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Tufts Medical Center Saved $1.5 Million With RFID

The hospital's cloud-based inventory-management system has reduced inventory and purchasing costs by providing better data about items consumed within its procedure rooms.
By Mark Roberti
"We have right-sized our inventory levels based on the usage data we have collected," Hubisz said. "The system has allowed us to look at trends around usage by vendor and product type. We've used it quite frequently to look at rebate programs, which are based on number of units used. Personally, I use it for bulk buys. I know how much I use every quarter, and I am confident that I will use the items and get a lower price when I place a bulk order."

The medical center reduced the amount of inventory on hand by $1.3 million, because the solution provides the data and confidence to have items arrive just in time. That has reduced Tufts' losses due to item expiration.

"We found we were losing $200,000 to $300,000 annually because of items expiring before they were consumed," Hubisz explained. "Now, when we see an item is expiring, we can ask our supplier to swap it out."

Overall, Hubisz added, Tufts Medical Center reduced the cost of supplies by $1.5 million over a two-year period. That was mainly due to having improved data regarding which items were consumed, using that information during negotiations with vendors, and taking advantage of rebates and bulk discounts.

According to Hubisz, the RFID system provides a list of supplies used for a particular patient, so Tufts MC can capture those charges. She said she planned to look at integrating the RFID solution with the billing system, in order to automate charge capture.

"The benefits of the RFID system ensure we have the right product in the right place at the right time, and hopefully at the right price," Hubisz said. "We've improved patient safety by better managing expiration dates on products. Our physicians are satisfied. They are confident we have the right products on the shelves, and have a process for analyzing new products they might want. Workflow is now streamlined in terms of how we manage our inventory. And the interface with purchasing reduces ordering errors, so our staff doesn't have to call to ask, 'What happened to that order?'"

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