RFID Use in Hospitals: A Business Perspective

Tim Berezny

and Khaled Hassanein

St. Joseph's Healthcare Hamilton

Hamilton, Ontario, Canada

DeGroote School of Business, McMaster University

Hamilton, Ontario, Canada

Abstract. RFID technology is experiencing wide adoption in a number of

industries while providing numerous unique benefits to each. However, the

healthcare industry has been slow to adopt this promising technology, with

some claiming cost constraints, satisfaction with barcodes or lack of universal

standards as reasons. This paper provides an overview of RFID technology, and

discusses the facilitating and inhibiting factors for its adoption within hospital

environments. It further provides an analysis of the needs and concerns of the

main hospital stakeholders impacted by this technology with the goal of

maximizing the potential for realizing its full promise to improve and optimize

healthcare delivery.

1 Introduction

Radio Frequency Identification (RFID) is a technology that allows for wirelessly

storing and retrieving data about objects using devices called RFID tags that are

attached to such objects [1, 2]. RFID technology is rapidly gaining popularity in many

industries as a cost-saving and information gathering tool. Some companies such as

Wal-Mart have even mandated that all of their suppliers adopt RFID technology to

improve their supply chain logistics.

The two main components of an RFID system are the tag and the reader: electronic

tags contain memory and an antenna and readers read the data stored on the tag [3, 4].

The size of RFID tags can range from barely smaller than the size of a postage stamp

to the size of a postcard [5]. A complete RFID system consists of other components

such as computers, networks, databases and software applications that sort and

interpret incoming data [1].

There are a number of read/write options available for RFID tags [6]. They can be

Read-Write, Read-Only or WORM (Write-Once, Read Many). The data on Read-

Write tags can be changed or totally overwritten by any reader. Read-Only tags are

written with a code by the tag manufacturer that can never be changed. WORM tags

can be rewritten once by a reader. Read-Write tags are more expensive than WORM

tags and are better applied in reusable packaging systems, while WORM tags are

better suited to disposable packaging systems. RFID tags can be active, passive or

semi-passive [7]. Active tags have a battery that can last several years and have a

Berezny T. and Hassanein K. (2007).

RFID Use in Hospitals: A Business Perspective.

In Proceedings of the 1st International Workshop on RFID Technology - Concepts, Applications, Challenges, pages 82-92

DOI: 10.5220/0002429300820092

 SciTePress

larger range and data capacity than passive tags [3]. Passive tags do not have a

battery and use electromagnetic emissions from the reader to power a brief response,

usually just an ID number [2, 4]. Semi-passive tags use both the battery and the

waves sent out by the reader. Active and semi-passive tags are typically used for

higher-value goods that are scanned over longer distances [7].

In concept, RFID technology is similar to that of barcodes, yet it is quite different.

While barcodes use light and lasers to exchange data, RFIDs use radio frequency [8].

A line of sight is not necessary to read an RFID tag, as automated wireless scanning is

possible at a range of 30 feet [1, 8]. Theoretically, one could read many tags

simultaneously, at any orientation and in most environments [3]. RFIDs can hold

much more information than a typical barcode, ranging from 96 bits to over 125

kilobytes. Other advantages of RFIDs over barcodes include its superior data reading

speed and the ability to change information in read-write tags if required [8] (see

Table 1 for a full comparison between RFIDs and barcode technology, including

cost). These advantages for RFIDs over barcodes translate to making the capture,

storage and to a certain extent the utilization of captured information less disruptive to

personnel in environments utilizing RFIDs.

Table 1. Comparison of barcode and RFID technologies [6, 8, 9].

