Building A Business Case for RFID
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2 Building A Business Case for RFID From the Basement to the C-Suite Terri Simpson-Tucker, RN, MSN Assistant Administrator Kaiser Permanente San Jose Medical Center April 16, 2010
3 AGENDA 1. Organizational Background 2. Scope of RFID Project 3. Rationale for RFID 4. Developing Political & Financial Support 5. Business Case Development Assumptions Value Analysis Hard & Soft Savings 6. Financial Funding Strategies 7. Our Experience 8. Questions & Answers
4 The nation s largest non-profit Health Maintenance organization (HMO) Headquartered in Oakland, California Integrated pre-payment system Focus on Wellness & Prevention System-wide Electronic Medical Record
5 MISSION To provide affordable, high-quality health care services that improve the health of our members and the communities we serve.
6 San Jose Medical Center 242 licensed bed acute care hospital Free-standing ASU 16 Medical Office Buildings 35,000 annual outpatient visits 2,225 Total Live Births De-centralized campus comprised of: 34 buildings 1,388,376 gross square feet 37.6 acres Built 1973, seismic retrofit to stay standing until 2030 Centrally located in Silicon Valley
7 SCOPE OF RFID PROJECT Kaiser Permanente San Jose 660,000 square feet of coverage Across 10 buildings 35 floors Over 4,200 items tracked on RFID sensor network Implementation represents an increased oversight of $6.5M of hospital assets Temperature monitoring for 120+ medication and food refrigerators & warmers
8 WHY RFID? TIMELY EFFICIENT EFFECTIVE As a not-for-profit organization Kaiser Permanente has the corporate responsibility to provide the best investment for our member s monies. Providing appropriate oversight for asset management is a key factor of this obligation.
9 INVE$T TO $AVE RFID $500,000 Capital Investment 100% Funded 100% Purchased 100% Implemented 100% Supported by Senior Leadership 100% Supported by Corporate Executives
10 C-SUITE Chief Executive Officer Chief Operating Officer Chief Financial Officer Chief Nursing Officer Chief of Quality/Risk What is in it for them?
11 DIRECTORS & MANAGERS Nursing Pharmacy Radiology Laboratory Information Technology Security Emergency Department Operating Room Recovery Room Support Services Engineering Clinical Technology EVS Material Management Safety Officer What is in it for them?
12 THE FRONT LINE Nurses Physicians Physical Therapists Respiratory Therapists Transporters Lift Techs Biomedical Engineers Engineer What is in it for them?
13 RESEARCH A 36-Hospital Time and Motion Study: How Do Medical-Surgical Nurses Spend Their Time? FINDINGS Nurses travel between 1 to 5 miles per 10-hour shift with a median of 3 miles. Nurses spend more than ¾ of their time devoted to nursing practice. Care Coordination (communication between caregivers account for 1/5 of nursing practice time). Inefficiencies in communication consume nurses time and put patients at risk. Many failure-to-rescue situations can be traced back to communication delays. Of all reported time, 6.6% was categorized as waste. Activities within this category, many of which were hunting and gathering behaviors, are clearly targets for improving efficiency. The Permanente Journal/Summer 2008 Volume 12, No. 3 Hendrich, Chow, Skierczynski & Lu
14 RESEARCH A 36-Hospital Time and Motion Study: How Do Medical-Surgical Nurses Spend Their Time? CONCLUSIONS & RECOMMENDATIONS Use of intelligent systems that automatically track the physical location of medical providers can minimize waste and improve patient outcomes. A holistic approach is needed whereby people, process, and technology come together harmoniously in a physical space to produce the maximum medical-surgical unit efficiency. Minimizing hunting and gathering activities will minimize waste and leave nurses more time to spend with patients in direct care activities which correlates with improved patient outcomes and a safer care environment. The Permanente Journal/Summer 2008 Volume 12, No. 3 Hendrich, Chow, Skierczynski & Lu
15 MUDA Traditional Japanese term for an activity that is wasteful and doesn t add value or is unproductive. Key concept in Toyota Production. Waste reduction is an effective way to increase profitability. Key concept in Lean Principles and Performance Improvement initiative recommended by the IHI (Institute for Healthcare Improvement). 7 Categories of Waste Overproduction Unnecessary Transportation Inventory Motion Defects Over-Processing Waiting
16 UNDERSTANDING Seek first to understand, then to be understood. Understand the Problems & Needs of your Organization DATA Understand the Available Technology Understand the Funding Options and Sources Understand existing or proposed systems & the environment Limitations? Infrastructure Leverage Understand installation requirements
17 WHY RFID? TIMELY EFFICIENT EFFECTIVE By being able to appropriately track utilization of equipment, RFID will provide Kaiser Permanente San Jose the ability to increase oversight of $6.5M worth of hospital owned equipment and maximize financial investments by: Reducing Rental Equipment Costs Improved management of specialty owned sleep surfaces Reducing hunting & gathering function for nurses & ancillary staff (improves staff productivity) Providing utilization information to guide capital equipment purchases. (Data driven purchases Maximize available space Providing a safer environment to provide care by ensuring that WPS equipment is readily available at the time of risk based activities.
