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As bar coding and radiofrequency identification (RFID), as well as real-time location systems (RTLS), may very well represent the present and potentially future technologies, respectively, for tracking products, healthcare facilities continue to debate the realistic merits of fully upgrading to chips and tags in lieu of stripes.

HPN: How soon do you anticipate RFID-/RTLS-based closed and open systems will emerge in the healthcare market, based on your company’s internal market research of anticipated demand?

Jeff Bolton, regional director of operations – west,
PAR Excellence Systems, Cincinnati

Bryan Christianson, vice president, marketing, Mobile Aspects Inc., Pittsburgh, PA

Todd Tabel, vice president, enterprise resource planning (ERP) solutions,
McKesson Corp., San Francisco

Bryant Broder, senior product manager,
Skytron, Grand Rapids, MI

BOLTON: Conceptually, this is highly feasible. Current point-of-use systems are highly flexible in their data architecture and can adapt readily to new formats of information collection. It’s important to note that to realize the true potential of any of these technologies our industry must embrace data standards and the disciplines that go with it. It is this investment and the adoption of the HSCSC recommended GS1 standards that will enable our supply chains and their related technology to fulfill their potential.

CHRISTIANSON: It’s very feasible to incorporate both technologies into a single unit and in fact, it’s something that Mobile Aspects is providing today based on the requirements from several of our clients. The primary driver of the clients’ request is an interest in using a single solution to manage their inventory. Commonly, the RFID technology is designated to manage the more expensive inventory items, such as physician preference items, while the bar-code scanning technology is designated to manage the less expensive inventory items.

TABEL: Technologically, this is very feasible. However, an RFID cabinet/shelf will always cost more than a non-RFID cabinet/shelf. Will a facility want to sacrifice real estate in an RFID cabinet/shelf to hold non-RFID items? Once again, this decision will be measured primarily by the ROI of the solution, while also considering ease of use by clinicians.

PLESHEK: As these technologies mature, the ability to create menu-based, modular system designs which incorporate both RFID and barcode technologies will become more readily available. The capability to connect RFID based cabinets with smart shelves and bar-code scanners to provide a range of product identification and asset tracking services from a single hub is feasible. However, due to cost versus benefit realities this may take longer than expected. 

BOLTON: Supply chain models of the future must have these features and functionality. PAR Excellence currently offers four distinct technologies for data collection. Prudent analysis is required when matching hardware and software components to the unique and often subtle requirements of each supply location. Equally important is the development of the business intelligence collected from these technologies. The business intelligence component will leverage this transactional knowledge into process improvement.

CHRISTIANSON: It could make sense for a system to support the interchange of either RFID or barcode scanning technology. However, the market seems to be more interested in two other needs. The first need is the ability for a system to support configuration changes as inventory needs evolve. For example, as they see changes to their product mix by introducing new products with different sizes and dimensions, they seek systems that can more easily accommodate these spatial changes without going through significant effort and cost to physically configure systems to store the new items.

TABEL: As healthcare facilities constantly ‘remap their real estate’ to maximize patient revenue and quality of care, having the ability to interchange components can give them added flexibility. McKesson anticipates that manufacturers will offer modularity and flexibility in their solutions driven by market need. This will likely include the ability to swap cabinets, shelves and racks in and out of different applications, as well as modular software solutions geared towards the supply locations, such as central supply, the ED, nursing floors, cath labs, OR, etc.

BOLTON: Perhaps. This market like most markets will mature into a space providing a broad spectrum of products. Ranging from ‘freeware’ to scaleable off-the- shelf technology, to one-of-a-kind custom configurations.

CHRISTIANSON: Although custom-designed solutions would be ideal for each hospital, the reality of creating affordable, custom-designed solutions reaches significant constraints when considering the fact that these technologies, and in particular RFID-based technologies, utilize sophisticated electrical components. Instead of custom-designed solutions, we see the market asking for more variety in the technology offerings. For instance, they have an expectation from vendors that the technology is offered in more than one form factor so that a variety of solutions can be deployed to accommodate the unique needs and characteristics of their clinical environment. Commonly this includes a combination of stationary cabinets, mobile carts, handheld applications and other solutions.