Barcodes RFIDs

Line of sight Required Not required

Number of items

scanned

simultaneously

1 Depends on technology

used, potential of several

hundred

Orientation-sensitivity Yes Low-frequency tags are

less orientation-sensitive

compared to high-

frequency ones

Rewriteablity No Read-Write RFID tags are

rewriteable

Security Data can be encrypted,

but no protection from

being copied

Allows more sophisticated

forms of data protection

Effects of outside

variables

Simply needs to be

physically visible to be

read; Degrades with

handling over time

Read rates affected by

variables such as radio

interference, nearby metals

or liquids; More durable

Storage space ~ 25 bytes 96 bits to > 125 kilobytes

Cost As low as 1¢ or less per

unit (in large quantities)

As low as 5¢ per unit (in

large quantities), to as high

as $20 per unit for

sophisticated active tags

Universal standards are being developed to identify particular products or assets

with RFID tags through what is known as an Electronic Product Code (EPC). Based

on its EPC, an item can be linked with one or more networks either on the Internet or

a virtual private network where information about it exists. An Object Name Service

(ONS) sits on a local server and matches tag EPC information with other information

about the item, including location. Lastly, physical markup language (PML) is the

standard being used to describe product items [5].

Healthcare as a whole is currently in the exploratory phase of adopting RFIDs, and

has yet to fully embrace the technology. Despite a slew of clear benefits for RFIDs in

effective healthcare delivery, adoption rates have been slow so far [10]. As hospitals

are a major component of the healthcare sector and as they stand to gain the most out

of applying such a technology due to the complexity of their operations, it becomes

important to examine factors that influence the adoption of RFIDs within hospitals in

particular. It is only when such factors are fully understood and that understanding

incorporated into plans for deploying this technology in hospitals that we will start

seeing an improvement in the adoption rates of RFIDs within the healthcare sector.

In Section 2, we examine the motivating factors for adopting RFID technology as

well barriers to its wide spread use within hospital environments. Section 3 provides a

discussion of the needs and concerns of the main stakeholders that are impacted by

implementing RFIDs in hospitals and ends the paper with some conclusions.

2 RFID Adoption in Hospitals

The healthcare system in many countries is facing one or more of the following

problems with varying degrees of severity [11]:

i. Excessive waiting times for patients due to an increased load on the system

as a result of an increasingly aging population in most developed countries,

and limited resources (staff, equipment and facilities)

ii. High incidence of preventable medical errors due to poor workflow

management, heavy reliance on paper records, fatigued staff and insufficient

or wrong information. According to the Institute of Medicine, the cost of

such adverse events is approximately $17 billion in the US alone [12]

iii. High costs of delivery resulting from inefficient utilization of resources

(staff, equipment and facilities) due to poor workflow management; inability

of administrators and staff to access accurate up to date information

regarding operations; suboptimal supply chain management and increasing

legal and liability insurance costs

Many of the above problems could be effectively addressed through using modern

information technologies such as the Internet, decision support systems, and RFIDs

which can all contribute to the delivery of higher quality healthcare while realizing

operational efficiencies [11]. However, in general, the healthcare sector has been

slow to adopt IT advances in the past, due to internal bureaucracies, resistance from

key personnel and budgetary issues [1, 11]. With budgets and policies usually being

developed through the ruling government, political and economic forces can also have

significant impacts on healthcare budgets and consequently on IT adoption.

However, this slow adoption trend is changing; as hospitals and healthcare

organizations are currently investing more in technology to help reduce costs,

improve patient safety and decrease wait times [1]. Below we explore the motivations

and barriers for adopting RFID technology within a hospital environment.

2.1 Motivations for Adoption

As explained earlier, the main promise of RFID technology lies in its ability to

wirelessly collect and transmit real time information about tagged persons or items

(e.g. identity, specifications, location, etc.) which could be used to optimize

operations and improve the quality of immediate, short, medium as well as long range

decisions. Fig. 1 shows the value network for the healthcare industry depicting the its

various parties and their interactions [11]. RFID technology has the potential to

optimize many of the interactions within a hospital environment (shown within the

dashed line in the figure). Such interactions are labelled with an “R” symbol in the

figure. Within a hospital environment RFIDs’ added value can come in measurable

forms like personnel savings. However, it is also the intangible factors, such as gains

in efficiency and improvements in safety that can bring about value to hospitals [1].