18 WHY RFID? TIMELY EFFICIENT EFFECTIVE Providing a safer environment to receive care by ensuring that: Equipment can be located at the time care has been ordered Decrease time from order to treatment Equipment can be located at the time preventative maintenance is due or recall notification Rental & purchased equipment is checked by CT prior to entering the equipment stream. Equipment availability supports key organizational imperatives: ED throughput, 11:00am discharges, (improved patient flow) sepsis, LOS, WPS, Survey Readiness, Reduces waiting times for admits, discharges & transfers, OR op-time, ETC. Theft deterrence Management of high-cost/low-turnover supplies (unit of issue: case)
19 3-Year Asset Validation Process 2007 Equipment Inventory Fixed Assets Booked to Area 1,609 $ 44,612,331,01 $ 17,634, Reconciled Assets 1,307 $ 35,445,924,37 $ 17,421, Unreconciled Assets 302 $ 9,166, $ 212, Unreconciled Assets NBV > $0 55 $ 668, $ 212, NBV = $0 247 $ 8,497, $ 9,166, $ 212, Less: $0 NBV Assets (Active in Biomed) 51 $ 2,033, TOTAL ASSETS WRITTEN OFF IN $ 7,132, $ 212,484.92
20 MULTI-DISCILINARY TEAM Administration Clinical Technology Central Equipment Distribution Nursing Materials Management Engineering IT Respiratory Therapy TPMG Security Finance Pharmacy
21 ASSUMPTIONS 10% reduction in Specialty Bed rental cost 15% reduction in Baxter Pumps rental cost 15% reduction in Enteral Feeding Pump rental cost
22 ASSUMPTIONS 80% reduction of lost, stolen and misplaced equipment Currently, the replacement over 3 years is: 5% for the following: Bili Lights, Accumax Pumps, Aspirators, Fetal Monitors, Scales, Therapy Vest Device, Ventilators, Bair Huggers, Spectralink Phones and Transport Monitors 10% for the following: BiPAPs, CPAPs, CPM Machines, Defibrillators, Edwards Monitors, Enteral Feeding Pumps, Gurneys, Humidifiers, Monitor Pagers, Multi Measurement Servers (MMS), PCA Pumps, PCEA Pumps, Pulse Oxymeters, Telemetry Boxes, Telemon Monitors, Thermometers, Ultrasound Machines, Walkers, Wheelchairs, Blood Pressure, Dopplers, Dynamaps,EKG Machines, Flowtron Compression Devices, Dialysis Machines, Ultrasound and Wound Care Carts 20% for the BiPAP Units
23 ASSUMPTIONS Increased utilization of equipment: 5% spread over a useful life of 10 years for the following: Bili Lights, BiPAPs, and ICU Beds 10% spread over a useful life of 10 years for the following: Accumax Pumps, Aspirators, Baxter Pumps, Specialty Beds, CPAPs, CPM Machines, Defibrillators, Edwards Monitors, Enteral Pumps, Fetal Monitors, Gurneys, Humidifiers, Isolation Carts, Monitor Pagers, MMS, PCA Pumps, PCEA Pumps, Scales, Tele Boxes, Telemon Monitors, Therapy Vests, Ultrasound Machines, Ventilators, Walkers, Wheelchairs 20% spread over a useful life of 10 years for the following: Bair Hugger, Blood Pressure Machines, Dopplers, Dynamaps, EKG Machines and Flowtron Compression Devices
24 EQUIPMENT SAVINGS
25 VALUE ANALYSIS Hard Savings
26 COST SAVINGS Soft Returns 1. Improved Customer Satisfaction 2. Improved Compliance with Updates, Preventative Maintenance and Recalls 5. Enhanced Patient Transport 6. Increased Patient Safety 7. Increased Staff Safety 8. Improved Productivity & Job Satisfaction 9. Improved staff efficiency
27 FINANCIAL FUNDING STRATEGIES Lease Rent to Own Full Purchase SCALABILITY Capital Equipment Purchase Capital Construction Project
28 NCAL ENTERPRISE STANDARD Active RFID System Room location accuracy Ease of installation (plug & play into electrical outlets, no hardwiring) Vendor support 24/7 support, minimal IT support 100% wireless self-healing mesh network ZigBee Based Technology Customizable Alerts & Reports Notification rules can be customized to workflow (e.g., indications that maintenance, repair or sanitization is needed; temperature out of range) Rental days, needs maintenance, expiration pending, etc Applicability/Usage Sterilizable Tags, Temperature & humidity monitoring, elopement patients 5 Year Battery Life Can be cleaned with a hospital-grade disinfectant Sensor to alert when equipment is in motion Detects when Tag has been removed from an asset & transmits an alert. No Seat Licenses required No Frequency Interference with existing wireless system and technologies RFID System may be accessed from any hospital based computer or hand-held device. Web-based application Intuitive usage, minimal training for users required. Displays equipment location on a floor map or in a table.
29 INITIAL RESULTS One Month Post Implementation Biomedical Engineering Pharmacy Sterile Processing Nursing Physical Therapy
30 NEXT STEPS Local RFID Steering Committee Calculate ROI 3 yr asset validation (establish new baseline) Measure effectiveness: Metric Development Assess, alter, adapt & adopt Collect stories: care & caring experiences NCAL Enterprise Wide Spread Practice Umbrella Contract addendum agreements Leverage implementation, information & learnings Enterprise wide visibility to asset availability and usage to guide purchases & maximize usage of current assets across enterprise Presentation NCAL CFOs & Property Accounting
31 If you can t find it: You can t use it You can t clean it You can t maintain it You can t fix it You have to go look for it You have to stop what you are doing You can t care for your patients You can t do your primary job You are wasting time You are wasting money
32 RFID RIGHT EQUIPMENT RIGHT PLACE RIGHT TIME RIGHT PATIENT RIGHT THING TO DO!
33 CONTACT INFORMATION Terri Simpson-Tucker, RN, MSN Assistant Administrator Kaiser Permanente San Jose Medical Center 255 International Circle San Jose, CA
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