The Case for RFID in Healthcare Supply Chains

Robert M. Sheridan

Director, Interventional Radiology

Massachusetts General Hospital

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Today’s Agenda

• Massachusetts General Hospital (MGH)

• Bringing Lean Management to the Hospital

• Goals When Deploying RFID Technology

• MGH 3 Phase Implementation

• MGH Future Plans for RFID

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Massachusetts General Hospital

• 850-1000 beds

• Primary Teaching Hospital – Harvard

• 650,00 exams in Radiology annually

– Interventional Radiology – 15,500 procedures

• Ranked # 1 – U.S. World News

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Bringing “Lean” Philosophy to Hospitals

Know Your Inventory – Transparent Views

• Predictability and Continuous Improvement

• FIFO: Supply Utilization

• JIT: Supply Reordering

Value Stream Mapping – Eliminate non value added activities

– Push vs. Pull Inventory

Streamline Manual Workflows – No manual inventory counts

– Automated Billing, Reordering and documentation

– Recall and Expiration Surveillance

Bringing “Lean” Philosophy to Hospitals

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High Value Supply Services Service Focus:

– Perioperative Services – Cardiology – Radiology – Endoscopy/GI Services

Technology Goals:

– Information Driven Solutions

• Through automation, create insight into operational and clinical performance of supply chain

– RFID Enabled Automation

• RFID solutions automate processes for clinical workflow improvements, and auto reorder files

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Typical Hospital Supply Spend

Total Supply Spend OR, Cath Lab, Radiology

Rest of Hospital

55%

Understanding Cost and Revenue Leakage Patient Registration

Reimbursement

Service Provided

Charge Capture

Intra-Operative Documentation

Billing

Leakage..?

Leaks...! 10 – 20% Missed Charges

Incomplete, Inaccurate and Scattered Data

Idle Money: Prolonged

Billing Process

Loss of Revenue on Services Rendered

Due to Lack of Documentation

Workflow Accessible

Data

Increased Data/ Charge Capture

Reduction in on hand inventory, Optimize Pars, Reduce stock

outs

System Integration: Billing, Materials, EHR, Scheduling

Eliminate Expired Product

Reduce Time spent on Inventory Management

Reporting and analytics

Increase Compliance, Manage Device

Recall

What makes an inventory management system successful?

The key to all of the benefits provided by “Supply Automation Systems” lies in the systems

ability to capture and present item level data

Source of Benefits

Source of Error

Simple Workflow = Most Accurate Data Negative effects of incomplete data magnified by downstream

decision making

Login to Device Console

Access Patient Or Account Name

Remove Product(s)

Press ‘Remove’ or enter Product Code

Enter Serial/Lot Number

Close Cabinet

Cabinet Opens

Login to Device Console

Access Patient Or Account Name

Press ‘Return’ for Needed Products

Enter Serial/Lot Number

Replace Product On Shelf

Cabinet Opens

No

Close Cabinet

Yes

Manual Technology Workflow

Automating Workflows: Device/Supply Utilization

• Challenges with Manual Technologies – Requires manual product

identification

– Requires manual quantity entry

– Requires manual entry of item-level information

– Requires manual selection of patient on returns

• Possible Downstream Effects – Missed charges

– Inaccurate inventory

– Inaccurate implant logging Are Supplies Returned?

Login to

Device Console

Access Patient

Or Account Name

Remove

Product(s)

Press ‘Remove’ or enter Product Code

Enter Serial/Lot

Number

Close Cabinet

Cabinet

Opens

Are Supplies

Returned?

Login to

Device Console

Access Patient

Or Account Name

Press ‘Return’ for Needed Products

Enter Serial/Lot

Number

Replace Product

On Shelf

Cabinet

Opens

No

Close Cabinet

Yes

Login to

Device Console

Access Patient

Or Account Name

Close Cabinet

Cabinet

Opens

Are Supplies

Returned?

Login to

Device Console

Select

Return Item

Replace Product

On Shelf

Cabinet

Opens

No

Close Cabinet

Yes

!

! !

Potential sources

of manual error

‘Hands Free’ Benefits:

- Eliminates 5 manual steps

- Removes 3 sources of potential error

RFID Workflow Manual Technology Workflow

Manual vs. RFID Workflow Comparison

!

Design For Success

• Applying RFID appropriately is key!

• Get the right staff involved

• Run PDCA cycles often

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Value vs. Volume Inventory Management Strategy

Do I track with RFID? Barcode? Both?

RFID-Based Workflow

Automation

Barcode Scan-Based Workflow

Automation

Phase 1

Testing the waters Initial Deployment- Clinical Workflow Test Fit • 5 cabinets installed in 1 IR Suite, Fall 2007 • Measurement began

• January 2008

Phase 2

Expansion and 1st Integration • Milestone 1: Expansion into second IR suite • Milestone 2: Interface with Peoplesoft Benefits: • Comprehensive real time tracking of NIR Inventory • Automatic reorder messages generated

Phase 3 Above and Beyond Milestone: Integration with RIS – automatic delivery of information for billing and insurance

Benefits: • Accurate capture of information by item, date, patient

and exam type • Reduction in time spent identifying and confirming

chargeable devices • Continued Integration with physician documentation

ROI Model

• 6 month study

• Against well established existing barcode system

• Time studies of staff activities

• Stock outs

• Recalls

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$-

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

$400,000.00

January February March April May June

Mass General ROI

Financial Results • 2.1 M Increase in Charge Capture • Nearly 1 M increase in reimbursement

MGH’s Cumulative Cost for System

Cumulative Return on Investment

Additional Results

Reduction in Stock Outs

Reduction of Clnician FTE Time

Increase in Charge Capture

Increase in Patient Safety

Largest Impact on Revenue Cycle

20%

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30%

8%

70%

Reduction of Clinician FTE Time

Patient Safety and Compliance

• FDA Recall assist

– Device recalls have increased over 400% since 2001

• Joint Commission Tissue Tracking Requirements

• Expired product reports and automated alerts – Proactive alerts to supervisors

before products can expire

– Device Recall – Provides item level location and usage data

*Data from ECRI 2009

RFID in Lunder

Expansion

• 26 unit expansion into the Lunder Building

• 22 unit expansion in Radiology

• Tissue and bone tracking

• Scope tracking

• Ortho implant tracking

Inventory Controller with Manual System

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Inventory Controller with an Automated RFID System

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