Asset management in healthcare: Evaluation of RFID

Healthcare costs in the United States have continued to rise throughout the last decade and poor medical asset management is a contributing factor. Radio frequency identification (RFID) technology has been found to be one way to potentially alleviate this problem by improving process efficiency and reducing costs. However, return on investment (ROI) in RFID technology and its impact are based on the specifics for each healthcare organization and there is no standard methodology. Therefore, a methodology for ROI was created and a case study in a 600-bed hospital was undertaken to determine the feasibility of RFID implementation and its potential impact on asset management. The variables used in the ROI computational methodology were clinical and biomedical asset searching time, shrinkage rates, utilization rates and RFID implementation costs. Specific mobile assets that would benefit most from RFID technology were then selected within these variables. Under the assumptions from past studies, this work determined that implementing RFID technology within the 600-bed hospital was a financially viable decision with a 10.2-month payback period of the initial investment costs, and an expected 327% ROI within three years. This study highlights important RFID asset management techniques and characteristics for hospitals to consider as they determine their own financial feasibility with regards to RFID implementation. The approach can be used to inform budget planning in institutions for RFID implementation.