RFID In Health Care In 2005 by Jim Bloedau

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A retrospective view of early trends and concerns about RFID in healthcare. Contact Information Advantage Group www.iag.co 2005

A retrospective view of early trends and concerns about RFID in healthcare. Contact Information Advantage Group www.iag.co 2005

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  • 1. RFID in Health Care An Executive Briefing for Your Company Go To www.iagllc.biz (This copy for promotional purposes only)
  • 2. Objectives
    • What Is RFID?
    • Current Trends
    • Strongest Drivers
    • Shared, Technical & Enterprise Concerns
    • Legal Concerns
    • Costs
    • ROI
    • Building Business Case
    • A Word About Vendors
    • Developing Strategy
  • 3. What Is RFID
    • What Is RFID ?
    • Radio Frequency IDentification
  • 4. What Is RFID ?
    • RFID is another form of automatic identification and data collection (AIDC) technology.
    • Included in this “Auto-ID” grouping are:
      • bar codes
      • magnetic stripe cards
      • optical character recognition (OCR)
      • biometrics
  • 5. Tags
    • Passive Tag
      • No power source
      • Unlimited life span
      • 3 - 10 feet
      • Cheap / many applications
    • Semi-Passive Tag
      • Power source
      • More data Storage
      • A bit more range
    • Active Tag
      • Internal power
      • Continuous transmission
      • 3-5 years power life
      • Read/Write
      • 300 feet indoors; 1000 feet outdoors
      • Large data storage
  • 6. RFID - Healthcare Frequencies Worldwide: 8 common RFID Frequencies 10 KHz 100 KHz 1 MHz 10 MHz 100 MHz 1000 MHz 300 GHz Low Freq. EAS Mid. Freq. EAS Cell Phone RFID : Item/Asset Data Modem AM Radio Toys Garage Door CB FM RFID : Security I.D. Access Control RFID : Asset & Item Microwave EAS TV Data Terminal RFID & I.C. Cards 2.45 GHz 125/133 KHz 13.56 MHz 868-915 MHz 2.45 GHz Cordless Phone
  • 7. Readers
    • “ Talks” to RFID TAG
      • Pulses or continuous transmission
        • Reading stored data
        • Updating
        • Task specific application.
    • Hand-held
    • Mounted in arrays
  • 8. System
    • System software collects data from the reader system and applies tools to make it into useable information.
  • 9. Bar Code vs RFID
    • No line of sight required
    • Simultaneous reads
    • 30x more data storage
    • Read - Write
    • Hard to copy
    • Reprogrammable
    • Track for life
    • encryption
    • Low Cost ($.003)
    • Widespread utilization
    • Mature
    • Visual label backup
    • Line of sight required/single read
    • Subject to simple damage
    • Not a tracking device
    • Easily replicated
    • Small storage (44bit)
    Bar Code
    • Costs - dropping rapidly
    • Maturing rapidly
    • Subject to environment, at times
    • Scalability questions
    RFID GOOD BAD
  • 10. History
    • History
  • 11. History
    • 1940s - British used during World War II to differentiate returning English airplanes from inbound German ones.
    • 1960s RFID tag developed - essentially a microchip.
      • Until the late 1990s it was essentially a technology waiting for an infrastructure.
    • 1999 - Massachusetts Institute of Technology Auto-ID Center in 1999 began promoting RFID as a replacement for the common bar code.
  • 12. Recent History
    • 2003 - 10 percent of Global 2000 had engaged in early RFID pilots.
      • 50% written off
      • Rest yielded indifferent results.
    • 2003-04: “Wal-Mart Effect”
      • Mandates: Wal-Mart, Target, DOD
      • Promise to save $8 billion by 2006
    • Early Results 2004
      • 8% of 50 companies polled in 2004 claimed to be very or somewhat satisfied with their RFID programs.
      • 20% said they were somewhat or completely dissatisfied.
      • Viewed as “…a revolutionary technology … important to their organization’s business strategy.”
