Last of two parts
by Rick Dana Barlow

Symbol Technologies Inc.

If RFID chips were available in Fibber McGee & Molly’s day, the Golden Age radio duo’s ritual stuffed closet gag wouldn’t have been the laugh riot it was in the late 1930s through the

1950s. Now imagine a cluttered and disorganized storeroom in which you didn’t care where you put anything, postulated Lydon Neumann, vice president, Capgemini’s health supply chain practice, Chicago. "With RFID it doesn’t have to be organized because the technology will tell you what’s in there and where to find it," he said. "The ultimate RFID system enables you to tag something and put it in the room. Of course, I’m not recommending anyone do that."

For such an ultimate RFID system to work in that way the materials manager would have to either take an inventory and program that data into the room’s RFID chip or put high-end tags on every product, which could be rather costly right now.

Of course, bar coding a surgical tray requires similar effort. Someone has to scan each instrument and relate that to the complete tray, which also sports its own bar code label. If you change an instrument in the tray you have to rescan the tray’s bar code, as well as that of the instrument. With RFID all you would have to do is reprogram the chip, according to Joseph Dysko, executive director, engineering and capital resource group, MedAssets Supply Chain Systems, Atlanta.

The same holds true with a closet full of biomedical equipment. "RFID enables you to open the closet door, do a quick scan and know everything that’s in the room," he said.

Chip and stripe choices
End users face a number of choices for bar code types and RFID chips and tags.

Hand Held Products IMAGETEAM 5620

Bar coding offers three options: The traditional linear one-dimensional bar code, the more expensive 2-D bar code with a greater scanning range and the RSS composite that includes a 2-D bar code on top and a linear bar code on the bottom.

RFID also offers three choices. Passive chips are the least expensive of the three at roughly 10 cents a piece, according to Neumann. These chips behave like more powerful bar codes. They’re activated by a scanning device. Semi-active chips incorporate minimal intelligence and a battery that can go into sleep mode, activating the chip only when necessary. They cost on average between $4 and $10 each with the higher-cost models being reusable. Active chips, however, are the most expensive at $10 apiece. Because they’re always transmitting the battery’s always on and they integrated with other sensing devices. They enable real-time long-range scanning.

The most common uses for active tags are for locating staff or expensive assets like a portable X-ray machine so employees avoid needless searches that take them away from delivering patient care, Dysko noted. Passive tags, however, are typically used on fixed assets, low-cost items, patients undergoing surgery (such as the Surgichip, which is designed to prevent wrong-patient, wrong-procedure and wrong-site errors) or on the nursing floor.

Another choice involves transmission frequency. Low and high frequency chips require less power, have a shorter range and are less expensive. Ultra-high frequency (UHF) chips are just the opposite. Because hospital end users are only trying to find an infusion pump, check a medication container or a patient wrist band they don’t need distant transmission capabilities, according to Don Flynn, vice president, business development, Hand Held Products, Skaneateles Falls, NY. They’re only scanning across a room or down a corridor, he added.

Plug and play
Although hospitals strategically prefer to invest in a single RFID system that can handle multiple and varied applications with a common infrastructure, experts split hairs on whether that’s really necessary or even feasible.

Depending on the application, chips and tags will be different even if the scanning and transmission devices are the same.

"Plug and play RFID is still one or two steps removed," Neumann said.

Debbie Murphy, global practice leader for life sciences, Zebra Technologies Corp., Vernon Hills, IL, concurred. "Although we need to get away from a silo mentality it’s going to be a while before we can see hospitals standardizing on one company’s software," she said.

Trying to pin down the actual cost of implementing RFID technology and comparing that cost to implementing bar code technology can be tricky. Not only are those costs dependent on the volume purchased but also on the type of RFID tag or bar code and related scanners. As a general rule, however, active RFID tags are more expensive than passive RFID tags, which are more expensive than 2-D bar codes, which are more expensive than traditional linear bar codes. Moreover, RF scanners tend to be more costly than bar code scanners.

"This is a significant factor in the total cost for implementing auto ID in healthcare, especially considering the number of scanners that are needed to equip every patient room and other areas where supplies and medications are used," said Frank Kilzer, vice president of material and facility resources at St. Alexius Medical Center (Bismarck, ND), and a pioneer in healthcare bar coding operations. He also cautioned against confusing RFID with the wireless technology that can be used in materials management information systems for gathering data in hand-held devices. "In this instance RF may be less costly than pulling wires, however, this is a different application for radio frequency than RF tags on medications or supplies," he added.

Matt Ream, senior manager of RFID systems at Zebra, applied some general numbers to the equation but reiterated that they were generalities. Basically, raw tags will cost around 20 cents each for a high-volume order and smart labels range between 35 cents and 60 cents apiece, while a printed bar code label costs less than a penny.

And the difference in pricing between more costly RFID scanners and bar code scanners varies based on the frequency used. "You can’t really compare the two because there are so many factors involved," he said. "It’s like comparing apples to oranges."

Hype or hyperbole?
With the Food and Drug Administration proposing an industry timeline that calls for pharmaceutical manufacturers to implement RFID technology, including pallet and case labeling, by 2007 as an anti-counterfeiting measure with supply chain efficiency implications, a number of organizations issued their support. In addition to some of the leading drug manufacturers and purchasers, and professional and trade associations, the U.S. Department of Defense, Wal-Mart and Target are among those mandating tagged pallets and cases.

Two new market reports predict RFID will be big business in healthcare.

For example, Chicago-based Fast Track Technologies Ltd. and American RFID Solutions issued in late April "RFID & Emerging Technologies Guide to Healthcare." The study predicts that RFID and its related technologies will "skyrocket to $8.8 billion by 2010," with hardware and software integration accounting for $1.3 billion of that sales total, infrastructure support for RFID enablement accounting for $2.7 billion (split nearly evenly between wireless networks and enterprise-related software) and hospital connectivity $4.8 billion. Hospitals will use RFID to track assets, hazardous materials, instruments and patients, the report projects.

