PNS193 MODELING ADOPTION AND OPTIMIZATION OF AUTOMATION SUPPLY CHAIN MANAGEMENT TECHNOLOGY WITH RFID (UHF) IN THE US ACUTE HOSPITAL SETTING

Abstract

US hospital supply expenditures range from 15% - 40% of total hospital expenditures, depending on case-mix and hospital operating status. Economic modeling investigated the operational and organizational management of hospital supplies across procedural and nursing care areas for two scenarios; (1) manual or no technology to automated supply management technology and (2) automated technology optimized with RFID (UHF) capabilities. A literature analysis was performed using PubMed and Google from 2008 to 2018 with 38 relevant articles identified. Hospital supplies are managed and, or reimbursed differently, therefore five clinical settings were defined and modeled separately; operating room (OR), cardiac catheter lab (CCL), interventional radiology (RAD), emergency department (ED) and all other nursing care areas (NCAs). An average 300-bed hospital facility was estimated to have (10) OR suites, (2) CCL, (1) RAD, (1) ED and other NCAs. Technology acquisition and hospital implementation costs were also included for this analysis. The following benefits ranges were modeled; 3 - 10% utilization reduction on supply spend, 25% range of average missed changes captured to realize billable revenue and a one-time on-hand inventory optimization (10-12%). Data inputs came from literature, Definitive Healthcare, American Hospital Directory (reimbursement payer mix), and real-world practice engagements. Total hospital-system supply expenses estimated for the base-case was $23.9M and $1.9B annual revenue. Scenario 1 (automation adoption) resulted in $3.45M annual benefit. Technology adoption costs estimated at $290K/year. ROI break-even point at 6 months. Scenario 2 (RFID optimization) resulted in $1.34M annual benefit. Additional technology adoption costs estimated at $36K/year. ROI break-even point was 7 months. Hospital supply expenses represent significant costs for hospital systems, and supply management, from procurement to reimbursement, is complex. Hospital systems may engage a multi-year journey to adopt best practices, policies and technology requiring subsequently optimization at the device, staff or data management level to fully realize expected benefits.