RFID Use in Hospitals: A Business Perspective
Tim Berezny
and Khaled Hassanein
St. Joseph's Healthcare Hamilton
Hamilton, Ontario, Canada
DeGroote School of Business, McMaster University
Hamilton, Ontario, Canada
Abstract. RFID technology is experiencing wide adoption in a number of
industries while providing numerous unique benefits to each. However, the
healthcare industry has been slow to adopt this promising technology, with
some claiming cost constraints, satisfaction with barcodes or lack of universal
standards as reasons. This paper provides an overview of RFID technology, and
discusses the facilitating and inhibiting factors for its adoption within hospital
environments. It further provides an analysis of the needs and concerns of the
main hospital stakeholders impacted by this technology with the goal of
maximizing the potential for realizing its full promise to improve and optimize
healthcare delivery.
1 Introduction
Radio Frequency Identification (RFID) is a technology that allows for wirelessly
storing and retrieving data about objects using devices called RFID tags that are
attached to such objects [1, 2]. RFID technology is rapidly gaining popularity in many
industries as a cost-saving and information gathering tool. Some companies such as
Wal-Mart have even mandated that all of their suppliers adopt RFID technology to
improve their supply chain logistics.
The two main components of an RFID system are the tag and the reader: electronic
tags contain memory and an antenna and readers read the data stored on the tag [3, 4].
The size of RFID tags can range from barely smaller than the size of a postage stamp
to the size of a postcard [5]. A complete RFID system consists of other components
such as computers, networks, databases and software applications that sort and
interpret incoming data [1].
There are a number of read/write options available for RFID tags [6]. They can be
Read-Write, Read-Only or WORM (Write-Once, Read Many). The data on Read-
Write tags can be changed or totally overwritten by any reader. Read-Only tags are
written with a code by the tag manufacturer that can never be changed. WORM tags
can be rewritten once by a reader. Read-Write tags are more expensive than WORM
tags and are better applied in reusable packaging systems, while WORM tags are
better suited to disposable packaging systems. RFID tags can be active, passive or
semi-passive [7]. Active tags have a battery that can last several years and have a
Berezny T. and Hassanein K. (2007).
RFID Use in Hospitals: A Business Perspective.
In Proceedings of the 1st International Workshop on RFID Technology - Concepts, Applications, Challenges, pages 82-92
DOI: 10.5220/0002429300820092
larger range and data capacity than passive tags [3]. Passive tags do not have a
battery and use electromagnetic emissions from the reader to power a brief response,
usually just an ID number [2, 4]. Semi-passive tags use both the battery and the
waves sent out by the reader. Active and semi-passive tags are typically used for
higher-value goods that are scanned over longer distances [7].
In concept, RFID technology is similar to that of barcodes, yet it is quite different.
While barcodes use light and lasers to exchange data, RFIDs use radio frequency [8].
A line of sight is not necessary to read an RFID tag, as automated wireless scanning is
possible at a range of 30 feet [1, 8]. Theoretically, one could read many tags
simultaneously, at any orientation and in most environments [3]. RFIDs can hold
much more information than a typical barcode, ranging from 96 bits to over 125
kilobytes. Other advantages of RFIDs over barcodes include its superior data reading
speed and the ability to change information in read-write tags if required [8] (see
Table 1 for a full comparison between RFIDs and barcode technology, including
cost). These advantages for RFIDs over barcodes translate to making the capture,
storage and to a certain extent the utilization of captured information less disruptive to
personnel in environments utilizing RFIDs.
Table 1. Comparison of barcode and RFID technologies [6, 8, 9].
Barcodes RFIDs
Line of sight Required Not required
Number of items
1 Depends on technology
used, potential of several
Orientation-sensitivity Yes Low-frequency tags are
less orientation-sensitive
compared to high-
frequency ones
Rewriteablity No Read-Write RFID tags are
Security Data can be encrypted,
but no protection from
being copied
Allows more sophisticated
forms of data protection
Effects of outside
Simply needs to be
physically visible to be
read; Degrades with
handling over time
Read rates affected by
variables such as radio
interference, nearby metals
or liquids; More durable
Storage space ~ 25 bytes 96 bits to > 125 kilobytes
Cost As low as 1¢ or less per
unit (in large quantities)
As low as 5¢ per unit (in
large quantities), to as high
as $20 per unit for
sophisticated active tags
Universal standards are being developed to identify particular products or assets
with RFID tags through what is known as an Electronic Product Code (EPC). Based
on its EPC, an item can be linked with one or more networks either on the Internet or
a virtual private network where information about it exists. An Object Name Service
(ONS) sits on a local server and matches tag EPC information with other information
about the item, including location. Lastly, physical markup language (PML) is the
standard being used to describe product items [5].
