-Joe Pleshek

There’s been a lot of focus lately on the consumer-facing benefits of RFID technology. Improved inventory visibility for retailers means that more products are on store shelves when consumers need them. That saves consumers time and money from searching several stores for your size garment. Aside from revolutionizing the retail inventory process and lessening out-of-stocks, there is tremendous upside to 

RFID in the healthcare sector as well.

The deployment of RFID systems is helping healthcare providers to offer better patient care by optimizing work flow, offering more efficient services, and ensuring that the correct medical supplies needed for surgeries are ready and waiting in the OR. Pharmaceuticals, biologics, blood and other temperature and time-sensitive medical devices are being tagged with RFID chips that confirm that they have been stored in the proper temperature range and are not about to expire when they are called on for use.

While patient safety is an outstanding benefactor of RFID technology, I’m also excited about the huge impact that RFID can play when it comes to taking a bite out of soaring healthcare costs. According to the Global Healthcare Exchange (GHX), $5 billion worth of medical devices are wasted each year due to inefficient and disconnected manual processes, and lost or expired product.

What other industry would put up with losing billions of dollars worth of product each year? By contrast, video game producer Electronics Arts carries a stock market valuation of about $5 billion.

The $5 billion of wasted medical devices is almost equal to the $7 billion market cap placed on beverage company Molson Coors. Imagine taking a year’s worth of beer and pouring it down the drain? Beer drinkers and shareholders would revolt. So why isn’t that happening in the medical sector, where billions worth of waste could be avoided by deploying RFID systems?

Margot Drees, Director, Corporate Strategy at GHX, told a recent gathering at an RFID event at MIT that by tracking medical devices with technologies like RFID, “we can continue to take wasted costs out of the medical industry.” The thinking here is that if even $3 billion in waste can be removed, healthcare facilities would operate much more efficiently, insurance companies would face fewer claims, and savings would trickle down to the consumer. If there is $5 billion worth of wasted medical devices each year, chances are there are untold billions being wasted in other aspects of the healthcare and medical industry that RFID could minimize.

Just take a look at our parent company, Promega. Prior to deploying RFID freezers and storage cabinets from Terso Solutions (which is owned by Promega), the firm was losing approximately 15-18 percent of its on-site inventory to shrinkage, equal to $1.2 million per year. The use of an RFID storage system for on-site stocking has virtually eliminated shrinkage in the field, while saving another $400,000 worth of expired products each year because the company now has real-time visibility into expiration dates on-site.

A savings of $2 million or so pales in comparison to $5 billion, but it’s a start. If 200 more medical and life sciences companies deployed RFID today and at least matched the savings generated by Promega, you’d be looking at removing nearly a half billion worth of waste from the system.

Here’s a look at how some other healthcare providers are saving money or improving patient care by deploying RFID.

  • At the recent RFID in Healthcare event sponsored by RFID Journal, Tallahassee Memorial Healthcare’s Jay Adams says he received word from a device manufacturer that all 475 infusion pumps had to be recalled for a software upgrade. Because all of the units were tagged with RFID tags from Aeroscout, all pumps were collected within one day, and loaner pumps were quickly put into place. The entire swap-out and repair process was completed in two weeks, something that the pump manufacturer had never seen before. Without RFID, it likely would have taken months just to locate all the pumps that required servicing.
  • Michael McDonald
, a Biomedical Engineer for the U.S. Department of Veterans Affairs, explained how RFID is helping VA facilities to better treat more than 8.3 million veterans each year. One facility that recently deployed RFID is saving more than 100 hours of nursing time previously required for inventorying medical carts.
  • The VA facility has also tagged all of its hospital pumps, allowing for improved patient safety. Recently, nursing staff couldn’t locate a pump needed to administer pain therapy to a patient. It would have taken several hours to rent one. Instead, the hospital staff was able to view in real time that 21 unused pumps were available, and got the pump – and pain relief – to the patient in less than 30 minutes instead of four hours. The facility also saved the time and expense of renting a machine.