Terri Simpson Tucker of Kaiser Permanent presents how to build a business case for RTLS in hospitals. Presented at RFID Journal Live in April 2010

2. Building A Business Case for RFID
From the Basement to the C-Suite
Terri Simpson-Tucker, RN, MSN
Assistant Administrator
Kaiser Permanente San Jose Medical Center
April 16, 2010

3. AGENDA
1. Organizational Background
2. Scope of RFID Project
3. Rationale for RFID
4. Developing Political & Financial Support
5. Business Case Development
• Assumptions
• Value Analysis
• Hard & Soft Savings
6. Financial Funding Strategies
7. Our Experience
8. Questions & Answers

4. • The nation’s largest non-profit Health
Maintenance organization (HMO)
• Headquartered in Oakland, California
• Integrated pre-payment system
• Focus on Wellness & Prevention
• System-wide Electronic Medical Record
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5. MISSION
To provide affordable, high-quality
health care services that improve the
health of our members and the
communities we serve.
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6. San Jose Medical Center
• 242 licensed bed acute care hospital
• Free-standing ASU
• 16 Medical Office Buildings
• 35,000 annual outpatient visits
• 2,225 Total Live Births
• De-centralized campus comprised of:
• 34 buildings
• 1,388,376 gross square feet
• 37.6 acres
• Built 1973, seismic retrofit to stay standing until 2030
• Centrally located in “Silicon Valley”
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7. SCOPE OF RFID PROJECT
Kaiser Permanente San Jose
• 660,000 square feet of coverage
• Across 10 buildings
• 35 floors
• Over 4,200 items tracked on RFID sensor network
• Implementation represents an increased oversight of
$6.5M of hospital assets
• Temperature monitoring for 120+ medication and
food refrigerators & warmers
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8. WHY RFID?
TIMELY EFFICIENT EFFECTIVE
As a not-for-profit organization Kaiser
Permanente has the corporate
responsibility to provide the best
investment for our member’s monies.
Providing appropriate oversight for asset
management is a key factor of this
obligation.
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9. INVE$T TO $AVE
RFID
$500,000 Capital Investment
– 100% Funded
– 100% Purchased
– 100% Implemented
– 100% Supported by Senior Leadership
– 100% Supported by Corporate Executives
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10. C-SUITE
• Chief Executive Officer
• Chief Operating Officer
• Chief Financial Officer
• Chief Nursing Officer
• Chief of Quality/Risk
What is in it for them?
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11. DIRECTORS & MANAGERS
• Nursing • Operating Room
• Pharmacy • Recovery Room
• Radiology • Support Services
– Engineering
• Laboratory
– Clinical Technology
• Information Technology
– EVS
• Security – Material Management
• Emergency Department • Safety Officer
What is in it for them?
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12. THE FRONT LINE
• Nurses
• Physicians
• Physical Therapists
• Respiratory Therapists
• Transporters
• Lift Techs
• Biomedical Engineers
• Engineer
What is in it for them?
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13. RESEARCH
“A 36-Hospital Time and Motion Study:
How Do Medical-Surgical Nurses Spend Their Time?”
FINDINGS
• Nurses travel between 1 to 5 miles per 10-hour shift with a median of 3 miles.
• Nurses spend more than ¾ of their time devoted to nursing practice.
– Care Coordination (communication between caregivers account for 1/5 of
nursing practice time).
– Inefficiencies in communication consume nurses’ time and put patients at
risk.
– Many failure-to-rescue situations can be traced back to communication
delays.
• Of all reported time, 6.6% was categorized as waste. Activities within this
category, many of which were “hunting and gathering” behaviors, are clearly
targets for improving efficiency.
The Permanente Journal/Summer 2008
Volume 12, No. 3
Hendrich, Chow, Skierczynski & Lu
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14. RESEARCH
“A 36-Hospital Time and Motion Study:
How Do Medical-Surgical Nurses Spend Their Time?”
CONCLUSIONS & RECOMMENDATIONS
• Use of intelligent systems that automatically track the physical location of medical
providers can minimize waste and improve patient outcomes.
• A holistic approach is needed whereby people, process, and technology come together
harmoniously in a physical space to produce the maximum medical-surgical unit
efficiency.