Healthcare as a whole is currently in the exploratory phase of adopting RFIDs, and
has yet to fully embrace the technology. Despite a slew of clear benefits for RFIDs in
effective healthcare delivery, adoption rates have been slow so far [10]. As hospitals
are a major component of the healthcare sector and as they stand to gain the most out
of applying such a technology due to the complexity of their operations, it becomes
important to examine factors that influence the adoption of RFIDs within hospitals in
particular. It is only when such factors are fully understood and that understanding
incorporated into plans for deploying this technology in hospitals that we will start
seeing an improvement in the adoption rates of RFIDs within the healthcare sector.
In Section 2, we examine the motivating factors for adopting RFID technology as
well barriers to its wide spread use within hospital environments. Section 3 provides a
discussion of the needs and concerns of the main stakeholders that are impacted by
implementing RFIDs in hospitals and ends the paper with some conclusions.
2 RFID Adoption in Hospitals
The healthcare system in many countries is facing one or more of the following
problems with varying degrees of severity [11]:
i. Excessive waiting times for patients due to an increased load on the system
as a result of an increasingly aging population in most developed countries,
and limited resources (staff, equipment and facilities)
ii. High incidence of preventable medical errors due to poor workflow
management, heavy reliance on paper records, fatigued staff and insufficient
or wrong information. According to the Institute of Medicine, the cost of
such adverse events is approximately $17 billion in the US alone [12]
iii. High costs of delivery resulting from inefficient utilization of resources
(staff, equipment and facilities) due to poor workflow management; inability
of administrators and staff to access accurate up to date information
regarding operations; suboptimal supply chain management and increasing
legal and liability insurance costs
Many of the above problems could be effectively addressed through using modern
information technologies such as the Internet, decision support systems, and RFIDs
which can all contribute to the delivery of higher quality healthcare while realizing
operational efficiencies [11]. However, in general, the healthcare sector has been
slow to adopt IT advances in the past, due to internal bureaucracies, resistance from
key personnel and budgetary issues [1, 11]. With budgets and policies usually being
developed through the ruling government, political and economic forces can also have
significant impacts on healthcare budgets and consequently on IT adoption.
However, this slow adoption trend is changing; as hospitals and healthcare
organizations are currently investing more in technology to help reduce costs,
improve patient safety and decrease wait times [1]. Below we explore the motivations
and barriers for adopting RFID technology within a hospital environment.
2.1 Motivations for Adoption
As explained earlier, the main promise of RFID technology lies in its ability to
wirelessly collect and transmit real time information about tagged persons or items
(e.g. identity, specifications, location, etc.) which could be used to optimize
operations and improve the quality of immediate, short, medium as well as long range
decisions. Fig. 1 shows the value network for the healthcare industry depicting the its
various parties and their interactions [11]. RFID technology has the potential to
optimize many of the interactions within a hospital environment (shown within the
dashed line in the figure). Such interactions are labelled with an “R” symbol in the
figure. Within a hospital environment RFIDs’ added value can come in measurable
forms like personnel savings. However, it is also the intangible factors, such as gains
in efficiency and improvements in safety that can bring about value to hospitals [1].
Fig. 1. Healthcare value network (adapted from [11]) (interactions where RFID technology
could add value are labeled with “R”).
The potential benefits of using RFID technology within hospitals stems from its
ability to support the tracking and better management of patients, staff,
equipment/asset, drugs and other supplies. Table 2 outlines a summary of the various
hospital applications that become possible by tagging people or items and the
resulting potential benefits of such applications. It should be noted that the benefits
listed in each row of Table 2 do not have a one-to-one correspondence with the
applications listed in that row. Although implementing some of the applications will
result in realizing some of the listed benefits, it is when all of the listed applications
are implemented that the full potential of RFID technology is realized.
Table 2. RFID applications and benefits in hospitals.
is Tagged
Applications Potential Benefits
Identify patient
Locate patient
Match patient to procedure
Match patient to drug/blood
Track patient history
Control access to secure
Reduced wait times
Less medial errors
Lower delivery costs
Lower legal costs
Increased safety
Increased security
Increased patient satisfaction
Identify staff
Match staff to patient/procedure
Locate staff
Track staff history
Control access to secure
Reduced wait times
Reduced medical errors
Lower delivery costs
Lower legal costs
Increased security
Increased staff satisfaction
Locate equipment
Track use history
Ensure quality
Optimize maintenance schedule
Reduced theft
Reduced hoarding
Reduced wait times
Reduced wasted time of staff
Reduced equipment operating
Lower delivery costs
Lower legal costs
Increased patient satisfaction
Increased staff satisfaction
Verify authenticity
Locate drugs
Check expiry date
Verify patient compliance
Track use
Optimized supply chain
Decreased adverse effects
Secured drug stock
Lower drug costs
Lower legal costs
Increased patient safety
Increased staff satisfaction
Track inventory
Coordinate orders
Check expiry date
Optimized supply chain
Lower product costs
Lower legal costs
Increased patient satisfaction
Increased staff satisfaction
Below we explore the above potential benefits of using RFIDs within hospitals in
more detail grouping them where applicable and outlining various examples for each:
(i) Patient and Staff Management: RFIDs are being used to track the positions of
patients, staff and equipment to help better manage resources. This is especially
useful during mass casualty events, when RFIDs can collect information and
communicate it to personnel quickly and accurately [13].
