While there are numerous studies, white papers, and other informational pieces regarding the value of these systems, only 25-30% of hospitals use some form of RTLS system, and many of those are limited in their deployment. The number one issue for the relatively low numbers is the cost associated with installing the system, the monthly fees, and then gathering the information to prove an ROI to the C suite. While there are actual hard dollar savings, an enormous amount of soft dollar returns must be considered. This blog post will explore the proven benefits of RTLS in healthcare settings and the time it takes to see a return on investment.
Time savings in finding assets:
One of the most immediate benefits of RTLS is the time saved in locating assets. Walk through any hospital today and ask a nurse, assistant, or a member of the BioMed team and ask them if they lose time every day, every shift, looking for equipment. The answer I have received every time I have asked that question is a resounding yes. One BioMed team member at a hospital stated he had been looking for a single piece of equipment for six months. One day, the item just showed up in the BioMed department. He had no idea where it had been; he just knew for six months that he had not been able to find it. Imagine how much time he spent looking for that one item and then add up all of the additional time he spent looking for other equipment during those six months.
The standard rule is that nurses spend 5 minutes per hour or one hour per 12-hour shift looking for items. There are no conclusive studies to support this, but in limited conversations with hospital staff, the number is incorrect. Not that the time spent is too high, but it is not enough. There are too many moving pieces of equipment in a hospital, and finding equipment not in use or repair takes time. The result of this inability to find the proper equipment has caused staff to say there is not enough and we need to order more, which is expensive. Hospitals do not need to invest in more more equipment, but better tools to assist their teams to find the equipment that is there, but not always easy to find.
Theft prevention and asset management:
Asset theft and loss can be a significant financial burden on hospitals. Numerous studies show the cost of hospital equipment by theft or loss ranges from $4,000 – $12,000 a year per bed. Theft and loss is an area that I am always asked about. How can you reduce my theft or loss with a tracking tag that someone can remove? It is very tough to deter theft, but the system does provide the ability to understand if a piece of equipment has left the facility or is no longer reporting to the network. Today, you may not know something is gone for months, but with RTLS, the system can alert you and, more importantly, provide critical time data to approximate when the time of loss occurred through time-stamping. Hospitals might start learning that the equipment is not being stolen but taken out in the laundry, left in ambulances, or stored away in ceiling tiles by a staff member who no longer works for you. Understanding that something is gone, the last time it was seen, and the last location provides key components to knowing where a piece of equipment might have gone. Today, most hospitals call it theft and chalk it up to the cost of business. Instead, why not put in a system where hospitals can monitor the movement of high-value assets, detect unauthorized removal, increase the ability to reclaim those assets, change procedures to reduce the loss, and significantly reduce cost?
Increased efficiency for BioMed
The hospital’s BioMed team is responsible for maintaining thousands pieces of equipment. While the hospital’s computerized maintenance management system (CMMS) alerts the BioMed team for scheduled preventive maintenance (PM), it does not tell them where to find that piece of the hundreds of pieces of equipment they need to work on. Hospitals will realize an enormous return if they can reduce the time BioMed spends looking for equipment and instead focuses on ensuring equipment is working and on the floor for use.
RTLS solutions also provide substantial financial benefits by enabling BioMed teams to locate and return rented assets when they are no longer needed. Hospitals often rent equipment for various reasons, such as accommodating a sudden influx of patients, replacing equipment under repair, or meeting temporary needs. Daily or weekly fees in rental agreements can quickly accumulate if hospitals do not return all of the equipment promptly. By tagging and tracking these assets up front, the hospital can ensure a timely return of the equipment to the rental company and avoid unnecessary rental extension fees. This proactive approach to rented equipment management leads to significant cost savings for the hospital.
Implementing RTLS also provides hospitals with better visibility into a hospital’s actual asset inventory and the workload of their BioMed team, enabling informed decisions about the appropriate balance between in-house maintenance and outsourcing. This increased efficiency can ensure optimized maintenance contracts to ensure enough staff on the BioMed team to effectively manage the equipment without over-staffing. This understanding further contributes to cost savings and optimized resources.
Operational efficiency and patient satisfaction:
Real-Time Location Systems (RTLS) enhances hospital operational efficiency, boosting patient flow and room turnover rates and increasing revenue. In December of 2021 the ECRI Institute highlighted the negative impacts of Emergency Department (ED) overcrowding, including lost revenue and elevated patient risk.
Improving patient flow also boosts patient satisfaction, influencing Medicare and Medicaid reimbursement rates. Dartmouth’s Tuck School of Business Professor Laurens Debo states in a paper he and his team did on wait times that EDs “struggle to improve the patient experience while dealing with long waits, which erodes medical and financial performance.” He suggested reducing ED wait times to improve patient satisfaction by expanding hospital capacity or providing accurate estimates.
Physical expansion is often impractical and expensive. RTLS can solve this by effectively “expanding” hospital capacity by increasing efficiency. By accurately tracking equipment in real-time, RTLS ensures that assets are readily available when needed, reducing patient wait times and increasing the number of people treated within a given time frame. This strategy enhances patient satisfaction and optimizes resources, demonstrating that efficiency can be as powerful as capacity expansion in improving hospital performance.
How much does RTLS cost?
Everything above sounds great, but the next question is, “What do I have to invest,” “How long to deploy,” and “How long until I see a return?” Cost has typically been a multi-tiered answer as vendors then went through how to connect these systems to the hospital’s Wi-Fi or running cabling and other hardware throughout ceilings and walls. The price tag for deploying a system quickly went to hundreds of thousands and even millions of dollars. Implementation is in addition to the price of the trackers, replacement costs, and monthly subscription fees. On top of that, the installation time took months. The time to show an ROI started going longer and longer in the future.
New companies in the hospital RTLS business, such as TrueSpot Health, have greatly reduced this cost and increased the time to ROI. Their patented AQFind™ RTLS platform provides a full plug-and-play installation in one to two weeks. Their system does not need to touch hospital Wi-Fi to track equipment and can work in places without Wi-Fi, such as parking lots, storage facilities, and even off-site vendors. The reduced time and cost allows hospitals to realize an ROI in just a few months versus years.
The ROI of implementing an RTLS system in healthcare consistently proves itself over time. Yet, many decision-makers hesitate to invest due to concerns about up-front costs and the time it takes to realize a return on investment. However, by not implementing an RTLS solution, hospitals are missing out on the significant value it can bring, potentially costing them hundreds of thousands to millions of dollars annually.
As healthcare organizations begin to recognize the substantial benefits of RTLS technology, including operational efficiency, asset management, and patient satisfaction, they will see the importance of adopting a solution that aligns with their needs and budget.
To learn more about TrueSpot Health’s MedSpot 360 software powered by the AQFind RTLS platform can provide your team with the ability to track and find equipment for a fraction of the cost of other systems. Learn about the new Essentials program which can get an RTLS system installed for $2,500 up front and less than $1,400 per month.