Oct 25, 2006This article was originally published by RFID Update.
October 25, 2006—New findings from ABI Research of Oyster Bay, New York, indicate that neither of the primary real-time location systems (RTLS) technologies -- WiFi and active RFID -- has a clear lead in the US healthcare market. According to ABI, only 5% of North American healthcare facilities have deployed RTLS systems for asset tracking, so the market remains very much "up for grabs."
Not only is there no leader right now, there may never be one due to the fact that RTLS systems deployed in healthcare facilities are closed-loop. "There's really no reason that one would necessarily win," ABI Research analyst Sara Shah tells RFID Update, "because what one healthcare facility does with RTLS has no effect or bearing on what another one does." Furthermore, neither technology is clearly superior or cheaper. While the performance of WiFi versus active RFID can vary, the variance depends more on the particulars of the actual deployment. For example, if a hospital wants to track hundreds of assets within a single storeroom, the RTLS technology requirements would be different than if it wanted to track assets across multiple floors. "It really depends on what a hospital has in its facilities and how many assets it wants to track," says Shah.
Cost is another factor. While there isn't much difference in per-tag price between WiFi and active RFID systems, there are many other variables that contribute to the total cost of ownership. For example, WiFi RTLS has the advantage of being able to operate on top of a hospital's existing WiFi network. Sometimes this results in simpler and cheaper implementation than that of active RFID. However, if a hospital doesn't have enough access points (APs) on the existing WiFi network to support its locationing needs, more APs may have to be purchased, pushing the price and complexity higher -- sometimes high enough that an active RFID system becomes preferable.
The healthcare industry has emerged as a key vertical for RTLS systems. Healthcare facilities contain high volumes of assets, many of which are quite valuable. The inability to locate these assets quickly and prevent them from being lost, stolen, or misplaced has led to the twin inefficiencies of over-inventory and under-utilization. (Imagine a hospital perceiving a shortage of wheelchairs and deciding to buy more, when in fact some available wheelchairs are lying unnoticed and unused in a storeroom.) By tagging these assets using an RTLS system, healthcare officials can monitor their location in real-time. The primary WiFi-based RTLS vendors are AeroScout, Ekahau, and PanGo Networks; the primary active RFID-based vendors are Radianse and RF Code.
Despite the clear benefits, ABI doesn't foresee the market exploding. Unlike the compliance-driven market for passive RFID in the supply chain, there is no single factor compelling the healthcare industry to adopt RTLS. Furthermore, as technology customers, hospitals are notoriously difficult to sell into. First, their bureaucracies require the sign-off of many different departments. Second, they don't have much money to spend. "Most hospitals in the US don't actually turn a profit," notes Shah.
Thus, it will be up to the RTLS providers to penetrate the market one facility at a time, and there most likely won't be a "tipping point" like that expected in supply chain RFID. "The growth rate will be steady and incremental for the next five years," predicts Shah.
Read the press release from ABI Research