Fig. 1. Healthcare value network (adapted from [11]) (interactions where RFID technology

could add value are labeled with “R”).

The potential benefits of using RFID technology within hospitals stems from its

ability to support the tracking and better management of patients, staff,

equipment/asset, drugs and other supplies. Table 2 outlines a summary of the various

hospital applications that become possible by tagging people or items and the

resulting potential benefits of such applications. It should be noted that the benefits

listed in each row of Table 2 do not have a one-to-one correspondence with the

Hospital

applications listed in that row. Although implementing some of the applications will

result in realizing some of the listed benefits, it is when all of the listed applications

are implemented that the full potential of RFID technology is realized.

Table 2. RFID applications and benefits in hospitals.

Who/What

is Tagged

Applications Potential Benefits

Patients

Identify patient

Locate patient

Match patient to procedure

Match patient to drug/blood

Track patient history

Control access to secure

locations

Reduced wait times

Less medial errors

Lower delivery costs

Lower legal costs

Increased safety

Increased security

Increased patient satisfaction

Staff

Identify staff

Match staff to patient/procedure

Locate staff

Track staff history

Control access to secure

locations

Reduced wait times

Reduced medical errors

Lower delivery costs

Lower legal costs

Increased security

Increased staff satisfaction

Equipment/

Asset

Locate equipment

Track use history

Ensure quality

Optimize maintenance schedule

Reduced theft

Reduced hoarding

Reduced wait times

Reduced wasted time of staff

Reduced equipment operating

costs

Lower delivery costs

Lower legal costs

Increased patient satisfaction

Increased staff satisfaction

Drugs

Verify authenticity

Locate drugs

Check expiry date

Verify patient compliance

Track use

Optimized supply chain

Decreased adverse effects

Secured drug stock

Lower drug costs

Lower legal costs

Increased patient safety

Increased staff satisfaction

Supplies

Track inventory

Coordinate orders

Check expiry date

Optimized supply chain

Lower product costs

Lower legal costs

Increased patient satisfaction

Increased staff satisfaction

Below we explore the above potential benefits of using RFIDs within hospitals in

more detail grouping them where applicable and outlining various examples for each:

(i) Patient and Staff Management: RFIDs are being used to track the positions of

patients, staff and equipment to help better manage resources. This is especially

useful during mass casualty events, when RFIDs can collect information and

communicate it to personnel quickly and accurately [13].

A hospital in Bologna, Italy is currently using RFID tags for patients in need of

blood transfusions. If the tags on the patient’s wristband and on the blood unit are a

match, then the blood is automatically released through a wireless electronic seal.

This greatly reduces any chance of human error in such procedures [14].

A hospital in Taipei, Taiwan has installed field generators throughout its facility

and equipped its staff, patients and instruments with RFID tags. When tagged people

or equipment passes through the different field generators, their positions are logged

and tracked using a separate software program. The technology also has a security

component, restricting access of people and equipment to certain areas, and sounding

an alarm if an unauthorized person enters a restricted area [1].

The location tracking capabilities of RFIDs could also be of great advantage in

controlling the spread of infections in pandemic situations by tracking which patients

and healthcare providers were in close proximity to infected patients [15].

(ii) Equipment/Asset Management: RFIDs can facilitate the tracking of equipment

location and use history. This reduces the time spent by personnel searching for

equipment as well as discouraging hoarding practices by staff trying to ensure the

availability of equipment for their own use. RFID tagging also provides for reducing

the incidence of under utilization, theft and loss of equipment [16]. Other benefits in

this area include ensuring that equipment has been properly sterilized as well as

making sure that all surgical instruments is accounted for following surgeries which

greatly reduces the incidence of leaving such instruments in patients during operations

[17]. For example, a medical center in Virginia, USA has used RFID tags on 12,000

pieces of equipment at its three facilities and documented benefits such as capital

avoidance, and higher utilization efficiencies. Additionally, nursing staff are reported

to have saved 30 minutes per nurse per shift due to not having to spend as much time

searching for equipment [18].