      • 50% of 30 manufacturers - "expect high returns on RFID investments.“
  • 13. 2005 Trends
    • Early Trends
  • 14. Early Trends
    • Most Fortune 100 targeted high impact - logistics and distribution
  • 15. Early Trends
    • Most Fortune 100 targeted high impact - logistics and distribution
      • Down to pallets and boxes
      • Item level RFID still nascent
  • 16. Early Trends
    • Non-healthcare industries were aggressively executing trials and roll-outs:
  • 17. Early Trends
    • Non-healthcare industries were aggressively executing trials and roll-outs:
      • A majority (69%) are currently in the discovery stage.
        • 58% - trial/test stage mid 2005.
        • 46% - pilot by mid 2005.
        • 51% - projects fully deployed by June, 2006.
      • Short Term:
      • Companies planned on deploying real-time location systems, supply chain, and asset management applications.
      • Long Term:
      • Beyond 12 months, companies planned to use RFID for smart shelving in pharmaceutical and retail, and mobile-commerce.
  • 18. Early Trends
    • Investment in RFID was centered on developing infrastructure:
  • 19. Early Trends
    • Investment in RFID is centered on developing infrastructure:
      • RFID budgets averaged over $500K in 2005
        • Mainstream adoption thought to begin in 2008.
      • RFID investments will be spread fairly evenly on:
        • Hardware
        • Development
        • Infrastructure
        • Integration
      • Beyond 2005:
        • Companies will allocate slightly more of their RFID investment toward hardware and development.
  • 20. Early Trends
    • A major shift toward enterprise RFID computing began in 2005.
  • 21. Early Trends
    • A major shift toward enterprise RFID computing began in 2005.
    • Until the beginning of 2005:
      • Most vendors niche or large electronics manufactures filling a niche.
    • Spring 2005: The “IBM Effect”
      • Business-intelligence
      • Analytics
      • Data-warehouse
  • 22. Early Trends
    • Middelware
      • Business-intelligence/analytics/data-warehouse markets have either released or are about to release software packages that will help companies cope with all this RFID data
  • 23. Early Trends
    • Costs are expected to come down fast.
      • Estimates were that tag purchases will grow from 323 million units in 2002 to 1.62 billion in 2008.
      • This predicted growth had RFID manufacturers accelerating their production efforts to drive down tag and reader costs.
      • The most frequently used passive tags were approaching the $.10 goal.
  • 24. Early Trends
      • The 100 Most Wired Hospitals are renewing their emphasis on managerial systems that support financial, human resources and materials management functions.
        • The data show a reversal of a one-year decline in growth in management systems.
      • IT-powered automated supply chain management tools, such as point-of-use supply systems:
        • Minimize stock shortages .
        • Reduce inventory costs
        • Pass expiration dates before being used.
  • 25. Early Trends
    • Founding bar code companies were offering RFID:
      • A vendor (50 yrs.) providing bar code products to hospitals since 1988.
        • RFID wristbands in 2000
    • Convergence & Modularization:
      • A vendor has merged three new asset and patient tracking products with their RFID Inventory System.
    • Outsourcing:
      • Handle the management, archiving, filtering, and integration of RFID data, are emerging.
        • Similar to catalog data or electronic data interchange (EDI).
  • 26. Drivers
    • Healthcare
    • RFID Drivers
  • 27. Drivers
    • Benefits of real-time efficiencies are driving expectations.
  • 28. Early Drivers
    • Benefits of real-time efficiencies are driving expectations:
          • Business Drivers :
            • Reduction of labor costs
            • More efficient business processes
            • Tighter connection with business partners and suppliers.
          • Technology Drivers:
            • Improve accuracy of data
            • Increase automation
            • Provide real-time inventory capabilities
  • 29. Early Drivers
    • “ The FDA Effect”
      • Up to 7% or more of all drugs in the international supply chain may be counterfeit.
        • In some countries, it may be 25% to 40%.
      • $2 billion in product returns each year caused by overstocked or outdated products.
      • 1,300 recalls in 2001 alone.
