Lahey Clinic Reports Savings with RFID Asset Tracking

Lahey Clinic, an 83-year-old multi-specialty group practice in Burlington, Mass., expects to reduce costs substantially and help drive process quality improvements by using active Radio Frequency Identification (RFID) asset tracking technology.

Jeff Doran, Senior Vice President of Operations at Lahey Clinic, reported on the RFID project in a presentation during the American College of Healthcare Executives 2007 Congress on Healthcare Leadership. Over 4,000 leaders of healthcare organizations attended the Congress, held March 19-22 in New Orleans, LA.

Doran presented an analysis by clinic staff showing that using RFID to right-size asset inventory of infusion pumps and other critical devices would by itself save enough money to justify the investment. In the near future, the clinic plans to use the technology to help guide process changes that enhance staff efficiency and improve the quality of patients’ experiences.

For his presentation, “An Enterprise Strategy for Managing Cost and Efficiency with Radio Frequency Identification Asset Tracking Technology,” Doran teamed with Bret Barczak, a Director of Marketing with GE Healthcare, which supplied the clinic’s RFID tracking system.

Controlling expenses

Barczak explained that mobile healthcare equipment is a major expense, especially if poorly managed. Basic items like stretchers, wheelchairs and IV poles, and more costly devices like infusion pumps, monitors and scales, can add up to millions of dollars in concealed value.

A key to managing these assets, Barczak said, is knowing how to manage assets to maximize utilization to full capacity, while reducing unnecessary inventory. Today, radio frequency identification technology stands to help care providers track these assets, prevent losses, locate items easily, and keep device inventories at the optimum levels.

Presentation at 2007 ACHE Congress highlights cost reductions from improved asset and inventory management and prospects for enhanced patient care processes

“...using RFID to right-size asset inventory of infusion pumps and other critical devices would by itself save enough money to justify the investment.”

Containing costs: • Saved $270,000 immediately by tracking devices and right-sizing inventory

• Projected $76,000 savings from equipment losses and $31,000 from better transport processes

• Saved Annual planned maintenance by $45,000

Counting benefits:

• Tagged 3,500 items, with ability to find any item from any networked computer

• Optimized resources internally, saving man-hours to locate equipment

• Enhanced JCAHO compliance

Before deploying RFID, Lahey Clinic management performed an ROI analysis. It began with a hard-dollar assessment of equipment and assets, then looked at historic patterns of inventory, replacements and rentals, Doran said.

The analysis focused on chronically hard-to-locate items, including IV pumps, wheelchairs, stretchers and pulse oximeters. Staff then conservatively estimated how much the clinic could save by improving utilization (thus lowering rental and replacement costs) and by avoiding pilferage and losses.

“Pumps were our biggest frustration,” Doran said. “Nurses tended to hoard them, putting them in corners or in closets because they felt that was the only way to be sure of having them when needed.”

“At the time, we were making a transition to new IV smart pumps. That is a multi-million-dollar initiative, involving some 1,600 IV pumps and related devices. It was important to us not to over-buy or over-lease. We conservatively estimated that we could immediately save $270,00 by being able to track those devices and so right-size our inventory. That alone was enough to convince me that there would be a real, hard-dollar return on our investment in RFID tracking.”

The analysis also projected savings of $76,000 from equipment losses prevented and $31,000 from better transport processes.

Counting benefits

In 2006, the clinic deployed the RFID system at its two primary campuses and tagged 3,500 items. Staff now can log on to the intranet on any networked computer and find any tagged device. Device locations appear on-screen on floor-plan maps for easy locating. When a device is selected, a window shows what it is, who owns it, when it arrived, how long it has been there, and other relevant information.

The benefits of RFID tracking go far beyond hard cost savings. “Nursing and radiology staff can quickly locate IV pumps, portable X-ray units, patient scales, lifts, ventilators, and other items,” Doran said. “Wheelchairs and stretchers are always easy for escorts to find. Patients spend less time waiting. We’ve been able to eliminate at least one-half FTE for equipment locating.”

Biomedical service is more efficient because engineers can quickly find devices due for maintenance. More timely service enhances JCAHO compliance. “I know we have eliminated $45,000 right off the bat on annual planned maintenance and safety checks for IV pumps, because we have fewer of them than we would if we did not have RFID tracking,” Doran said.

Pushing the limits

Asset tracking may be just the first of many benefits from RFID. Lahey Clinic is planning a pilot test of RFID patient locating. “Our primary objective in that area is to understand how patients work their way through the care process and to see if there are opportunities to improve that experience, such as through faster room turnover and more efficient transfers between departments,” Doran said.

Already, RFID is helping to streamline the process for cleaning and sterilizing IV pumps. “At the moment, our central sterile processing people clean the pumps, move them to the various units, then retrieve them again,” Doran said.

“RFID showed us that 50 to 60 percent of the time, the pumps never made it back to central sterile processing. They were kept within the units, cleaned by nurses, and put back into play again. We had technicians going around trying to find these pumps.”

“We plan to change our process so that the pumps are cleaned properly as part of each room’s equipment. In that way, we will avoid the unproductive movement of people and equipment around the facilities. This process improvement might never have come to light without the hard data we collected through RFID technology.”

“Our experience shows that the benefits of RFID tracking are limited only by the imagination,” Doran said. “As healthcare executives, we are on a constant quest to drive down costs, improve operations, and enhance the quality of care. Here is a simple technology that can help us deliver measurable, meaningful results, immediately and in the longer term.”

imagination at work

“RFID is an enabling technology,” Barczak observed. “It is used widely in industries from distribution logistics to aerospace and defense asset management.” Each asset receives a tag with a small battery-powered transmitter that intermittently sends a signal. The signals are received by a system of antennas and conveyed to cell controllers linked to the computer network. Computer software then enables personnel to locate each tagged device instantly and access comprehensive information about it. “RFID can track biomedical devices; hardware items such as specialty beds, carts and stretchers; and other devices like laptops and monitors,” Barczak said. “Beyond asset tracking, it can be a valuable tool for personnel workflow studies, room and bed capacity management, and patient tracking.”

An advantage of the RFID application used at Lahey is that it does not compromise other wireless applications, Doran noted. “We have all seen the increase in wireless devices, including cell phones, PDAs and telemetry systems,” he said. “We don’t want to keep introducing more and more wireless activity if we don’t have to. Wi-Fi proliferation may pose a significant risk in healthcare. Our RFID tracking technology can piggyback on our current wireless network, yet it operates at frequencies below those that in time could become saturated with other applications.”

Containing costs

Lahey Clinic, an academic medical center with 450 affiliated doctors and 327 licensed beds, has two major campuses with a combined 1.2 million square feet. Staff uses thousands of mobile or portable devices, some of which are routinely transferred between the campuses, Doran said.

It became a major challenge to track these items, comply with their planned maintenance schedules, and simply locate them when needed. “We have a big place, and we actually had two FTEs whose job it was to look for and retrieve equipment,” Doran said. Clinic management also observed asset shrinkage, such as in lost or stolen wheelchairs and in telemetry monitors accidentally thrown into laundry.

“...We had technicians going around trying to find these pumps.”

“...we actually had two FTEs whose job it was to look for and retrieve equipment.”

SVD-0165-05.07-EN-US