Part 1: RFID in Healthcare

As shown in Figure 1, the currently accepted approach (the “general approach”) is to pilot an RFID project in one department that comprises only that department’s valuable assets above $3,000. Usually the pilot project goals are for increased patient safety and to track high-value shrinkage. We suggest an approach (the “micro-modular approach”) at the level of the medical object—the micro level. We assume the medical object to have it’s own four walls; just as any department or facility has four walls.




Within the healthcare industry, at the healthcare provider level, there are unique lifesaving requirements that dictate RFID implementation drivers that differ from those used within other industries. The micro-modular approach in Figure 1 divides each department into a matrix for a better visibility and higher returns. For instance, saving a life by a procedure, task, event (represented by the lower vertical boxes), performed by a scalpel, bedpan and medical object (represented by the lower horizontal boxes) conducted in the surgical department (Department 1), may take precedent over the other departments’ needs for the same medical object. Manufacturers call this process “just-in-time management.” The top row of horizontal boxes denotes other departments.

The viability of RFID in healthcare at a micro level can be proven as a closed-loop system, by viewing each procedure and department in the hospital, and how each single item is utilized. Once the micro-level systems are in place, one can then modularly build the entire RFID structure from the viewpoint of an individual product, with ROI achieved at each modular building block.

The key will be to develop cost and asset-reporting ends independently, while congruently monitoring the horizontal and vertical organizational issues. Additional considerations for RFID implementation are EPCglobal’s Electronic Product Code standards that are slowly evolving, new hardware technology and the convergence of the open systems and software development standards that should address future and current healthcare standards and regulations.

The Micro-Modular Approach
The healthcare industry needs to address declining profits due to increasing expenses, limited resources and declining reimbursements from public and private carriers. Given the present environment, the healthcare industry would undoubtedly invest in RFID if there were a solid financial case for improving profitability and operational efficiencies. However, a total end-to-end informational-systems and financial solution is currently not viable in the healthcare supply chain. Therefore, we suggest proving the supply chain’s viability within the “modular four walls”; first at the medical-object level then expanding the item’s value through the procedure, department and the facility.

An RFID item-level implementation uncovers the hidden true value of any object. The object’s true value will deliver the financial proof of RFID’s cost-effectiveness at the item level. An item’s true value is calculated on its list price and accounting for the many different repeated functions where it is used throughout the departments and in various procedures during its life expectancy. By properly calculating the single object’s true value—its life expectancy, usefulness across departments and in procedural events—the organization will be able to recover previously unrecorded efficiency gains of the object, thus resulting in the object’s true value.