Building A Business Case for RFID

Terri Simpson-Tucker, RN, MSN Assistant Administrator

Kaiser Permanente San Jose Medical Center April 16, 2010

From the Basement to the C-Suite

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

your logo here

•  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

your logo here

MISSION

To provide affordable, high-quality health care services that improve the health of our members and the communities we serve.

your logo here

•  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”

San Jose Medical Center

your logo here

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

your logo here

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.

your logo here

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

your logo here

C-SUITE

• Chief Executive Officer • Chief Operating Officer • Chief Financial Officer • Chief Nursing Officer • Chief of Quality/Risk

What is in it for them?

your logo here

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?

your logo here

THE FRONT LINE •  Nurses •  Physicians •  Physical Therapists •  Respiratory Therapists •  Transporters •  Lift Techs •  Biomedical Engineers •  Engineer

What is in it for them?

your logo here

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

your logo here

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

your logo here

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

your logo here

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

your logo here

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.

your logo here

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)

your logo here

3-Year Asset Validation Process …………………2007 Equipment Inventory

Fixed Assets Booked to Area 1,609 $ 44,612,331,01 $ 17,634,103.94 Reconciled Assets 1,307 $ 35,445,924,37 $ 17,421,619.02 Unreconciled Assets 302 $ 9,166,406.64 $ 212,484.92

Unreconciled Assets

NBV > $0 55 $ 668,907.57 $ 212,484.92 NBV = $0 247 $ 8,497,499.07 0

302 $ 9,166,406.64 $ 212,484.92

Less: $0 NBV Assets (Active in Biomed) 51 $ 2,033,493.39 -

TOTAL ASSETS WRITTEN OFF IN 2007

251 $ 7,132,913.25 $ 212,484.92

your logo here

MULTI-DISCILINARY TEAM

•  Administration •  Clinical Technology •  Central Equipment

Distribution •  Nursing •  Materials Management •  Engineering

•  IT •  Respiratory Therapy •  TPMG •  Security •  Finance •  Pharmacy

your logo here

ASSUMPTIONS •  10% reduction in Specialty Bed rental cost

•  15% reduction in Baxter Pumps rental cost

•  15% reduction in Enteral Feeding Pump rental cost

your logo here

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

your logo here

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

your logo here

EQUIPMENT SAVINGS

your logo here

VALUE ANALYSIS Hard Savings

your logo here

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

your logo here

FINANCIAL FUNDING STRATEGIES

•  Lease • Rent to Own •  Full Purchase • Capital Equipment Purchase • Capital Construction Project

SCALABILITY

your logo here

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.

your logo here

INITIAL RESULTS

One Month Post Implementation •  Biomedical Engineering •  Pharmacy •  Sterile Processing • Nursing •  Physical Therapy

your logo here

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

your logo here

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

your logo here

RFID • RIGHT EQUIPMENT • RIGHT PLACE • RIGHT TIME • RIGHT PATIENT

RIGHT THING TO DO!

CONTACT INFORMATION

Terri Simpson-Tucker, RN, MSN Assistant Administrator

Kaiser Permanente San Jose Medical Center 255 International Circle

San Jose, CA 95119 Terri.Simpson-Tucker@kp.org