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All Things HIT

Mar 29 2013   12:14PM GMT

Adopt and grow RTLS with hospital consolidation

Posted by: AllinHIT
EHR systems, RFID, ROI, RTLS

In the early ’80s,  upon graduating from college, I was marketing pharmacy management systems to independent pharmacies in a joint venture between AmerisourceBergen (at the time it was Bergen Brunswig) and NDCHealth (now McKesson).  This was my first entrance into the healthcare space, and  I truly believe the result of my experiences drove my interest in both health IT and this blog, All Things HIT. It made me look at the relationship between systems and operations and the importance of inventory control, re-ordering points, and stocking levels, all of which affect cash flow and cost. Similarly, it made me both evaluate and sell return on investment (ROI) for theses systems.

The pharmacy management systems included a point-of-care application that allowed the pharmacy to control the “front end,” or the portion of the store selling consumerable items, and the “back end,” where they distributed prescription drugs.  The ROI on these systems was proven, and very much needed to manage the biggest investment of the pharmacy: its inventory.  My favorite lead generator was obtaining information on start-up pharmacies, then proving ROI to the owner(s).  This is when they had a capital expense budget, and had concerns about inventory investment.  In some cases, they had other existing stores, which meant using our system allowed them better inventory utilization based on market location, hence lowering their costs.

Some years later, I worked for Verizon Data Services, selling bandwidth (sometimes referred to as “pipe,” or internet access) and one of my largest customers was a hospital.  It was then that I learned about radio frequency identification (RFID), and the result was the same as my days with marketing pharmacy systems, learning about a necessary inventory management tool.

Today, as a health IT consultant, this area is addressed through real time location systems (RTLS). With RTLS, the spiel is the same: a necessary management tool for managing hospital inventory/assets and other resources (people, beds, medical devices, stretchers, wheelchairs, etc).  Just as I urged those pharmacies to improve their stores with these systems, I now urge hospitals to do so with RTLS.  Especially during this age of consolidation, which is in some ways similar to opening up a new store. It’s a perfect time to better manage the huge investment in devices, people, and consolidate those acquired assets allowing a better result from the acquisition.  If two hospitals are combining, a true picture of their combined assets for devices, wheelchairs and stretchers can not only prevent unnecessary purchases, but can also assist in the ultimate goal, enhancing patient care!

According to transparency market research, the RTLS market in 2011 was reported to be about USD $256 million, and is estimated to reach $4 billion by 2022.  This growth will be due in part to the rise of medical devices.  However, I hope the growth is in larger part due to hospitals consolidating with both each other and large ambulatory clinics with assets.

RTLS will allow for devices, equipment, and in some cases, people, to be utilized more effectively.  If a wheelchair is needed to transport a patient to med-surgery, for example, a hospital worker can easily check his or her mobile phone and use the RTLS system to identify the closest wheelchair.  This accommodates the patient faster, getting him or her to med-surgery faster and directly enhancing patient care!  This is just a small example of what can be done with RTLS for better patient care.  This can be applied to beds, stretchers, and the closest AED device for quickly addressing possible  infractions.

Besides patient care, of course, there is the ability to reduce cost from equipment leakage, avoid unnecessary purchases, and truly understand the value of what I call “your functional inventory for care.” Are you a hospital going through a consolidation/acquisition?  If so, I believe you should consider RTLS systems along with your possible EHR implementation, of course, with a step-by-step approach!  If I’m preaching to the choir,  take this survey.

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