In the daily fast-paced health care environment, clinical and biomedical staff often struggle to find equipment for patient care and preventive maintenance. Many health care leaders may believe this to be unavoidable and alternative solutions such as real-time locating systems (RTLS) to be too costly or too complex to implement. But when leaders from clinical and biomedical teams unite, they can form a powerful case for implementing RTLS asset tracking. The first step is understanding the far-reaching impacts that missing equipment has on a health system from a monetary and human perspective.
Providers have set out to quantify the components of operational waste related to missing equipment, including over-purchasing; asset write-offs; rental equipment costs; staff inefficiency and patient dissatisfaction. These financial and human components can form the basis of your justification for RTLS.
While the largest impact on inefficiency relates to nursing time, first we’re going to focus on the financial aspects of waste, specifically write-offs, over-purchasing equipment, both as capital and operational expenses, as well as rental costs.
The second largest driver of cost is lost asset write-offs, hitting a hospital’s bottom line. Whether the asset truly walked out the door or is simply hidden in the facility, equipment that can’t be inventoried requires financial write-offs, which quickly add up. We’ve seen numbers as high as $1.5 million annually for a 300-bed hospital. The finance department can help one understand how write-offs affect a facility.
The next largest driver of cost is one that’s often cited when considering RTLS. Today, many hospitals compensate for missing equipment by simply purchasing more so it can be found when needed. When you can find equipment with RTLS, you can purchase less of it. You may think this only comes into play if you’re ready to replace your fleet of IV pumps. However, that cost can be annualized across your fleet of equipment to help visualize the overall financial picture.
Another cost related to over-purchasing is one that may be flying under the radar in your hospital: the operational cost of replacing missing equipment. When approval is not needed to purchase a single asset below a certain value, equipment such as a missing bladder scanner can be re-purchased on nursing’s operational budget. These hidden purchases can add up to $100,000 annually. Team up with nursing to help quantify these costs.
Finally, on the financial side, reduced equipment rentals can be a wild card cost impact, as they will be different for each hospital. This could be a minor or major contributor but should be factored in when performing your financial analysis. With RTLS, your facility will likely purchase and rent less equipment, which is an obvious driver for implementing RTLS asset tracking.
Now, let’s break down the human aspect of the analysis by talking about the value of time. While arguably a “soft value,” it is an important consideration. First, consider the time spent searching during preventative maintenance activities. In a recent TechNation webinar, biomeds told us they spend more than 10% of their time searching for equipment. You can calculate the value of that time for financial analysis, and you can also frame the discussion around how that time can be better spent.
The same analysis, when applied to nursing time, can be one of the strongest arguments for adopting RTLS. Nurses across the country have told us they spend 10% of their time searching for equipment – that’s 208 hours per nurse per year. That can equate to over $5 million per year in non-value added wages for a 300-bed hospital.
Beyond the dollar value of nursing time, the larger impact is on patients. Patient care and satisfaction suffer from time lost with nurses while they track down equipment. Decreased nursing time at the bedside and reduced access to care puts patient satisfaction scores and related reimbursements at risk.
Given this reality, clinical leadership can be your greatest advocate for bringing RTLS asset tracking to your hospital. Nursing and other clinical leaders are focused on delivering the best patient experience as health systems shift to value-based care and a patient-centric care model. Nurses have seen the value in RTLS asset tracking to help support the clinical team. In fact, recent Midmark research indicates that clinical leaders are twice as likely as biomedical leaders to have interest in purchasing an RTLS. By involving your chief nursing officer and other clinical leaders as key stakeholders in your RTLS asset tracking initiative, you create a stronger proposal.
Midmark RTLS has completed this financial analysis for many hospitals and can do the same for yours. Our RTLS Specialists help you examine cost drivers to create your business case and determine return on investment for your specific situation.
There are many options for different locating technologies specific to your situation. Midmark RTLS can help your organization gain buy-in for asset tracking while providing the best solution to support your analysis. We have decades of asset tracking, staff locating and patient flow optimization experience. We’ve been rated by Gartner as a visionary RTLS provider, and KLAS Research consistently rates us as one of the top three vendors for RTLS.
With our continued innovation to reduce RTLS cost of ownership, we’ve launched Midmark RTLS Cloud and a new Bluetooth Low Energy (BLE) locating technology to help modernize hospital asset tracking capabilities. Knowing the importance of keeping patient care units operational, the Midmark RTLS BLE sensors simply and easily plug into standard electrical outlets. This is another plus mark in the clinician’s column since they will not have to shut-down a care unit for hardware installation.
By calculating the financial and human costs associated with asset inefficiencies and aligning with your clinical colleagues, you can present a stronger case for implementing an RTLS asset tracking solution.
– Jeanne Kraimer is a product marketing manager at Midmark RTLS. For more information, visit midmarkRTLS.com.
 Ladd Insight Report: Voice of the Clinical Leader Regarding RTLS. February 2021.
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