Dec 10, 2013The health-care industry is poised to undergo significant changes related to information sharing and supply chain management, at the same time that the Affordable Care Act (ACA)—also known as Obamacare—is expected to swell the volume of patients that hospitals and clinics manage on a daily basis. With these changes taking place, RFID promises to be a benefit to the health-care sector, by reducing the cost of supply chain management (for tracking inventory on hand and locating missing items when needed for health-care services), according to a study conducted by researchers at Marshall University, in Huntington, W.Va. However, whether the numerous changes facing the IT departments, as well as the impending volume of patients, will encourage or discourage RFID installations has yet to be seen, says Alberto Coustasse, an associate professor of health-care administration on the faculty of Marshall University's College of Business, and a coauthor of the study. The report was published in the fall 2013 edition of Perspectives in Health Information Management, a peer-reviewed research journal. The need for electronic data management, in addition to the anticipated growth in demand for health care and health information technologies (HIT), creates what he calls "a perfect storm" that could either limit RFID deployment in the short term, or help to launch it.
Currently, the researchers say, approximately 10 percent of hospitals have an RFID-based solution in place to track equipment and supplies, using either passive or active RFID tags attached to consumables and reusable assets. That percentage is likely to rise, according to the study, but how fast this will occur depends on multiple competing issues. "The benefits from the application of RFID are potentially significant," Coustasse says, though he warns that competition from other health IT programs, as well as the lack of standardization across the sector, may delay the technology's mass adoption in the health-care market.
The Marshall University study, titled "Impact of Radio-Frequency Identification (RFID) Technologies on the Hospital Supply Chain: A Literature Review," analyzed published literature regarding RFID deployments. According to Coustasse, the researchers found that RFID provides significant financial benefits by decreasing supply chain costs, while the greatest barriers to adoption include pending electronic management requirements, a lack of interoperability with other systems, and the high cost of implementation without a clear return on investment (ROI).
Meanwhile, the perfect storm that Coustasse describes consists of multiple new mandates and incentive programs to better manage data that is putting pressure on hospitals' IT departments and budgets. "Organizations will be stressed because the colliding factors will all change the hospital in numerous ways," he states. For instance, the Health Information Technology for Economic and Clinical Health (HITECH) Act is intended to expand the adoption of health information technology, such as a nationwide network of electronic health records (EHR) or health information exchanges (HIE). This matters, he explains, because as of March 2013, there were 941 vendors providing more than 1,700 unique certified EHR products, which could create interoperability problems with RFID technology. For example, a hospital's EHR system would need to support an RFID solution that tracks patients' treatments within its emergency department.
The U.S. Department of Health and Human Services, under a mandate from Congress, has developed regulations to guide technology providers and software developers in creating certified HIE and EHR systems at hospitals. The HITECH Act provides financial incentives to medical facilities that adopt EHR technology by the end of 2014, after which it will begin imposing penalties on those that fail to meet adoptions requirements.
Hospitals are also facing an Oct. 1, 2014, mandated deadline for the adoption of the International Classification of Diseases, Tenth Revision (ICD10) for new classification codes that must be incorporated into their records. These challenges are putting further pressure and a financial strain on IT departments, and on entire hospitals, and are causing medical facilities to weigh the costs of implementing systems in order to meet ICD10 and HITECH requirements versus the expenses related to deploying RFID. "This competition presents a very real barrier [for RFID adoption]," Coustasse says—though ironically, he adds, RFID also promises to vastly improve HIT data gathering.
"The only way I see that RFID technology adoption becomes massive in health care is through a federal mandate, like 'meaningful use,'" Coustasse says, referring to a set of rules defined by the Centers for Medicare and Medicaid Services (CMS) EHR incentive programs. In 2011, the American Hospital Association (AHA) recommended the use of RFID or bar codes at patients' bedside for the purpose of medication administration. Coustasse also teaches health-care informatics systems and research courses for the university's health-care administration and health informatics master's degree programs, and discovered RFID as one of his programs' research topics. In 2008, he began including RFID in his research curriculum, and both students and faculty members embarked on researching RFID deployment in the health-care market, along with the benefits the technology might provide.
In 2010, Coustasse completed a study related to radio frequency identification and its ability to prevent drug counterfeiting (see "Pharmaceutical Counterfeiting and the RFID Technology Intervention"). Results indicated that using RFID to monitor drugs at the item level at various points along the pharmaceutical supply change could, indeed, reduce the problem of counterfeit medicines.
The more recent study—a survey of published reports about how hospitals reduce supply chain costs through the use of RFID—found a significant savings for those employing the technology. Coustasse's team utilized a mix of databases and online sources to compile a set of references covering both academic, peer-reviewed research and practitioner literature. The databases and sources used were EBSCOhost, Academic Search Premier, PubMed, Consumer Health Complete, CINAHL, Health Source: Consumer Edition and RFID Journal. The criteria that the researchers used to select the literature review included technological issues, organizational issues and the organizational impact of technology. Only articles written in English were considered for review. In an attempt to stay current in research, all articles and references older than 12 years (starting from 2000) were eliminated from the search. This literature review yielded 89 references that Coustasse's team assessed for information pertaining to this research project. The team used 13 of those references in the introduction and methodology, with the other 76 sources mined for the results, tables and discussion sections.
The resulting report cites a University of Arkansas finding that the average health-care organization surveyed spends more than $100 million each year on supply chain functions, which equips approximately one-third of its annual budget. Inefficiency in supply chain management drives that cost up. The Marshall University study determined that a 200-bed hospital could save approximately $600,000 annually by implementing RFID, thanks to decreased equipment shrinkage and rentals, a deferred need for new purchases and improved staff productivity.
However, Coustasse says, his team found the lack of standardization to be one of the most significant barriers to RFID deployment. Most hospitals currently use legacy management-system software, requiring a facility to build interfaces between that software and any RFID technology it installs. Most RFID-based asset-tracking solutions are added onto a technology infrastructure with preexisting systems that interoperate weakly or not at all. Coustasse predicts that it will require some large health-care companies—such as teaching hospitals or hospital chains—to lead the way with a standard for RFID technology that other medical facilities will then follow in their own RFID deployments.
The wildcard for the health-care industry is the ACA, which is expected to increase the volume of patients to hospitals and clinics, and could lead to hospital reorganizations during the coming years, including acquisitions and mergers. Coustasse says he cannot predict how Obamacare may affect RFID's adoption, but believes it could serve to boost adoptions simply because the larger patient volume will lead to a more complex supply chain that must be managed as efficiently as possible, in order to ensure against waste. The use of RFID, he notes, "can lower the direct and indirect costs in patient care," as well as "create a safer hospital environment for patients," through the automation of processes, a reduction of errors and improved quality of patient care.
According to the study, two areas of challenge related to implementing RFID simultaneous with growing patient volume will be managing the volume of data generated through RFID use, and filtering out redundant information and duplicate readings.
Hospitals have begun incorporating RFID into the blood supply chain, and Coustasse has launched a new study to evaluate the value that RFID brings, as well as how the technology may improve a facility's overall operations.