      • February, 2004 a final rule requiring bar codes on hospital-administered drugs, biological, and blood products . (FDA 21 CFR Parts 201, 606, and 610)
      • Later, ambitious timeline for drug manufacturers and distributors to test RFID
        • “… the most promising approach for reliably tracking, tracing, and authenticating pharmaceutical products.”
      • Recommending widespread use of RFID in pharmaceutical supply chain at the item level by 2007.
  • 30. Early HC Drivers
    • JCAHO
      • April, 2004 proposed hospitals use bar codes for medication management at the bedside by 2007.
      • “ Shared Visions–New Pathways” - to remain an accredited healthcare facility, must show high priority for life support equipment.
  • 31. Early HC Drivers
    • Mandated Tracking and Reporting:
      • Healthcare industry is constantly moving toward uniformity of reporting:
        • HIPAA, Sarbanes-Oxley, OSHA
        • Tracking and safety approval (FDA, 21CFR Part 11 compliance)
        • Labeling compliance: Health Industry Bar Code (HIBC)
        • Health Industry Distributors Association (HIDA)
        • Good Manufacturing Practice Regulations (GMP)
        • International Organization for Standards (ISO 900 requirements).
    • The same plumbing that will share RFID data across the business chain can also support future reporting and compliance projects.
    • Standards creation activities shows industry’s commitment to meeting the challenge.
  • 32. Shared Concerns
    • Shared Concerns
  • 33. Shared Concerns
    • More than 50% of interviewed experts named funding, costs, immature technology and workflow integration as major barriers.
    • - Costs included the price of RFID tags, readers and applications, as well as the wireless infrastructure and systems rework and integration.
    • - Reluctance to invest in a technology not yet widely adopted.
  • 34. Technical Concerns
    • Technical Concerns
  • 35. Technical Concerns
    • 46% - Integration/installation
    • 43% - cost of tags and readers
    • 38% - obsolescence as standards/application evolve
    • 21% - Tags
    • 18% - Software
    • 12% - Database-driven hardware
    • 2 - Readers
  • 36. Technical Concerns
    • Network infrastructure was the most commonly named barrier to deployment.
        • 92% of the 100 hospital repondents
    • HCOs want to be able to use existing wireless networks rather than a dedicated RFID network for tracking.
      • That makes the network more valuable, but also more susceptible.
        • HCOs worry that tracking thousands of items could overwhelm the network. That could mean that clinicians are unable to access or enter patient data.
  • 37. Technical Concerns
    • Reliability
      • Field Nulls – “holes in the field”
        • HF – “Tight Fishnet”
          • Better for liquids
          • 96 bits up to 8 K
        • UHF – “Swiss cheese”
          • Low storage capacity
      • Liquids and Metals
        • HF signals are better able to penetrate water and other liquids because the longer wavelengths - less susceptible to absorption
  • 38. Technical Concerns
    • Infrastructure – Scalability and Operational Support
      • Network and End-User Device Management
      • Sensor Management (a new category for many IT organizations)
      • Data Management
      • System Integration
  • 39. Industry Standards
    • EPC Global - A joint venture between The Uniform Code Council and EAN International, the two main bodies responsible for overseeing bar code standards.
      • Tag protocol is a simple, license plate that uniquely identifies objects (items, cases, pallets, locations, etc.) in the supply chain.
      • The latest release; EPC Generation 2 standard.
      • Working to create data capabilities for the 96-bit EPC tags.
      • Development of existing EPC standards for high frequency 4 Item-Level Visibility in the Pharmaceutical Supply Chain.
      • Supports the Global Trade Item Number (GTIN)
    • Healthcare Distribution Management Association
      • Recommended that manufacturers and wholesalers of pharmaceutical drugs and other health care products begin putting RFID tags carrying EPCs on cases
  • 40. Technical Concerns
    • Enterprise & Human Resource
    • Concerns
  • 41. Enterprise Human Resource Concerns
    • Data Flood:
      • What are you going to do with all that data?
    • Data Ownership:
      • One of the burning questions across the supply chain will be: who owns or manages the data?
