Imagine this scenario:
A leading medical device vendor, selling 100 thousand pacemakers a year to dozens of hospitals in the United States, discovers that they have over 10% of expired items at 5000 hospitals each year. The approximate loss (to the hospital or the vendor depending on the payment terms) can reach tens of millions of dollars!
The inventory was not managed well – but how can this big corporation find out the root of this problem? if this occurred at a couple of hospitals it would be easier to investigate, but the task becomes a lot more challenging when its five thousand hospitals.
Are medical device companies blind?
The point of this story is to demonstrate how blind medical device companies are left when it comes to managing their inventory, once it leaves their facilities.
They know what inventory left and where it was sent, but they do not know:
1. What devices were used at each hospital
2. What inventory is about to, or already has, expired
3. Are doctors selecting their devices over competitors
4. What needs to be re-ordered immediately
The accuracy of inventory reports normally depends on hospital staff, specifically nurses. Nurses are very busy taking care of the patient before, during, and after the procedure, often times leaving no time to fill-out detailed reports about the devices being used.
Company sales representatives pay frequent visits to the hospital, but are not always able to take accurate stock counts.
Material clerks make sure to shelve the inventory, and may not always notice the expiration date.
These are only several scenarios to how accuracy challenges may occur.
There is a solution
Today's technology has advanced far enough, bringing an original solution to this problem, along with all kinds of savings to both hospitals and vendors.
The solution is RFID – the ability to track expensive medical devices from the time they leave the manufacturer, while being shipped, delivered, shelved to the time used by the doctor. The usage can be in the Operating Room, Cath-Lab, EP Lab, Pharmacy, Orthopedics, and supply rooms.
How it's done
Each medical device is recorded and labels with an RFID tag at the manufacturing plant. Its entire product information is now associated with the device – the maker, expiration date, delivery date … etc. The device brings the hospital's intervening room and is placed inside a SmartCabinet. The SmartCabinet is now able to read its content, what is taken out and used and what is about to expire.
The information is now available to the vendor. They can finally manage their expensive inventory even if they are not on site.
The end result
Zero expired items
Real time information, reports, and alerts
Immediate and automatic re-ordering of inventory by the hospital
Automatic billing mechanism
Revenue Protection – Millions of dollars saved each month!