(iii) Drugs Management: Healthcare organizations are increasingly concerned about

drug counterfeiting due to its adverse effects on patient safety. Pharmaceutical

companies are also concerned with this problem due to their severe financial losses to

counterfeit drugs. RFID technology is being utilized to address this problem through

its tracking and tracing functions [19]. Similar to the retail industry, currently tagging

drugs is mostly at the pallet and case level, but plans are in place to have item-level

tracking in the very near future. Starting 2007, any drug company that wishes to

export to the US must be RFID-compliant [19]. Pfizer has has already begun

shipping RFID tagged pallets, cases and bottles of frequently copied and stolen drugs

like Lipitor and Viagra [20].

Within a hospital environment RFID tagging could be used to locate, authenticate

and ensure that drugs are within their expiry dates. It could also be used to scan

prescriptions and send them to hospital pharmacies to reduce the incidence of

prescription errors due to poor hand writing [21]. In the US, hospitals are impacted by

pharmaceutical Pedigree laws to ensure the authenticity of drugs. These laws vary by

state and can be very labour intensive to comply with [22]. RFIDs can automatically

build an electronic pedigree (e-Pedigree) that documents a drug entire life cycle from

manufacturer to end-user [23].

(iv) Supplies Management: Hospitals could benefit significantly from using RFID

technology to improve their supply chain management operations. Within a hospital

environment, lack of visibility in the supply chain and decentralized ordering

practices results in erratic inventory shortages or surpluses with obvious implications

to patient experience and financial bottom lines. Such problems could be greatly

reduced through RFID tagging which would allow each item to be tracked regardless

of location [5]. This opens the way for real-time inventory management which leads

to improved replenishment, shorter order-cycle times, in-transit tracking of items,

more accurate forecasts, and increased flexibility in responding to sudden surges in

demand for particular items [5]. It also allows hospitals to better manage suppliers’

relations including allowing suppliers to manage hospital product ordering and

inventory levels [24].

The benefits within each of the above categories can also be classified in terms of

hard and soft returns. For example, in terms of asset tracking, “Allowing nurses to

find equipment more easily” leads to “soft returns” of “labour savings” and

“increased patient and staff satisfaction”. In terms of patient tracking, “Reduced risk

of lost patient” leads to the “hard return” of “cost avoidance” [25]. Classifying RFID

benefits in this way can be beneficial for creating the business case for it. For

example, showing that being able to find equipment more easily makes nurses jobs

less stressful and that reducing the risk of lost patients results in less resource

spending and lower legal costs, can make the argument for RFID technology clearer

and easier to grasp.

2.2 Barriers to Adoption

Despite the aforementioned benefits and applications of RFIDs in hospitals, the

technology has been experiencing a sluggish rate of adoption [10]. Several reasons

have been given for this slow adoption rate. Some studies indicate that healthcare

providers are happy with bar coding and see RFIDs as something that will be further

off in the future. Others say that organizations may not have invested in barcodes yet

and feel that RFIDs are beyond their reach or feel that the Internet will preclude the

need for either technology [10].

Below we summarize the main impediments of adopting this technology within a

hospital environment:

(i) Cost: Similar to other industries, cost is cited as a chief barrier to adoption, with

surveys showing 57% of large healthcare organizations saying that a lack of available

funding is a major hurdle and 46% saying that the cost and return on investment of

RFID tags and readers are a major issue [26]. It is important to note that the costs

associated with implementing RFID technology exceed the simple costs of tags and

readers and include the costs of applying tags to objects, implementing new

applications, system integration, as well as training and reorganization [5].

(ii) Lack of universal standards: The same survey above also found 60% of

respondents had delayed some RFID activities while they wait for industry or

government guidance on standards. Some organizations are likely to wait until

healthcare-specific standards have been evaluated and implemented elsewhere [26].