• Minimizing hunting and gathering activities will minimize waste and leave nurses more
time to spend with patients in direct care activities which correlates with improved
patient outcomes and a safer care environment.
The Permanente Journal/Summer 2008
Volume 12, No. 3
Hendrich, Chow, Skierczynski & Lu
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15. MUDA
Traditional Japanese term for an activity that is wasteful and
doesn’t add value or is unproductive. Key concept in Toyota
Production. Waste reduction is an effective way to increase
profitability. Key concept in Lean Principles and Performance
Improvement initiative recommended by the IHI (Institute for
Healthcare Improvement).
7 Categories of Waste
• Overproduction
• Unnecessary Transportation
• Inventory
• Motion
• Defects
• Over-Processing
• Waiting
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16. UNDERSTANDING
“Seek first to understand, then to be understood.”
• Understand the Problems & Needs of your Organization
– DATA
• Understand the Available Technology
• Understand the Funding Options and Sources
• Understand existing or proposed systems & the environment
– Limitations?
– Infrastructure
– Leverage
• Understand installation requirements
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17. WHY RFID?
TIMELY EFFICIENT EFFECTIVE
By being able to appropriately track utilization of equipment, RFID will provide Kaiser
Permanente San Jose the ability to increase oversight of $6.5M worth of hospital
owned equipment and maximize financial investments by:
• Reducing Rental Equipment Costs
• Improved management of specialty owned sleep surfaces
• Reducing “hunting & gathering” function for nurses & ancillary staff (improves staff
productivity)
• Providing utilization information to guide capital equipment purchases. (Data driven
purchases
– Maximize available space
• Providing a safer environment to provide care by ensuring that WPS equipment is
readily available at the time of risk based activities.
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18. WHY RFID?
TIMELY EFFICIENT EFFECTIVE
• Providing a safer environment to receive care by ensuring that:
– Equipment can be located at the time care has been ordered
• Decrease time from order to treatment
– Equipment can be located at the time preventative maintenance is due or
recall notification
– Rental & purchased equipment is checked by CT prior to entering the
equipment stream.
• Equipment availability supports key organizational imperatives: ED
throughput, 11:00am discharges, (improved patient flow) sepsis, LOS,
WPS, Survey Readiness, Reduces waiting times for admits, discharges &
transfers, OR op-time, ETC.
• Theft deterrence
• Management of high-cost/low-turnover supplies (unit of issue: case)
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19. 3-Year Asset Validation Process
…………………2007 Equipment Inventory
Fixed Assets Booked to Area 1,609 $ 44,612,331,01 $ 17,634,103.94
Reconciled Assets 1,307 $ 35,445,924,37 $ 17,421,619.02
Unreconciled Assets 302 $ 9,166,406.64 $ 212,484.92
Unreconciled Assets
NBV > $0 55 $ 668,907.57 $ 212,484.92
NBV = $0 247 $ 8,497,499.07 0
302 $ 9,166,406.64 $ 212,484.92
Less: $0 NBV Assets (Active in Biomed) 51 $ 2,033,493.39 -
TOTAL ASSETS 251 $ 7,132,913.25 $ 212,484.92
WRITTEN OFF IN 2007
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20. MULTI-DISCILINARY TEAM
• Administration • IT
• Clinical Technology • Respiratory Therapy
• Central Equipment • TPMG
Distribution • Security
• Nursing • Finance
• Materials Management • Pharmacy
• Engineering
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21. ASSUMPTIONS
• 10% reduction in Specialty Bed rental cost
• 15% reduction in Baxter Pumps rental cost
• 15% reduction in Enteral Feeding Pump
rental cost
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22. ASSUMPTIONS
• 80% reduction of lost, stolen and misplaced equipment
Currently, the replacement over 3 years is:
– 5% for the following: Bili Lights, Accumax Pumps, Aspirators, Fetal
Monitors, Scales, Therapy Vest Device, Ventilators, Bair Huggers,
Spectralink Phones and Transport Monitors
– 10% for the following: BiPAPs, CPAPs, CPM Machines, Defibrillators,
Edwards Monitors, Enteral Feeding Pumps, Gurneys, Humidifiers,
Monitor Pagers, Multi Measurement Servers (MMS), PCA Pumps,
PCEA Pumps, Pulse Oxymeters, Telemetry Boxes, Telemon Monitors,