TABEL: If modularity and flexibility are required in the marketplace, manufacturers will offer these features. As with any product, the price will be determined by the cost to the manufacturer and the value derived by customers.

TABEL: Facilities don’t have to choose between the two – bar coding and RFID technologies can co-exist. The main issue that will determine to what extent healthcare facilities choose to use each is cost, specifically the cost of the item being tagged. Bar codes make sense for tracking lower-cost items because the cost of a bar code is so low. RFID tags and chips make sense for tracking items that are more expensive. With active RFID tags running between $30 and $100 a piece, it’s cost-prohibitive to use RFID tags for bandages. It’s McKesson’s belief that these technologies will co-exist going forward, applied where they facilitate proper, timely delivery for a justifiable cost, and that McKesson’s clinical and back-office software will be enabled to make the most of them. 

TABEL: The decision between a bar code versus RFID supply automation solution will be driven off of three things: ROI, patient safety and the availability of bar codes/RFID tags on items from the manufacturers. A bar code approach will be promoted as a cost-effective solution for managing all items, particularly low-cost items that facilities don’t need to track in real time. An RFID approach will be promoted as a supply management tool that increases accuracy and compliance. It will be used to automate the management of high cost/risk products to ensure accuracy and real-time location status; for example, locating an IV pump or tracking a consignment item that has expired or been recalled. These items warrant RFID because of their high cost, but also because patient safety can be compromised if treatment is delayed due to ‘lost’ equipment or if recalled items are not identified before being used in a case.

Keith Gifford, vice president, marketing,
InnerSpace Corp., Grand Rapids, MI

TABEL: In terms of generating an ROI, this is a likely scenario. Initially, RFID will be used for high cost/risk products, though the footprint of RFID will evolve and expand as market adoption increases.

GIFFORD: Driven by the cost of RFID technology, including RFID tags, it makes
financial sense to apply the technology to items that have the greatest impact on a hospital’s bottom line. On average, 65 percent of an acute care hospital’s supply costs are concentrated within three departments: Cardiology, radiology and surgery. Five percent of the total number of items in these departments account for 50 percent of
the total supply costs and 85 percent of the total chargeable value of supplies. Referencing the information above, it is the 5 percent of items that need to be kept secure, as well as tracked and managed with RFID. Until such time that the cost of RFID technology dramatically decreases and/or clinical device manufacturers begin applying RFID tags as part of their processes, the balance of clinical supplies have a cost/benefit curve that is better supported by bar-code systems.

TABEL: McKesson anticipates that modular approaches will be offered, and that ultimately, the modular design approach will prove to be the most successful. In some ways this is already happening — for example, there are tablet PCs just coming into use in hospitals that incorporate both bar-code scanners and RFID readers. Additionally, items that are bar coded can also have RFID tags on them — even RFID tags can be bar coded. 

GIFFORD: The two technologies can be easily integrated with respect to data reporting. However, there are fundamental differences with bar code and RFID technologies when it comes to data collection. Bar codes require line-of-site in order to be scanned versus RFID tags that can be read through most non-metallic materials. Bar codes can only be read one at a time where as many RFID tags can be read at the same time. RFID systems use antenna arrays – to create an RF field – and a reader – to decode the information embedded in the tags – to identify and track supplies. 

Depending on the RFID technology employed – high frequency versus ultra-high frequency – tagged items must be within a specific distance of antenna array in order to be read. Because of the costs associated with RFID systems, there is little to no financial justification for storing supplies using bar code and RFID technologies in the same physical space. As the adoption rate of RFID technology increases, associated costs will decrease to the point where it will make sense to track and manage even low-cost items using RFID.