(iii) Integration issues: Another challenge relates to effective integration of this

technology within organizations. With many hospitals still using the barcode system

for tracking, moving to RFID tagging will require changes in business processes to

integrate the new technology successfully. This will result in conversion costs

(including consultants), reallocation of staff, additional hiring, and maintenance

contracts [9]. Aside from the substantial associated costs, there are the obstacles of

obtaining buy in from various user groups as well as the cost of training them on the

new technology and processes.

(iv) Physical/hardware issues: Significant physical issues are involved, such as the

details of antenna configuration, environmental conditions and interaction of product

materials with tag materials. Other operational decisions include deciding the best

location to place the tag on a case or pallet, the best locations for placing antennas,

and locations within the value chain where data should be captured automatically

[27]. One must also ensure that RFID devices are not interfering with other medical

equipment in the hospital [2].

(v) Data/software issues: The volume, cleansing and analysis of RFID-generated data

other major concerns when implementing RFID solutions within hospitals [21]. Such

data would have to also be integrated with legacy data bases and applications.

Extensive testing would have to be undertaken to ensure the reliability and security of

new and existing applications utilizing this data.

(vi) Privacy and security issues: Finally, the privacy and security impacts of RFIDs

are still unclear at present, which may be acting as a deterrent for some organizations

[5]. There has been some outcry from civil libertarians and human rights activists

regarding personal data being held in RFID tags, which theoretically could be

gathered by ‘snoopers’ [3]. The introduction of any new, unfamiliar technology

naturally leads to the perception of risk. However, until the true risks of RFIDs are

discovered (whether privacy- or security-related), it is likely the perception of risk

will continue to act as a barrier to RFID adoption [5].

3 Discussion and Conclusions

In addition to addressing the above barriers to implementations, the success of RFIDs

within a hospital environment will depend on the extent to which it satisfies the needs

and addresses the concerns of its main stakeholders. The main stakeholders who will

be impacted with RFIDs within a hospital environment are outlined in Table 3 along

with their potential benefits, and concerns in using this technology. The

understanding derived from this stakeholders’ analysis is key for the successful

deployment of this technology within hospitals. It is important to note that members

of the same stakeholder’s group might have varying needs/concerns based on where

they are assigned within the hospital as well as the needs/concerns of other

stakeholders that interact with them.

Table 3. RFID stakeholders at Hospitals: Benefits and concerns.

Stakeholder Benefits Concerns

Patients

Lower Wait times

Increased convenience

Increased Safety

Increased Security

Potential loss of privacy

Nurses

Less time searching for patients,

doctors and equipment

Access to better patient information

Optimized schedules

Less paper work

Lower incidence of medical errors

Lower liability exposure

Learning new

applications

Coping with new

processes

Potential loss of privacy

Doctors

Better patient information

Increased efficiency

Optimized schedules

Less paper work

Lower incidence of medical errors

Lower liability exposure

Learning new

applications

Coping with new

processes

Potential loss of privacy

Administrators

Workflow improvements

Increased patient throughput

Improved staff scheduling

Better inventory management

Better Asset/equipment management

Lower legal costs

Access to real-time up to date

information

Optimized Supply chain

Implementation costs

Risks and costs of

Implementing new

processes

Lack of universal

standards

Cost of training staff

Managing privacy

concerns

Coping with regulations

RFID technology use is growing, as current users find more applications for it and

new organizations and industries begin to adopt it. Its development in the healthcare

industry may be slower than in other others, but with falling prices and more data

becoming available from various health pilot studies, the barriers to adoption are

continuing to fall. By recognizing the needs/concerns of the various stakeholders in a

hospital environment and adopting best practices in implementing and rolling out this

technology [28] hospitals can better realize the full suite of advantages it affords.

Acknowledgments

The authors wish to thank Richard Borrelli, Ryan Liddell and Meghan Toll who

contributed to the literature review in the early phase of this work.

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