We hear a lot of talk about the growing use of RFID technology in the retail space, and how you will likely be able to purchase goods without the need of going through a checkout line in the not-too-distant future. RFID is also providing retailers with much grater visibility as product moves through the complicated retail supply chain.
The use of RFID in healthcare and the pharmaceutical industry has lagged somewhat, although innovative new use cases continue to hit the market. The healthcare industry, for example, is making great use of the technology when it comes to asset tracking for better visibility of expensive medical devices throughout large hospital campuses.
As applications like these continue to grow, and return on investment becomes more attractive, RFID is set for some healthy growth in the healthcare sector. In fact, the GS1 U.S. healthcare group has identified 135 use cases throughout the healthcare industry that can benefit from the increased visibility offered by RFID.
According to the latest research from VDC Research, the use of RFID in healthcare is expected to grow 31.5 percent over the next four years. In 2011, the global healthcare industry will consume just under 150 million RFID tags. By 2015, healthcare will account for nearly half a billion in RFID tag unit shipments, a market valued at $225 million.
Compared to retail, the healthcare sector has room for some substantial growth. Driven by item level tagging in the retail supply chain, primarily for apparel goods, retail will consume 1.2 billion tags in 2011. VDC expects that number to reach 18.3 billion by 2015, when RFID becomes nearly ubiquitous in the retail sector.
It’s doubtful that the healthcare industry will approach that kind of adoption, especially since the industry is still overcoming obstacles to faster growth. Drew Nathanson, director of research operations at VDC, says one problem is that while the ROI is very well defined for many healthcare providers, longer technology adoption cycles and budget constraints have limited the growth rate.
“RFID has expanded beyond asset tracking in this market to include more advanced and deeper integration applications such as embedding a tag in medical implants and prosthetics, compliance with cleaning/sanitizing protocols, sample and document management, patient and employee tracking, asset and human association, and surgical tool and supply tracking,” says Nathanson.
At Texas Health Presbyterian Hospital in Dallas, more than 7,000 items throughout the hospital have been tagged, including IV poles, wheelchairs and hospital beds. Prior to the solution, nurses spent up to 15 percent of their time searching for critical equipment.
And by monitoring the usage of rental equipment and providing alerts when rental equipment is sitting idle, Texas Health Dallas has saved about $30,000 a month in rental savings. For years, hospitals simply threw money at the problem, buying and renting more equipment to make sure it was on hand when needed. With RFID, fiscally irresponsible purchases are becoming a thing of the past.
The same theory holds true for temperature sensitive items like drugs, orthopedic supplies, and cardiovascular products that can be stored in RFID-enabled cabinets, refrigerators and freezers like the ones manufactured by Terso Solutions. Using secure access, each inventory transaction is automatically captured and processed — in real-time. Then, data can be analyzed to track product usage, improve workflows, and make better business decisions. In addition, costly product spoilage can be avoided.
Hospitals are benefitting from other uses beyond asset tracking. For example, by placing higher-memory RFID tags on high value products, users not only gain the ability to track items, but the ability to keep track of product-specific information, such as maintenance reports and when tools were last calibrated.
As for the pharmaceutical market, much of the growth hinges on activity in the Asia Pacific region, and specifically Korea, which has mandated that half of all pharmaceutical products sold in that country carry RFID tags by the end of 2012. Many countries are watching the Korea initiative, which could lead to broader adoption of phrama tagging around the globe.
Korea alone is expected to use more than 300 million RFID tags this year. That number is expected to grow to one billion within three to five years.
Drug manufacturers are embracing RFID for its added visibility and security measures. By including RFID tags on pharma shipments, drug manufacturers can track visibility and reduce or eliminate theft and counterfeiting issues, allowing pharmacies to authenticate product before it reaches consumers.
However, growth will remain tepid in the U.S., mostly due to the high adoption of 2D barcodes and a less proactive position taken by the FDA when it comes to the use of RFID and e-pedigree programs.
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