Jun 17, 2009In January of this year, a market report published by health-care technology research firm KLAS Enterprises claimed a lack of knowledge and education regarding real-time locating systems (RTLS) in the health-care industry has stalled the applications of RFID and other wireless tracking systems that can help end users manage assets, control temperatures and oversee employees and patients. Some vendors mentioned in the report, however, have recently announced significant growth in the health-care market, with hospitals, in some cases, outpacing other industries in RTLS installations. Case in point: Last week, Wi-Fi RFID technology provider AeroScout announced 150 percent health-care revenue growth in the first quarter of 2009, against the same quarter of the previous year.
With familiarity being cited as one of the more critical deciding factors for end users, the KLAS study noted, Wi-Fi has taken the bulk of RTLS deployment as a technology that is easy to install since, in many cases, the backbone is already in place. A Wi-Fi system may be considerably less intimidating to health-care providers than a hybrid system using, for instance, active 433 MHz RFID tags in one location, and a different type of technology (such as ZigBee) elsewhere.
Although systems that use Wi-Fi tags and readers account for more than half of the RTLS deployments in health care, that does not make them the best solution in every case, according to Steven Van Wagenen, KLAS' marketing and research director. Adding asset tracking or temperature tracking to an existing Wi-Fi system, for example, introduces an additional data source to an organization's computer network, and extra traffic can negatively affect network performance. In addition, he says, some hospitals have multiple needs—for instance, they may require extreme locating precision in one area, with completely different needs in another part of the facility. Ultrasound technology is more precise, Van Wagenen says, while a ZigBee mesh network can also be very precise. "Over half of end users," he adds, "are considering Wi-Fi because there is more information out there about it."
While cost is one factor that continues to inhibit deployments, Van Wagenen says, there is also a lack of understanding the options. When survey participants were asked for the names of vendors, 28 names were provided. "We weren't expecting to have so many vendors talked about," he states. But although there was considerable vendor name recognition, there was less understanding of what those companies offered. "There's a lot of room for growth in the market," he says, "and a lot of room for education."
To begin with, Van Wagenen explains, vendors need to define the return on investment (ROI) their customers stand to gain by deploying RFID. Some companies, with the economic recession in mind, have offered to subsidize the cost of their clients' installations, then receive a later payment from each end-user based on savings. "It's a way to demonstrate that they [vendors] are confident about the ROI," Van Wagenen says. In addition, vendors are making a greater effort to educate end users regarding their own systems, and health-care providers have been seeking out additional education on the technology as well.
Gabi Daniely, AeroScout's marketing and product strategy VP, describes a typical scenario: After health-care facilities install Wi-Fi networks for data sharing, they begin seeking other options as well, such as VoIP phones, tracking assets and using sensors to monitor temperatures in refrigerators. "This is where it becomes more exciting," he says, since more applications can be added to the existing network.
AeroScout reports that it has gained 30 new clients and 40 expansions of existing deployments in Q1 2009, though the company did not respond to requests to provide a breakdown quantifying the various ways in which those customers are using its RTLS system. "I have no doubt we will continue to maintain at least the growth we've experienced so far," Daniely states. Health care is moving faster now than AeroScout's other vertical markets, he says, and growth in health care may indeed be gaining traction.
Approximately 5 percent of hospitals have currently adopted a real-time locating system, according to KLAS. To create its January report, KLAS surveyed 122 health-care companies. All participants were judged by the research firm to be "progressive"—that is, more likely to adopt new technology. Of those, 29 percent were utilizing an RTLS system, and 59 percent had never deployed an RTLS system and were still not familiar enough with RTLS technology to identify the particular platform they would consider using. As a result, the study claims, potential RFID customers are unclear of their options—and, thus, reluctant to invest the resources necessary to get started.
Anecdotal claims of efficiency gains, equipment savings and improved patient care are not enough to sell the system to many health-care providers, Van Wagenen says. Instead, he adds, RTLS vendors need to clearly describe what ROI users can expect, "particularly under current economic conditions." However, 35 percent of the survey participants indicate their intention to invest in an RTLS system in the next two years. Regarding the RTLS systems already deployed in the health-care industry, the report states that 55 percent employ Wi-Fi RFID tags, while only 13 percent use other types of active RFID tags and 4 percent utilize passive tags.
"Asset tracking seems to be very popular," Rutanen says, "as it produces a quick and easy [way] to capture ROI without having to impact lots of people in the hospital." The company's strategy is to increasingly focus on the ROI, he says, adding that the company has been offering creative financing options in the face of the bad economy.
"In the next year or two, we can expect to see continued growth," Rutanen says. Larger hospital groups, he predicts, will install RTLS solutions that will help them make decisions, such as comparing asset inventory among multiple hospitals, and moving assets accordingly. He also predicts more convergence of technologies will result in RTLS solutions that support a range of auto-identification technologies, including bar-coded labels and passive RFID tags, along with Wi-Fi or other types of active RFID tags. This, Rutanen says, will enable end users to mix and match their technologies to make the deployments more affordable—tagging lower value items with passive tags or bar-coded labels that are less expensive, for example. He also expects fewer vendors to offer RTLS systems in the future. "We'll probably see some shakeout," he says of the current vendor pool of approximately two dozen.
This week, Ekahau announced that Kentucky's UK HealthCare is deploying RTLS technology to track mobile medical equipment at the University of Kentucky Albert B. Chandler Hospital, in Lexington. Ekahau is providing the system, with 2,600 tags that communicate via the hospital's existing 802.11 Wi-Fi networks.
Radianse, a provider of health-care RTLS solutions that incorporate 433 MHz active RFID tags, has seen a 26 percent growth each year for the past four years, according to the company's COO, Steve Schiefen. He attributes the continued growth in health care, despite the ailing economy, to improving end-user education. "I think they're more aware," he says. "RTLS may not have been on their radar in the past." Radianse's customers, he notes, tend to be those with a need for greater location accuracy (see Brigham and Women's Hospital Becomes Totally RTLS-enabled and Medical Center Set to Grow With RFID).
Matt Perkins, Awarepoint's CTO, says his company focuses on describing three ROI drivers to health-care providers considering deploying the company's system: better management of rental assets to reduce the cost of those rentals, fewer man-hours spent tracking assets owned by the health-care provider and reduced shrinkage through the issuing of alerts when assets are removed from the premises.
"RTLS is not quite the de facto standard among hospitals," Perkins says, "but I believe the market will move toward complete adoption in just a few years, as more hospitals are willing to embrace new technology."
Recently, the company announced the deployment of its real-time locating system at the Rebecca and John Moores UCSD Cancer Center. Two other UCSD hospitals have also deployed Awarepoint's RTLS (see UCSD Medical Center Expands Its RFID Deployment), which now covers 1.5 million square feet across the three hospitals, with more than 2,000 assets under management.