        • What roles should the product manufacturers, wireless companies, or application service providers play?
    • Data Privacy:
      • As data becomes shared; How will it be managed?
  • 42. Enterprise Human Resource Concerns
    • Legal issues revolve around privacy:
      • Employee Monitoring
      • Consumer perceptions
  • 43. Enterprise Human Resource Concerns
    • Legal issues revolve around privacy:
      • Employee Monitoring
    • Employee monitoring :
      • "A unionized employer has a legal obligation to discuss with unions changes in working conditions."
      • - Lewis Maltby, President of the National Workrights Institute.
      • Union contracts often include clauses that trigger new negotiations when companies make significant changes to the work environment.
        • GPS, video monitoring, and RFID can be significant changes.
      • Only 1 of 23 agencies polled by the GAO had identified any legal or privacy issues.
        • 3 admitted RFID would let them track employee movements.
  • 44. Enterprise Human Resource Concerns
    • Consumer Perception - potentially the most troublesome.
      • Some privacy advocates warn that RFID tags could be scanned from outside a consumer's home.
        • More than 30 privacy groups have come out against RFID.
      • States have proposed legislation that would restrict the use of RFID include California and Utah.
        • May, 2005: California's Senate approved a ban on the use of RFID tags in driver's licenses and other state-issued forms of identification.
  • 45. Enterprise Human Resource Concerns
    • Security
      • RFID IS NOT GPS (Global Positioning System)
        • Limited read zones.
      • Most RFID chips today use technology - allows data to be permanently removed.
      • Disabling feature or kill command has been specified by EPCglobal.
        • Embedded in all EPC standards-based products.
  • 46.
    • Encryption Standards:
      • Encryption methods can be embedded onto the tag to ensure “eyes only”
      • Encryption specifications for tags being developed by standards organizations.
        • Standard security encryption algorithms for automatic fare collection done.
    • Production of the 128-bit RFID chips
    Enterprise Human Resource Concerns
  • 47. Costs
    • Costs
  • 48. Tag Costs
    • Passive Tags :
      • $.28 to $1
      • Acceptable Costs:
        • 40% stated less than $.05 was an acceptable cost.
        • 22% said between $.06 and $.10 was acceptable .
    • Semi Passive Tags :
      • $6 to $50 per tag.
    • Active Tags :
      • $4 to $100+
      • Acceptable Costs:
        • 28% of respondents stated less than one dollar.
        • 17% said between $1.00 and $2.50.
  • 49. Reader Costs
    • $1,500 and $3,000 currently.
      • Low-end price points for hand-held bar code readers are in the $300 to $400 range
      • Acceptable cost :
        • 33% stated less than $250 while 23 percent said between $250 and $1,000.
  • 50. System Costs
    • Generally, the cost of an RFID system can run anywhere from $20,000 to more than $1 million depending on the area to be covered and application.
  • 51. System Costs
    • A pilot program in a large, undisclosed Chicago healthcare facility found a minimum application development kit, which includes the software license and eight user profiles, and one reader and tag set, started at $15,000
  • 52. System Costs
    • On the low end of the cost spectrum, a $20,000 system could help a hospital monitor and control patient movement in a small inpatient area.
      • This system might include a couple of automated door locking mechanisms and antennae in the ceiling to track the tags worn by patients.
  • 53. System Costs
    • A six-month, $500,000 RFID demonstration project at Vanderbilt Children's Hospital in Nashville, Tenn. helped the pediatric critical care unit solve why only 50 percent of the floor's assets were actually on the floor at any given time.
  • 54. System Costs
    • In the past, expensive infrastructure that included specialty cabling with highly precise receivers and I.D. tags made it not so uncommon for a 200-bed hospital to be looking at a price tag of $1 million or even more.
      • Today, a hospital is going to be looking at between $200,000 and $300,000 depending on the deployment’s structure.
  • 55. System Costs
    • Bon Secours Richmond Health System, a three-hospital system in Virginia with a fourth hospital under construction, recently inked a $3.9 million deal for an RFID asset management system that tracks, manages, and measures the utilization of 10,000 pieces of medical equipment
  • 56.