A hospital in Bologna, Italy is currently using RFID tags for patients in need of
blood transfusions. If the tags on the patient’s wristband and on the blood unit are a
match, then the blood is automatically released through a wireless electronic seal.
This greatly reduces any chance of human error in such procedures [14].
A hospital in Taipei, Taiwan has installed field generators throughout its facility
and equipped its staff, patients and instruments with RFID tags. When tagged people
or equipment passes through the different field generators, their positions are logged
and tracked using a separate software program. The technology also has a security
component, restricting access of people and equipment to certain areas, and sounding
an alarm if an unauthorized person enters a restricted area [1].
The location tracking capabilities of RFIDs could also be of great advantage in
controlling the spread of infections in pandemic situations by tracking which patients
and healthcare providers were in close proximity to infected patients [15].
(ii) Equipment/Asset Management: RFIDs can facilitate the tracking of equipment
location and use history. This reduces the time spent by personnel searching for
equipment as well as discouraging hoarding practices by staff trying to ensure the
availability of equipment for their own use. RFID tagging also provides for reducing
the incidence of under utilization, theft and loss of equipment [16]. Other benefits in
this area include ensuring that equipment has been properly sterilized as well as
making sure that all surgical instruments is accounted for following surgeries which
greatly reduces the incidence of leaving such instruments in patients during operations
[17]. For example, a medical center in Virginia, USA has used RFID tags on 12,000
pieces of equipment at its three facilities and documented benefits such as capital
avoidance, and higher utilization efficiencies. Additionally, nursing staff are reported
to have saved 30 minutes per nurse per shift due to not having to spend as much time
searching for equipment [18].
(iii) Drugs Management: Healthcare organizations are increasingly concerned about
drug counterfeiting due to its adverse effects on patient safety. Pharmaceutical
companies are also concerned with this problem due to their severe financial losses to
counterfeit drugs. RFID technology is being utilized to address this problem through
its tracking and tracing functions [19]. Similar to the retail industry, currently tagging
drugs is mostly at the pallet and case level, but plans are in place to have item-level
tracking in the very near future. Starting 2007, any drug company that wishes to
export to the US must be RFID-compliant [19]. Pfizer has has already begun
shipping RFID tagged pallets, cases and bottles of frequently copied and stolen drugs
like Lipitor and Viagra [20].
Within a hospital environment RFID tagging could be used to locate, authenticate
and ensure that drugs are within their expiry dates. It could also be used to scan
prescriptions and send them to hospital pharmacies to reduce the incidence of
prescription errors due to poor hand writing [21]. In the US, hospitals are impacted by
pharmaceutical Pedigree laws to ensure the authenticity of drugs. These laws vary by
state and can be very labour intensive to comply with [22]. RFIDs can automatically
build an electronic pedigree (e-Pedigree) that documents a drug entire life cycle from
manufacturer to end-user [23].
(iv) Supplies Management: Hospitals could benefit significantly from using RFID
technology to improve their supply chain management operations. Within a hospital
environment, lack of visibility in the supply chain and decentralized ordering
practices results in erratic inventory shortages or surpluses with obvious implications
to patient experience and financial bottom lines. Such problems could be greatly
reduced through RFID tagging which would allow each item to be tracked regardless
of location [5]. This opens the way for real-time inventory management which leads
to improved replenishment, shorter order-cycle times, in-transit tracking of items,
more accurate forecasts, and increased flexibility in responding to sudden surges in
demand for particular items [5]. It also allows hospitals to better manage suppliers’
relations including allowing suppliers to manage hospital product ordering and
inventory levels [24].
The benefits within each of the above categories can also be classified in terms of
hard and soft returns. For example, in terms of asset tracking, “Allowing nurses to
find equipment more easily” leads to “soft returns” of “labour savings” and
“increased patient and staff satisfaction”. In terms of patient tracking, “Reduced risk
of lost patient” leads to the “hard return” of “cost avoidance” [25]. Classifying RFID
benefits in this way can be beneficial for creating the business case for it. For
example, showing that being able to find equipment more easily makes nurses jobs
less stressful and that reducing the risk of lost patients results in less resource
spending and lower legal costs, can make the argument for RFID technology clearer
and easier to grasp.
