveMark has helped the hospital reduce its stock of purchased and consigned items by providing detailed analysis, over time, of item usage. "It has helped us ensure that suppliers are keeping all expired products off the shelf," she adds.

Although UMass Memorial has not yet expanded RFID to other areas, Green says she believes the technology is well suited for the surgical department. "Operating rooms can be black holes for products, because there is always so much happening and these are big rooms," she explains. "And you have to stock so much in each room so that you are always prepared for each procedure."