    • ROI
  • 57. ROI
    • The overwhelming majority of non-healthcare companies cites significant challenges finding the return on investment (ROI) to justify their RFID spending.
      • 28% cite it specifically as their biggest obstacle with regard to RFID adoption
  • 58. ROI
    • RFID – Hospital First Efforts:
      • Hospitals are utilizing RFID for equipment management first to get the confidence and experience to do patient management later.
        • It's easier to begin by managing 100 known items rather than 200,000 patients a year.
  • 59. ROI –Asset Management
    • Research shows that hospitals lose 5 percent to 15 percent of their equipment inventory annually.
      • Losses may be as much as $4,000 per bed – this doubles when misplaced and inefficiently used equipment is factored in.
          • One hospital lost $250,000 worth of defibrillators in a year.
          • Another was losing $8,000 worth of cardiac equipment monthly.
  • 60. ROI - Asset Management
    • Bon Secours Hospital:
      • Lost time per shift looking for equipment:
        • Employees spent up to 25% to 33%
        • Nurses 15 to 20 minutes
    • Post RFID: Savings of more than $200,000 in 2004 alone were expected.
      • The bulk of the projected savings came from not having to replace equipment hiding in a corner.
  • 61. ROI - R ental Costs
    • Most hospitals spend as much as $50,000 a month in unnecessary rental costs due to misplaced and lost rental equipment.
      • At Vanderbilt, hospital employees often swapped cables from one piece of equipment to use with another in a different unit.
        • Typically, the cables were never returned, and replacing the cables cost the hospital between $3,000 and $6,000 a month.
        • ROI pending, but positive.
  • 62. ROI - Patient Tracking
    • By law, patients who posed a danger to themselves or others, must be evaluated because they may be violent, depressed and suicidal.
  • 63. ROI - Patient Tracking
    • Mercy Hospital, Coon Rapids, MN:
      • In 2004, Mercy Hospital the first hospital in the nation to employ radio frequency ID (RFID) wrist bands to track emergency room patients.
      • The radio frequency E.R. system cost $25,000 to $175,000; 2,100 emergency room patients.
        • 60% reduction in security guard and nurse "one-on-ones.”
        • Security guard costs alone were reduced by an estimated $110,000.
  • 64. ROI - Staff & Patient Tracking
    • Hannibal Regional Hospital Hannibal Hospital, a 91-bed facility.
      • Using patient and staff badges with embedded RFID chips learned:
        • 20% of outpatient treatment was being handled after hours
        • Some physicians were not using 50% of their time.
    • 12 month ROI is expected through reduced overtime costs, increased efficiencies from block scheduling and better inventory control.
  • 65. ROI Supply Chain – Inventory Visibility
    • The total supply chain represents 35% to 45% of hospital’s total expense.
      • Of this, supplies and medical equipment represent 25%.
    • On average, hospitals carry 300% of required daily medical supplies.
    • A 200 bed hospital has on average has 37,000 medical supply items in stock on any given day.
    • Each bed in a hospital has on average 68 items associated with it.
      • 58 are reusable; 10 are permanent medical devices.
    • Pharmacy chains, hospitals, and HMOs hope to use RFID and the paperless audit trail it creates on boxes of drugs to aid in recalls.
  • 66. ROI Supply Chain – Inventory Visibility
    • The July, 2005 Most Wired data showed common supply chain tools among the nation's top tech organizations:
      • Automated purchasing at preset limits
      • Electronic systems that turn requisitions into purchase orders without re-keying
      • Bar-codes to track a wide range of materials and supplies.
  • 67. ROI Supply Chain
    • Uncoordinated efforts between hospitals, vendors, shippers and suppliers are keeping RFID out of hospitals . August, 2005
    • Manufacturers, suppliers and hospitals need different kinds of information.
      • Bar codes are used to support needs of vendors, not the needs of the hospital.
      • Hospitals don't use codes on shipped packages to distribute equipment and supplies across hospital departments.
