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Hospital Saves By Using RFID To Bring Asset Management In-House

A 500-bed hospital in southeast Georgia expends $400,000 less per year by using RFID to track its own assets, instead of paying a contractor to do it.
By Mark Roberti
Aug 11, 2010A 500-bed hospital in southeast, Ga., was looking for a better way to track the location and utilization of mobile hospital equipment, so it fired the contractor it had been using and brought the job in-house. Now, with a radio frequency identification-based real-time location system (RTLS), it is managing assets more effectively and at a lower cost.

"When I first came here in November 2004, we really didn't have a good idea of what was going on with our assets," says Al Hardy, the agent for capital purchasing and asset management at the hospital, which requested its name not be revealed. "We were unable to track their location, the cost of maintenance and utilization rates. The cost of equipment resulted in the hospital taking on debt, and we just needed to get to a better place."

Al Hardy
Hardy had known about RFID from his days in the military. He was the equivalent of a clinical engineer for a U.S. Army hospital, and while visiting a warehouse for the hospital, he noticed an RFID system that had yet to be installed. He offered to deploy it for the hospital, but the project never went forward.

Still, he remained interested in RFID, and when he joined the Georgia hospital, he began exploring the possibility of installing new enterprise asset management software along with an RFID system. The big question was how to pay for it. With the Georgia hospital already struggling with debt, there was no money for an additional capital expenditure.

Hardy and other members of the asset-management team began looking at whether it would be cheaper to take the job in-house using an RFID system, than continuing to use an outside contractor. When they priced the RFID system, they discovered it would indeed be cheaper, even when they accounted for the additional people they would need to hire to replace the contracted workers.

The next step was researching which system to use. The team read articles and then sat down with some of the main vendors of RTLSs for hospitals. During calls to other hospitals given as references, team members heard that each system did the job, but each had its own problems or idiosyncrasies. "It came down to two main issues," Hardy says. "Which companies best understood what we wanted to do, and which were within our price points."

In the end, the choice was between a system that featured 900 MHz active RFID tags and one that featured ZigBee-based 2.4 GHz active tags. The team elected to adopt the 900 MHz system through a managed-services contract (Hardy declines to name the vendor) because it met the hospital's requirements and offered the return on investment the hospital was looking for.

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