Topic: BusinessAccounting

Last updated: February 11, 2019

Problem Identification:Nurses work in an extremely complex environment of continuously changing conditions while performing a critical coordination role in providing patient care (Tucker & Spear, 2006). Adding to this complexity and responsibility, many hospitals face common challenges with the lack of timely information regarding the location and movement of patients, staff, and high-value equipment (AHRQ, 2014). This lack of information can cause disruptions and delays in workflows that greatly reduce employee effectiveness and increase the time needed to complete tasks (Tucker & Spear, 2006). One study found that nurses on average spend roughly 42 minutes of an 8-hour shift looking for missing equipment, while several other studies estimated that “nurses spend from 10 percent to 25 percent of their time looking for other staff members” (Tucker & Spear, 2006, p. 645).

These workflow problems can be considered “operational failures” when a system is unable to provide reliable supplies and information when needed (Tucker & Spear, 2006).In order to cope with this challenge, staff members are often assigned the ongoing task of finding and recovering many essential assets such as infusion pumps, wheelchairs, and monitoring equipment (AHRQ, 2014; Moore, 2015). Employees might store these items in unique locations that are only known to them, making them unavailable to other staff members. Searching for missing high-value equipment, supplies and even sometimes other staff members consumes large amounts of staff time and creates delays with patient flow (Moore, 2015). These delays and bottlenecks often occur within key patient flow areas such as admissions, the emergency department, and the postanesthesia care unit (AHRQ, 2014). When equipment cannot be found despite a strong staff effort, the losses can be costly. Some medical facilities have reported a loss of nearly 20 percent of their equipment, and for wheelchairs in particular, losses have ranged from 10 to 25 percent each year (Moore, 2015; Snowbeck 2003).

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“St. John’s Mercy Medical Center in St. Louis, estimates the hospital loses about 50 chairs a year from its 400-chair fleet” (Schremp, 2003). Accounting for equipment “shrinkage” within a hospital’s budget can be very costly: replacing 50 wheelchairs can cost $15,000, and one medical center was forced to spend $11.

8 million to repurchase 383 items lost within a four-year timeframe (Snowbeck, 2003; Shaban & Paredes, 2015). Improving the ability to locate high-value, critical items when needed can improve patient care delivery, reduce workload on staff, and protect the bottomline on a hospital’s annual budget.Product DefinitionEstablishing a real-time location system (RTLS) with Radio Frequency Identification (RFID) technology would offer the ability to track equipment, patients and staff movement to reduce uncertainty and improve workflows. A recent study by the Agency for Healthcare Research and Quality (AHRQ, 2014) highlighted the use of RFID as an RTLS to track equipment, patients and staff at two hospitals within the Texas Health Resources (THR) healthcare system. One RTLS was initially created in 2008 to track high value equipment at the Texas Health Presbyterian Hospital in Dallas (a 650-bed, 40-year-old facility). Another system was later created and employed at a newer and smaller (58-bed) facility upon opening in 2012.

The AHRQ assessment of this RTLS showed moderate evidence of success in reducing the cost of misplaced and lost equipment, improving room turn-around times, and boosting overall satisfaction with physicians, staff and patients. The system saved nearly $1 million in the first year, including $100,000 on budgeting for “shrinkage”, roughly $285,000 on rental equipment ($65,000 per month), and more than $600,000 in procurement-related expenses because of improved utilization of assets (AHRQ, 2014; Marshall, 2018). Within the 58-bed hospital, room turnover rate was faster than any other hospital within the THR system, averaging seven minutes less than the 47-minute average for the system as a whole. The system created a high rate of overall employee and patient satisfaction, which hospital leaders attributed to the timely and efficient services created by this real-time location capability (AHRQ, 2014; Marshall, 2018). THX’s successful implementation of an RTLS demonstrated that RFID can assist with locating essential equipment and improving coordination to both boost efficiency and reduce operating losses.


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