2.2 Barriers to Adoption
Despite the aforementioned benefits and applications of RFIDs in hospitals, the
technology has been experiencing a sluggish rate of adoption [10]. Several reasons
have been given for this slow adoption rate. Some studies indicate that healthcare
providers are happy with bar coding and see RFIDs as something that will be further
off in the future. Others say that organizations may not have invested in barcodes yet
and feel that RFIDs are beyond their reach or feel that the Internet will preclude the
need for either technology [10].
Below we summarize the main impediments of adopting this technology within a
hospital environment:
(i) Cost: Similar to other industries, cost is cited as a chief barrier to adoption, with
surveys showing 57% of large healthcare organizations saying that a lack of available
funding is a major hurdle and 46% saying that the cost and return on investment of
RFID tags and readers are a major issue [26]. It is important to note that the costs
associated with implementing RFID technology exceed the simple costs of tags and
readers and include the costs of applying tags to objects, implementing new
applications, system integration, as well as training and reorganization [5].
(ii) Lack of universal standards: The same survey above also found 60% of
respondents had delayed some RFID activities while they wait for industry or
government guidance on standards. Some organizations are likely to wait until
healthcare-specific standards have been evaluated and implemented elsewhere [26].
(iii) Integration issues: Another challenge relates to effective integration of this
technology within organizations. With many hospitals still using the barcode system
for tracking, moving to RFID tagging will require changes in business processes to
integrate the new technology successfully. This will result in conversion costs
(including consultants), reallocation of staff, additional hiring, and maintenance
contracts [9]. Aside from the substantial associated costs, there are the obstacles of
obtaining buy in from various user groups as well as the cost of training them on the
new technology and processes.
(iv) Physical/hardware issues: Significant physical issues are involved, such as the
details of antenna configuration, environmental conditions and interaction of product
materials with tag materials. Other operational decisions include deciding the best
location to place the tag on a case or pallet, the best locations for placing antennas,
and locations within the value chain where data should be captured automatically
[27]. One must also ensure that RFID devices are not interfering with other medical
equipment in the hospital [2].
(v) Data/software issues: The volume, cleansing and analysis of RFID-generated data
other major concerns when implementing RFID solutions within hospitals [21]. Such
data would have to also be integrated with legacy data bases and applications.
Extensive testing would have to be undertaken to ensure the reliability and security of
new and existing applications utilizing this data.
(vi) Privacy and security issues: Finally, the privacy and security impacts of RFIDs
are still unclear at present, which may be acting as a deterrent for some organizations
[5]. There has been some outcry from civil libertarians and human rights activists
regarding personal data being held in RFID tags, which theoretically could be
gathered by ‘snoopers’ [3]. The introduction of any new, unfamiliar technology
naturally leads to the perception of risk. However, until the true risks of RFIDs are
discovered (whether privacy- or security-related), it is likely the perception of risk
will continue to act as a barrier to RFID adoption [5].
3 Discussion and Conclusions
In addition to addressing the above barriers to implementations, the success of RFIDs
within a hospital environment will depend on the extent to which it satisfies the needs
and addresses the concerns of its main stakeholders. The main stakeholders who will
be impacted with RFIDs within a hospital environment are outlined in Table 3 along
with their potential benefits, and concerns in using this technology. The
understanding derived from this stakeholders’ analysis is key for the successful
deployment of this technology within hospitals. It is important to note that members
of the same stakeholder’s group might have varying needs/concerns based on where
they are assigned within the hospital as well as the needs/concerns of other
stakeholders that interact with them.
Table 3. RFID stakeholders at Hospitals: Benefits and concerns.
Stakeholder Benefits Concerns
Lower Wait times
Increased convenience
Increased Safety
Increased Security
Potential loss of privacy
Less time searching for patients,
doctors and equipment
Access to better patient information
Optimized schedules
Less paper work
Lower incidence of medical errors
Lower liability exposure
Learning new
Coping with new
Potential loss of privacy
Better patient information
Increased efficiency
Optimized schedules
Less paper work
Lower incidence of medical errors
Lower liability exposure
Learning new
Coping with new
Potential loss of privacy
Workflow improvements
Increased patient throughput
Improved staff scheduling
Better inventory management
Better Asset/equipment management
Lower legal costs
Access to real-time up to date
Optimized Supply chain
Implementation costs
Risks and costs of
Implementing new
Lack of universal
Cost of training staff
Managing privacy
Coping with regulations
RFID technology use is growing, as current users find more applications for it and
new organizations and industries begin to adopt it. Its development in the healthcare
industry may be slower than in other others, but with falling prices and more data
becoming available from various health pilot studies, the barriers to adoption are
continuing to fall. By recognizing the needs/concerns of the various stakeholders in a
hospital environment and adopting best practices in implementing and rolling out this
technology [28] hospitals can better realize the full suite of advantages it affords.
The authors wish to thank Richard Borrelli, Ryan Liddell and Meghan Toll who
contributed to the literature review in the early phase of this work.
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