Meanwhile, IDTechEx offers a more conservative forecast that quickly turns optimistic. In "RFID Forecasts, Players and Opportunities 2005-2015," IDTechEx predicts that the total global RFID market worth (not limited to healthcare) will reach nearly $7.3 billion in 2008, up from more than $1.9 billion by the end of 2005. By 2015, however, the total market for RFID tags, systems and services used typically on pallets and cases will soar to $26.9 billion. East Asia will account for 48 percent of RFID tag sales by 2010, followed by North America at 32 percent.

Initially driven by military forces and retail organizations to cut costs and improve service, RFID will expand its reach into item-level consumer goods, drugs and postal packages for cost savings, customer service improvements, increased sales, improved safety and reduced crime. IDTechEx explores active vs. passive and semi-passive chips, labels vs. non-labels, Electronic Product Code (EPC) vs. non-EPC chips, chip vs. chipless tags (no silicon chip included), as well as smart tickets or cards, smart packaging and printed electronics.

Last fall, the Healthcare Distribution Management Association (Reston, VA), in conjunction with A.T. Kearney, issued a report through its healthcare foundation that examined the costs and benefits of adopting RFID technology using the EPC product identification standard formats on pallets, cases and even item levels. HDMA’s report, "Adopting EPC in Healthcare: Costs and Benefits," highlighted that drug manufacturers can generate between $500 million and $1 billion annually in economic benefits and distributors between $200 million and $400 million annually, due to counterfeit prevention, inventory management efficiency and improved supply chain integrity and financial accuracy, including claims and deductions.

Where to start?
Neumann cautions against rolling out a massive RFID implementation and deployment project, anticipating quick results, in favor of a simpler, smaller approach in stages. "Hospitals should pilot something that involves a discreet application of RFID tags and scanners." Some suggestions include drug cabinets or blood bank or a selected supply area. Then they should probably set up a larger and broader application, tagging pallets and cases at the warehouse or loading dock. The final stage should involve breaking down bulk and tagging products at the item level.

"People should walk before they run," Neumann said. "I get nervous when people go to Buck Rogers without demonstrating success leading up to the higher-end technology." Still, despite the larger investment, he contends that RFID adoption may be easier and certainly more cost-effective in the long run than bar coding adoption because of reduced errors and mistakes and reduced pressure on labor. "You’re leveraging all the highly educated people who support the doctors and allowing the technology to absorb the routine and repetitive tasks," he said. "With every new application the investment goes down while the benefits go up."

Neumann advocates trying out RFID in the blood bank, which he characterizes as a well-defined environment with very specific challenges – matching and typing blood. "You don’t have to worry about dealing with thousands of drugs," he said. "The application is reasonably constrained." One benefit is that this area then extends beyond the hospital to multiple facilities and services.

Then he recommends hospitals start tagging patients, followed by drugs, supplies, implants and equipment. Why are supplies last on healthcare’s list when the manufacturing and retail industries started there? "Hospitals need greater interaction with their suppliers to make that happen," he said. "It may be more straightforward to start with supplies but that involves more parties to establish the closed loop process needed for it to work." Starting with key suppliers may be a wise move, he noted.

Neumann conceded he would move equipment up higher in the priority list because it’s well-defined, may be the easiest to accomplish and doesn’t necessarily involve patient safety so it’s more of a low-risk situation. "We’ve seen mixed results with bar coding of assets," he added.

"Until hospitals are comfortable with the cost of RF scanners, their decision will be based on the numbers they need to purchase for each application," Kilzer said. One application he favors is the use of RFID wrist bands on patients vs. bar-coded wrist bands. "However, hospitals will be reluctant to replace hundreds of their current scanners until they are ready to upgrade, or until the cost of RF scanners reaches a point they feel comfortable making this investment," he added. The number of tags needed also influences the decision, as well as the environment in which the tags will be used. For example, can the tags withstand being autoclaved? How long will it continue to work under such high-temperature or high-pressure circumstances? 

That’s why Kilzer favors bar codes as the best solution if a hospital is ready to implement an auto ID technology. "RFID holds great promise in tracking supplies and medications. However, these are areas that will require high volumes of RF chips and will be costly to implement when compared to the current costs for bar codes," he continued. "At such time as RFID chips are competitive with linear bar codes the industry will need to sort out which applications are best suited for bar codes, whether these are linear or two-dimensional, or whether RFID is the best solution. Technology [choices] should be driven by the applications you are trying to address."

Neumann concurred. "There may be applications where bar coding makes more sense because RFID will only generate marginal improvement so why screw with the system?" he said. Most likely, both technologies will co-exist, he added.

"The real solution is a mixed blend of all auto ID data collection technologies, including 1-D and 2-D bar codes, RFID and real-time locating systems," Flynn said. "That’s the way it is in other industries. They all can deliver patient safety and ultimately link back into the supply chain."

Murphy noted that hospitals can generate tremendous benefits from using bar coding and that they should look at RFID for selected niche applications. Blood bank is one area. Specialized applications in labor and delivery are another, such as linking mother to baby to thwart criminal activity or tracking a mother’s stored breast milk.

But bar codes may always have a place, according to Dysko, particularly in the area of patient admissions on forms, reports and in diagnostic areas.

"Although the applications where RFID will work are unlimited, it remains to be seen how well and how quickly the industry embraces this technology over the current linear or two-dimensional bar codes," Kilzer said. "What’s great about the two technologies is that we can implement bar codes and easily migrate to RFID using a majority of the technology already in place." HPN