Tufts Medical Center (Tufts MC), a 415-bed teaching hospital located in Boston, has saved $1.5 million on stents, angioplasty balloons and other implantable devices, based on information provided by a radio frequency identification inventory-management system deployed within its catheterization, electrophysiology and interventional radiology laboratories. The system is provided as a service by WaveMark.
Tufts MC has 11 procedure rooms: four for cardiac catheterization, three for electrophysiology, three for interventional radiology and one hybrid operating room for minimally invasive surgeries. The facility handles 7,000 procedures annually and maintains an inventory of implantable devices worth $2 million.
Diane Hubisz, the operations director of Tufts MC’s CardioVascular Center, told the audience at this month’s RFID in Health Care conference and exhibition that the medical center decided to track supplies within its catheterization, electrophysiology and interventional radiology labs because supplies account for 70 percent of the labs’ costs, compared with supplies representing approximately 15 percent of the facility’s overall costs.
In 2009, the companies signed an agreement to use WaveMark’s software-as-a-service (SaaS) RFID system. When high-value items arrive, they are tagged with 13.56 MHz passive high-frequency (HF) RFID tags compliant with the ISO 15693 air-interface standard, and are placed within a WaveMark smart storage cabinet with a built-in RFID interrogator. At present, the hospital maintains 35 cabinets to track a total of 5,221 products, each with a value of more than $50.
“Before introducing RFID, we didn’t have an inventory system,” Hubisz said. “We had previously tried a bar-coding system that wasn’t effective, so we had to resort to using a manual system.”
Accurately monitoring inventory levels was difficult, Hubisz reported, because the Tufts MC had multiple vendors that supplied it with similar products that varied slightly (different size stents, for example), or comparable products that perform the same function. Managing inventory was further complicated by the constant introduction of new products, the rapid expiration and obsolescence of goods and the involvement of clinicians who had no information regarding the cost of the items they were ordering.
“We saw a lot of overstocking because technicians didn’t want to risk running out of an item,” Hubisz explained. “As a result, we had a number of product write-offs over time. We did have some products on consignment with our suppliers, but we had no control over inventory. We did not have a good handle on what we were consuming and what was on the shelf, and we were at a cost disadvantage because the suppliers had all the data.”
With the WaveMark system, a worker stocking shelves attaches an RFID tag to each product received, and then uses a WaveMark tagging station to scan that item’s bar code. The solution encodes the tag with that item’s lot number, serial number and expiration date, after which the staff member places the tagged goods within a WaveMark smart cabinet, and the inventory information is uploaded to the cloud.
Once an item is removed from a cabinet, its RFID tag is no longer read by the cabinet’s built-in WaveMark RFID reader, and that item is then decremented from inventory. The information is also forwarded to the clinical system within the lab, so the lab’s inventory-management and documentation system has that data.
“When we are ready to place an order, we can log on to the system and it shows us what was used, what our par levels are, and recommends what we should order,” Hubisz stated. “We have the ability to manually adjust the system if we know that we will need more or less of an item. We also added an additional step for added security, requiring approval before every order is placed.”
Orders are fed into Tufts MC’s materials-management system, which generates a purchase order and places the order. The PO number is transmitted back to the RFID system, so the technician that placed the order can see that it was placed and what its PO number is.
The solution allows the medical center to analyze its inventory levels across the various areas within the CardioVascular Center. Tufts MC holds a weekly meeting with representatives from the catherization, electrophysiology and interventional radiology labs, to consider standardizing similar products used within different areas of the facility, as well as trying to better manage inventory as a whole.
“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?'”