Radio Frequency Tracking Helps Health System Slice Costs

UC San Diego Health System saw huge cost savings after implementing the technology but privacy issues could stall widespread application

by Peter Phung Illustration of the medical cross mixed with computer components

Concern over the rising cost of health care is an ongoing issue heightened by harsh economic times and record unemployment. Federal legislation passed to provide economic assistance to hospitals; however UC San Diego Health System is scrutinizing within to reduce operating costs. After implementing radio frequency identification (RFID) technology in 2006 to track certain mobile medical devices, the health system obtained a return on investment in just three months by reducing inventory leasing costs and search times.1 This is only the beginning for the health system. Six months ago it implemented its first trial to track patients through a hospital using RFID bracelets. Tracking and improving patient flow may provide exponentially greater savings as bottlenecks are exposed and process inefficiencies are identified and corrected.

Background on RFID

RFID identification tags are successors to bar codes. They are placed on objects that need to be identified for selling, shipping or tracking. RFID tags emit radio frequencies that can be picked up by an RFID reader to identify objects. An RFID reader does not need a line-of-sight scan to identify an object. It can read from many meters away, read multiple tags at once and monitor objects constantly with the continuous detection of radio signals.

RFID at UC San Diego

Scott Sullivan, business manager of perioperative services and imaging at the UC San Diego Health System, knew of numerous successes of RFID technology in corporate America and became determined to apply it to the health system’s operations. He partnered with Thomas Hamelin, associate administrator of perioperative services to track 500 infusion pumps using RFID tags in 2006. Within three months the monthly rental costs for infusion pumps dropped from $8,000 to $2,000. Using utilization data, Sullivan identified excess inventory and rentals the staff lost. The reduction in leases and capital expenditure on new infusion pumps saved $450,000 for the health system in 2008.

With the initial success, more mobile assets were tagged. Tagging wheelchairs, for example, led to a decrease in theft rate. In the operating room, sterilized RFID tags placed on instrument trays led to a 20 percent reduction in equipment-related delays, saving $25,200 per month with an average search for equipment being reduced from 20 to three minutes. With 2,311 searches in October 2009 alone, a time savings of 655 hours was realized. At $20 an hour, the savings amounted to $13,100 in reallocated staff time. As of 2010, four UC San Diego facilities use RFID technology on 5,000 assets.

The Potential of RFID

RFID technology primarily tracks mobile inventory. It can also track patients to prevent long, unpredictable wait times. According to a report by the U.S. Government Accountability Office on hospital emergency departments (ED), the average wait time to see a physician for emergent patients — those who should be seen in one to 14 minutes — was 37 minutes in 2006, more than twice as long as recommended for their level of urgency.2 The National Health Statistics Reports stated, from 1996 through 2006, the annual number of ED visits increased from 90.3 million to 119.2 million visits. As the number of visits to the ED has increased, the number of hospital EDs has decreased from 4,019 to 3,833, thus increasing the annual number of visits per ED.3 The result is excessively long queues in the emergency room (ER) potentially leading to tragedies such as the death of Michael Herrera in 2008 who died of a heart attack in the waiting room 19 hours after arriving at an ED in Dallas.4

Misfortunes such as Herrera’s death create more support for change. But is the ED problem a lack of capacity, poor scheduling or both? The solution begins with using hundreds of hours to gather the information necessary to analyze patient flow. The data gathering is time consuming because of the variability in patient arrivals and steps involved. Data must be averaged to isolate demand spikes and shifting bottlenecks. Once a bottleneck is identified and addressed, the analysis is repeated to measure for improvement. It is here where RFID can curtail labor time required for data gathering.

If every patient wore an RFID bracelet, the health system would have complete transparency from the wait time before entering an operating room, to the visit time spent with a doctor in clinic. Once the technology is in place, the patient flow process could be continuously measured and information can be gathered without additional labor. With each process improvement, patient satisfaction will grow with decreased wait times and cost.

Sullivan believes “patient tracking” is the next step for the health system to reach higher patient process improvements. He recently completed a trial at UC San Diego Health System tracking 161 inpatient and same-day surgical patients through their entire visit. The trial revealed excessive wait times in the pre-operation area. Further exploration revealed the cause was a shortage of electrocardiogram machines. Another machine has been purchased and Sullivan’s team will soon reassess the process. He is searching for the next rate-limiting step. He believes it is staffing in the preoperative area. Here patients see a nurse, anesthesiologist and support staff with varying patient processing times. Sullivan thinks there are more areas of the health system that can benefit from RFID applications. He plans to meet with employees in other departments to identify these areas, and generate interest and enthusiasm for the new technology.

Barriers to RFID Patient Tracking

While benefits of adopting an RFID patient tracking system are numerous, there remain some prohibitive factors including expense. In addition to the price per tag, the hospital needs to blanket itself with RFID readers and create a digital map so RFID signals can be traced to hospital rooms. A large up-front investment is required if the hospital does not intend to lease the equipment and tags may get lost. A large up-front investment is required if the hospital does not intend to lease the equipment and tags may get lost. During a recent patient-tracking trial, patients left with seven out of 23 RFID bracelets. The health system is working with their RFID vendor to buy a cheaper, disposable RFID tag to solve this problem.

Another barrier is patient and employee concerns that tracking may be an invasion of privacy. For the health system’s first tracking trial, patients signed a consent form to participate. Patients were more inclined to participate when informed that the RFID tags do not transmit their medical information, can be used for safety measures and help the health system improve care. Employees were not as willing to participate amid concerns by some nurses and staff that their behavior would be scrutinized. As a result, the next phase of trials will not include employee tracking. But Sullivan feels that if employee RFID tracking were implemented, a policy must prevent RFID data from being used for disciplinary action.

Despite drawbacks, RFID technology has the potential to make the patient flow process transparent and simplified. As more hospitals adopt the technology and improve their operating efficiency, administrators may be able to pull the reins on escalating health care costs. Hospital systems can then focus on operational innovation, maintaining the cost savings over time. Most importantly, the technology will improve patient care and satisfaction.


1Scott Sullivan, MBA, department business officer for Perioperative Services and Imaging at UC San Diego Health System, Personal Interview, 5 March 2010

2United States Government Accountability Office. (2009). Hospital Emergency Departments, Crowding Continues to Occur, and Some Patients Wait Longer than Recommended Time Frames. Retrieved from

3National Health Statistics Reports. (2008). National Hospital Ambulatory Medical Care Survey: 2006 Emergency Department Summary. Retrieved from

4Cox, Lauren (2008, September 25). ER Death Points to Growing Wait-Time Problem. ABC News. Retrieved from

Peter Phung (’11) is a Rady School MBA student and medical student at St. George's University. He obtained his bachelor's degree in information and computer science at UC Irvine and is interested in integrating information technology into health care.

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