  • 68. ROI Lessons
    • For healthcare, the common approach today keeps in mind that capital costs of building multiple wireless systems are too high without some strategic leveraging.
  • 69. ROI Lesson - Leverage Infrastructure
    • Beth Israel Deaconess Medical Center in Boston decided that the most compelling business case can be generated when you use the wireless LAN/Wi-Fi/IEEE 802.11 family of standards .
    • Simple test: “Does the RFID vendor require any additional hardware to be installed over and above using tags to make their solution work?"
  • 70. ROI Lesson - Asset Management
    • Using conservative figures, break even for implementing RFID tagging has been proposed for devices costing $47 and up - the average device value is $90 device.
    • The ROI on a RFID system in 12 to 18 months is common and in some cases, the annual ROI could be as high as 450% a year - just from equipment management.
    • Active RFID applications, which can be tracked on an RFID network, were much more popular than passive RFID networks, which require a nearby reader.
  • 71.
    • Building Business Cases
  • 72. Building Business Cases
    • Building a business case for RFID in healthcare centers on three points:
      • Increased efficiency through elimination of some human elements in processes.
      • Enhanced data capacity = greater functionality over bar codes.
      • Intangibles & soft dollars.
  • 73. Building Business Cases
    • Expense Management: Increase productivity by 2% and 8% through:
      • Inventory and supply chain visibility
      • Better charge capture
      • Staff productivity
      • Utilization of equipment
      • Security
  • 74. Building Business Cases
    • Operation Efficiency:
      • Increased labor efficiencies
      • Defined workflow
      • Automate manual actions
      • Improved sequence counts
  • 75. Building Business Cases
    • Workforce Impact:
      • Lower staff anxiety, turnover, hiring costs
        • Improve system efficiency.
        • Reduce forms processing time.
        • Improve tracking of labor and supplies.
        • Improve communications between doctors, nurses and patients.
  • 76. Building Business Cases
    • Patient Experience & Satisfaction
      • Early adopters of RFID discovered that time with patients increases.
      • More time spent with patients, the more you will see improved patient safety, clinical outcomes, and patient satisfaction .
      • Prevents data entry and collection errors.
      • Improves patient moving through system efficiency
      • Reduce forms processing time
      • Improve communications between doctors, nurses and patients
      • Crosses language barriers
  • 77. Building Business Cases
    • Risk Mitigation:
      • Monitor for equipment hazards & maintenance
      • Medical Errors: Transfusions, lab, patient falls, medication.
      • Counterfeit drugs, recalls & outdated stock
  • 78. Building Business Cases
    • RFID-enabled applications are going to open up all sorts of innovative applications.
      • Many of these are going to come to light after hospitals and companies have had a chance to gain some experience with RFID systems.
      • Most benefits for a health care provider and to the patient will come from process change - the technology is simply an enabler.
  • 79. Vendors
    • RFID is still in its formative years and will be hotly contested across all technology segments .
      • The worldwide RFID market (readers, active tags, passive tags, ICs, software, and services):
        • 2004 = $1.49 billion
        • 2008 = $4+ billion
        • 2010-2014 = $10 billion
  • 80. Developing Strategy
    • “ It's not the RFID technology that's important; it's the reengineering of business processes that will deliver value. Companies need to decompose their business processes and rebuild them to take advantage of the data that RFID generates.”
      • Mike O'Shea, Kimberly-Clark's Director of Corporate AutoID/RFID Strategies and Technology.
  • 81. Developing Strategy
    • There are no easy answers—and, in most cases, no "right" answers.
      • There are frameworks for thinking about how to manage risk more effectively and reach the right balance with potential return that will show benefits to managers, strategic planners, and C-level executives alike.
    • The key is, first, to examine your basic business process strategy to ensure you are following the course that best supports the business.
    • Second, to determine the right tactics to support your strategy.
    • This two-step process may sound simple enough, but to execute it correctly you must:
      • Have a firm grip on your company's core strategies.
      • Be willing to invest in new forms of internal analysis.
      • Be prepared to make decisions that might fly in the face of organizational precedent.