The Case for RFID in Healthcare Supply Chains. Robert M. Sheridan Director, Interventional Radiology Massachusetts General Hospital

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2 The Case for RFID in Healthcare Supply Chains Robert M. Sheridan Director, Interventional Radiology Massachusetts General Hospital 2

3 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 3

4 Massachusetts General Hospital beds Primary Teaching Hospital Harvard 650,00 exams in Radiology annually Interventional Radiology 15,500 procedures Ranked # 1 U.S. World News 4

5 Know Your Inventory Bringing Lean Philosophy Transparent Views to Hospitals 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

6 Bringing Lean Philosophy to Hospitals 6

7 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 7

8 Typical Hospital Supply Spend Total Supply Spend OR, Cath Lab, Radiology 55% Rest of Hospital

9 Understanding Cost and Revenue Leakage Patient Registration Service Provided Charge Capture Intra-Operative Documentation Leakage..? Billing Reimbursement

10 Leaks...! 10 20% Missed Charges Incomplete, Inaccurate and Scattered Data Loss of Revenue on Services Rendered Due to Lack of Documentation Idle Money: Prolonged Billing Process

11 What makes an inventory management system successful? Simple Workflow = Most Accurate Data Negative effects of incomplete data magnified by downstream decision making Source of Error Workflow Accessible Data Source of Benefits The key to all of the benefits provided by Supply Automation Systems lies in the systems ability to capture and present item level 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

12 Manual Technology Workflow Automating Workflows: Device/Supply Utilization Login to Device Console Access Patient Or Account Name Cabinet Opens Remove Product(s) Press Remove or enter Product Code Login to Device Console Access Patient Or Account Name Cabinet Opens Press Return for Needed Products Enter Serial/Lot Number Challenges with Manual Technologies Requires manual product identification Requires manual quantity entry Requires manual entry of itemlevel information Requires manual selection of patient on returns Enter Serial/Lot Number Close Cabinet Are Supplies Returned? Replace Product On Shelf Close Cabinet Possible Downstream Effects Missed charges Inaccurate inventory Inaccurate implant logging No Yes

13 Manual vs. RFID Workflow Comparison Manual Technology Workflow RFID Workflow Login to Device Console Login to Device Console Login to Device Console Login to Device Console Access Patient Or Account Name Access Patient Or Account Name Access Patient Or Account Name Select Return Item Cabinet Opens Cabinet Opens Cabinet Opens Cabinet Opens Remove Product(s) Press Return for Needed Products Close Cabinet Replace Product On Shelf!!! Press Remove or enter Product Code Enter Serial/Lot Number Enter Serial/Lot Number Replace Product On Shelf Are Supplies Returned? Close Cabinet Close Cabinet Close Cabinet No Yes Are Supplies Returned? No Yes! Potential sources of manual error Hands Free Benefits: - Eliminates 5 manual steps - Removes 3 sources of potential error

14 Design For Success Applying RFID appropriately is key! Get the right staff involved Run PDCA cycles often 14

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16 Value vs. Volume Inventory Management Strategy

17 Do I track with RFID? Barcode? Both? RFID-Based Workflow Automation Barcode Scan- Based Workflow Automation

18 Phase 1 Testing the waters Initial Deployment- Clinical Workflow Test Fit 5 cabinets installed in 1 IR Suite, Fall 2007 Measurement began January 2008

19 Phase 2 Expansion and 1 st 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

20 Above and Beyond Phase 3 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

21 ROI Model 6 month study Against well established existing barcode system Time studies of staff activities Stock outs Recalls 21

22 Financial Results 2.1 M Increase in Charge Capture Nearly 1 M increase in reimbursement $400, Mass General ROI $350, $300, $250, $200, $150, $100, $50, $- January February March April May June MGH s Cumulative Cost for System Cumulative Return on Investment

23 Additional Results Increase in Patient Safety 8% Increase in Charge Capture 20% Largest Impact on Revenue Cycle Reduction of Clinician Clnician FTE Time 30% Reduction in Stock Outs 70% 23

24 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

25 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

26 Inventory Controller with Manual System 26

27 Inventory Controller with an Automated RFID System 27

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