Materials departments scratching surface of wireless potential - News on the Cover

Long before physicians could view X-rays, review medical records or write prescriptions on personal digital assistants (PDAs), purchasing departments in hospitals were dabbling in wireless technologies designed to un-tether receiving and inventory count clerks from the arduous chore of manually inputting supply data.

As ubiquitous as the handheld bar code scanner has become in today's hospital, however, that's about as sophisticated as most materials management departments have become in the field of wireless. Some say that may be as sophisticated as hospitals need to be. Others insist that materials managers are just now beginning to tap the incredible power of wireless applications.

Ironically, the explosion of wireless devices on the clinical side may be laying the foundation for just that, as hospitals begin realizing the broader potential of the wireless networks they've built to support this new technology.

With so much scrutiny these days on patient safety, medical errors and privacy issues, it's no wonder that the current thrust of innovation in wireless technology is focusing on patient care, and not so much the bottom line. Consider a recent survey by the Healthcare Information mad Management Systems Society (HIMSS), which listed computer-based physician order entry (CPOE) as the most important IT application healthcare organizations will implement in the next two years. In fact, today's progressive hospitals often encourage physicians to enter medical orders on tablet PCs and review medical images wirelessly, advise nurses to match patients with prescriptions, and ask patients to register, order meals and learn about their diseases through the Internet.

Wireless workhorses

For several years, wireless devices such as handheld PCs doubling as scanners have become prevalent in hospital storeroom and receiving docks. These devices have evolved from large clunky machines the size of clipboards to very powerful, very small computers. In tandem with bar coding these devices have helped hospitals streamline their purchasing functions and workforces. Many experts agree that wireless devices also significantly improve accuracy by avoiding many of the mistakes of manual data entry.

Wireless devices today perform a wide variety of choices, including inventory counts, replenishment, receiving and asset management. Order entry is perhaps the most popular kind of wireless application in hospital purchasing departments. In some hospitals, wireless order entry devices are used increasingly in other areas of the hospital, giving non-purchasing personnel the ability to scan supplies as they are used, fueling both electronic reordering and accurate billing. One of the most popular is the automated supply cabinet marketed by companies such as San Diego-based Pyxis, a business unit of Cardinal Health, Dublin, OH, and Omnicell, Palo Alto, CA.

The OR may be the next proving ground for wireless materials management applications. In many facilities, the OR generates as much as 40 percent of an organization's revenues, yet may be one of the most underutilized areas. Often, overly lengthy case times in the OR can be attributed to missing supplies and equipment. Wireless materials management applications have great potential to change that, says Todd Tabel, vice president of marketing for McKesson Information Solutions, Alpharetta, GA. "The OR is one of the best places in the hospital to make use of wireless point-of-use applications to facilitate rapid product location of physician preference items, therapeutic equivalents, or pharmaceuticals," Tabel said. "Wireless applications have the potential to significantly increase or speed up the case throughput in the OR."

Wireless successes

Hospitals that have employed wireless applications for managing their supply chains have notched some early successes. Here are a few recent examples:

--Dartmouth-Hitchcock Medical Center, Lebanon, NH, hired PeopleSoft, a Pleasanton, CA-based developer of Web-based supply chain software applications, to standardize its materials management business processes. Among the enhancements the facility put in were handheld devices nurses could use to update supply usage. The handheld devices have built-in Web browsers that, combined with the facility's wireless LAN infrastructure, connect them directly to up to the minute inventory information in PeopleSoft. Thanks at least in part to that system, Dartmouth-Hitchcock was able to reduce its inventory levels by half and consolidated 360 materials carts and 27,000 line items into a single system. "In terms of the solution's impact on the organization as a whole, we now receive a more accurate, real-time look at usage reports, which is helping to drive savings through contract compliance and product standardization," said William Grimes, manager of materials management information systems, said at the time of the implementation.

--Every morning, four data collection technicians at Lahey Clinic Medical Center, Burlington, MA, embarked on their daily task of counting 65 carts, with an average of about 175 items per cart." Today, those technicians use Intermec Janus 2020 portable handheld computers to collect the data. When they complete their counts, the technicians return to central processing, where they dock the handhelds and upload to a database developed by PeopleSoft. The PeopleSoft enterprise resource planning (ERP) system automates the rest of the replenishment process, creating pick lists and balancing inventories. The system even prepares purchase orders as necessary. "It all starts with a handheld computer. It's more efficient and reduces costs," said Martin Moriarty, materials management information systems administrator. "We receive and issue supplies in a just-in-time environment."