Thermometers, Ultrasound Machines, Walkers, Wheelchairs, Blood
Pressure , Dopplers, Dynamaps ,EKG Machines, Flowtron
Compression Devices, Dialysis Machines, Ultrasound and Wound
Care Carts
– 20% for the BiPAP Units
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23. ASSUMPTIONS
• Increased utilization of equipment:
– 5% spread over a useful life of 10 years for the following: Bili Lights,
BiPAPs, and ICU Beds
– 10% spread over a useful life of 10 years for the following: Accumax
Pumps, Aspirators, Baxter Pumps, Specialty Beds, CPAPs, CPM
Machines, Defibrillators, Edwards Monitors, Enteral Pumps, Fetal
Monitors, Gurneys, Humidifiers, Isolation Carts, Monitor Pagers,
MMS, PCA Pumps, PCEA Pumps, Scales, Tele Boxes, Telemon
Monitors, Therapy Vests, Ultrasound Machines, Ventilators,
Walkers, Wheelchairs
– 20% spread over a useful life of 10 years for the following: Bair
Hugger, Blood Pressure Machines, Dopplers, Dynamaps, EKG
Machines and Flowtron Compression Devices
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24. EQUIPMENT SAVINGS
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25. VALUE ANALYSIS
Hard Savings
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26. COST SAVINGS
Soft Returns
1. Improved Customer Satisfaction
2. Improved Compliance with Updates, Preventative
Maintenance and Recalls
5. Enhanced Patient Transport
6. Increased Patient Safety
7. Increased Staff Safety
8. Improved Productivity & Job Satisfaction
9. Improved staff efficiency
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27. FINANCIAL FUNDING
STRATEGIES
• Lease
• Rent to Own SCALABILITY
• Full Purchase
• Capital Equipment Purchase
• Capital Construction Project
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28. NCAL ENTERPRISE STANDARD
• Active RFID System
• Room location accuracy
• Ease of installation (plug & play into electrical outlets, no hardwiring)
• Vendor support
– 24/7 support, minimal IT support
• 100% wireless self-healing mesh network
– ZigBee Based Technology
• Customizable Alerts & Reports
– Notification rules can be customized to workflow (e.g., indications that maintenance, repair or sanitization is
needed; temperature out of range)
– Rental days, needs maintenance, expiration pending, etc
• Applicability/Usage
– Sterilizable Tags, Temperature & humidity monitoring, elopement patients
– 5 Year Battery Life
– Can be cleaned with a hospital-grade disinfectant
– Sensor to alert when equipment is in motion
– Detects when Tag has been removed from an asset & transmits an alert.
• No Seat Licenses required
• No Frequency Interference with existing wireless system and technologies
• RFID System may be accessed from any hospital based computer or hand-held device.
• Web-based application
– Intuitive usage, minimal training for users required.
– Displays equipment location on a floor map or in a table.
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29. INITIAL RESULTS
One Month Post Implementation
• Biomedical Engineering
• Pharmacy
• Sterile Processing
• Nursing
• Physical Therapy
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30. NEXT STEPS
Local
– RFID Steering Committee
– Calculate ROI
– 3 yr asset validation (establish new baseline)
– Measure effectiveness: Metric Development
• Assess, alter, adapt & adopt
– Collect stories: care & caring experiences
NCAL Enterprise Wide
– Spread Practice
• Umbrella Contract  addendum agreements
– Leverage implementation, information & learnings
– Enterprise wide visibility to asset availability and usage to guide
purchases & maximize usage of current assets across enterprise
– Presentation NCAL CFOs & Property Accounting
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31. If you can’t find it:
– You can’t use it
– You can’t clean it
– You can’t maintain it
– You can’t fix it
– You have to go look for it
– You have to stop what you are doing
– You can’t care for your patients
– You can’t do your primary job
– You are wasting time
– You are wasting money
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32. RFID
• RIGHT EQUIPMENT
• RIGHT PLACE
• RIGHT TIME
• RIGHT PATIENT
RIGHT THING TO DO!
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33. CONTACT INFORMATION
Terri Simpson-Tucker, RN, MSN
Assistant Administrator
Kaiser Permanente San Jose Medical Center
255 International Circle
San Jose, CA 95119
Terri.Simpson-Tucker@kp.org