--At HCA, the big Nashville-based hospital chian, materials management staff manually printed product labels, applied labels to each individual product, and transported supplies to each department. Every time a product was used, the caregiver peeled the label off the product, and placed it onto a patient's charge card. "Our manual stickering process was very labor intensive and contained opportunities for errors, including placing the wrong sticker on a product, not stickering the product, or putting the wrong sticker on the patient's card," said Ann Marr, director of order management for HCA's North Texas Division. "I had five people who spent most of their day stickering products and eyeballing inventory on floors to make sure that nurses didn't run out." HCA streamlined its supply inventory and tracking with SupplyScan, McKesson's wireless point-of-use supply management system.

Slow adopters

Even when such successes are self-evident, purchasing departments have been slow to adopt may new technology, including wireless. To understand why wireless applications are not more widespread in hospital purchasing departments today, one only has to consider how long it has taken for bar coding to catch on. According to HIMSS, only 40 percent of hospitals today use bar coding for supply chain or materials management. So it's no surprise that fewer than 25 percent of hospital IT executives surveyed by HIMSS indicated their facilities would implement wireless systems or networks over the next two years. When asked which application areas they considered most important to their facilities over the next two years, Web-based applications were named by only 38 percent of respondents, compared to 75 percent who put clinical information systems at the top of their list.

While wireless technology is revolutionizing healthcare, the advances carry a high price tag, according to Michael McNeal, CEO of Emergin, a Boca Raton, FL-based mobile and wireless integration company. Infrastructure issues include expensive routers, modem banks, servers and systems software, as well as the devices themselves. Moreover, says McNeal, the return on investment isn't as obvious with wireless technology as it was when machines were purchased to replace workers.

Add to the list the lack of connectivity among different devices, as well as interference issues. Despite their distinct frequency bands and transmission types, 802.11a and 802.11b standards can operate in reasonably close proximities without interference. This is proving beneficial for purchasing departments, which typically have differing wireless requirements, says James Placer, senior security analyst for Oak Brook, IL-based Interactive Business Systems Inc. Placer says the forthcoming 802.11i wireless security standard "will make 2003 the year that wireless is finally taken seriously at an enterprise level" in hospitals. The 802.11i standard satisfies enterprise security fears without requiting costly, complex products such as third-party virtual private networks.

Data integrity and security have been one of the biggest negatives of wireless technology in hospitals, up to now at least. And with a number of critical 2003 deadlines approaching, compliance with the Health Insurance Portability and Accountability Art of 1996, or HIPAA, remains a top concern for information technology executives. "Two years ago, this may have been a concern, but multiple solutions such as virtual private networks are available today that make it extremely difficult for anyone to hack into a wireless network and obtain confidential information," said Ray Martino, vice president, general manager, network product marketing for Symbol Technologies Inc., Holtsville, NY.

'A lot of tire kicking'

Some observers say materials managers are too comfortable with the status quo. Many, for example, don't want to see the loss of prestige and clout (and perhaps even salary) that comes with automation-facilitated staff reductions, Jim Keys, a St. Louis-based materials management/IT specialist at First Consulting Group, Long Beach, CA, said in an August 2002 Healthcare Informatics article. "So they resist implementing a comprehensive, IT-driven solution, and instead, focus on beating the vendor up for a 2 percent discount and think they're doing supply chain management. I consider those people as dinosaurs," Keys said.

Others, however, believe the tide is turning. "There's a very dramatic level of wireless interest in hospitals today. There's a lot of tire kicking going on right now," said Richard Bauly, vice president, strategy and business development for Psion Teklogix, a British-based global business-to-business provider of mobile computing solutions for healthcare and other industries.

Solutions providers

"More and more customers are requiring us to provide a much deeper level of information than ever before, and in some cases, wireless technology affords that," said Steve Inacker, vice president, distribution technology for Cardinal Healthcare's Medical Products and Services division. "We're moving toward closing the information loop between us and our customers."

Psion Teklogix and other mobile software and hardware firms such as Symbol and Intermec, consequently, are now forging partnerships with solutions providers such as San Jose, CA-based Neoforma, as well as major distributors like San Francisco-based McKesson, Cardinal Health and Owens & Minor, Richmond, VA, to provide mobile computing applications for materials management. Consider:

Neoforma--Noting that hospitals are sinking billions of dollars into handheld technology to increase efficiency, Neoforma in March launched a product that allows materials managers to work remotely using a handheld, wireless device accessed through the firm's Materials Management Solution, dubbed Neoforma MMS. The MMS works as an extension of Neoforma's browser-based solution, supports barcode technology, and allows users to complete requisitions and create purchase orders remotely. The MMS can be integrated with hospitals' existing systems, such as general ledger systems, patient billing and/or surgery scheduling systems. The new MMS product follows on the heels of Neoforma's acquisition of Revelocity, a leading developer of Web-based software products that allow hospitals and their suppliers to streamline procurement processes, manage inventories, track project and patient costs, leverage bar-coding efficiencies in internal distribution, and share replenishment demand information securely over the Internet. Steve Wigginton, marketing director, said 80 percent of Neoforma's MMS customers are using wireless devices. The Symbol-manufactured handhelds perform physical inventory counts, receiving, requisitioning, ordering, order processing, and adjustments. Neoforma also supplies wireless tablet PCs for hospital customers to use in receiving areas.

McKesson--The distribution giant has long been a pioneer in mobile computing solutions for materials management. In addition to its SupplyScan automated point-of-use supply management system, McKesson offers HorizonWP, a Web-powered array of products and services that enable organizations to access data stored in their existing systems and from other sources, McKesson's suite of "Mobility Solutions" extend application access into all care settings; the distributor says it has installed more than 185 wireless networks and more than 18,000 wireless devices. CarePoint 2000, McKesson's fifth generation of point-of-care nursing solutions, is based on radio frequency technology, and links to the healthcare organization's "wired" network infrastructure.

Cardinal Healthcare--Cardinal has long offered automated supply dispensing through its Pyxis subsidiary, as well as bedside-verification technology. Cardinal employs LXE handhelds in its 54 distribution centers for inbound receiving, inventory management, picking and shipping functions, according to Greg Volpentesta, manager, distribution systems for Cardinal's Medical Products and Services division. The scanners employ spread spectrum technology and connect wirelessly through Cardinal's internal LAN. Cardinal also supplies its ValueLink stockless customers with Symbol-manufactured handhelds. Cardinal may soon begin offering wireless PDAs for its non-acute sites to order products via the company's Web procurement portal. In June 2000, Cardinal formed Vistant Corporation to apply its Pyxis dispensing and logistics technologies and experience to factories, laboratories, research centers and production facilities. In October 2002, Vistant unveiled its IntelliStock product, a battery-operated, radio-frequency device that allows businesses to collect and communicate supply utilization information to a single source, and are Web-enabled, providing real-time inventory and usage reports.

Owens & Minor--Owens uses a platform known as OM Direct, an Internet-based system that can be used alongside wireless devices that give users the ability to employ personal digital assistant technology in combination with barcode scanners and perform tasks such as taking par levels, scanning, counting, reordering supplies and checking quantities. At the end of each workday, all the information gathered through the handheld system is plugged into a cradle and orders are instantaneously transmitted to the hospital's Owens distribution center.

Meditech--The software and services company offers a series of clinical, financial and administrative applications for use in the acute care, post-acute and ambulatory care settings, and recently began using wireless devices from Psion Teklogix to streamline its supply chain and inventory management systems.

Wireless networks: The glue

According to Emergin's McNeal, more extensive adoption of wireless devices in hospitals has been "overwhelmingly restricted to department-level purchases, primarily due to enterprise-level information technology budgets that have been significantly reduced to clear resources for needed operating expenses." To some, this strategy is shortsighted. "We look at point-of-use solutions like bar coding as an extension of a total materials management information solution," said McKesson's Tabel. "All of us need to stop perpetuating the belief that these are independent solutions."

Those solutions come in the form of networks, which are essentially the glue that holds all wireless devices together in a hospital.

Many hospitals may use wireless devices to manage inventory, but plug the devices into cradles to upload data to a materials management information system. The major drawback of data synchronization is that it does not provide real-time access to data on the information system.

Wireless Internet or wireless Web interfaces such as Neoforma's Web-based browser, allow easy upgrades, cutting implementation time. "CFOs and administrators shopping for the latest technology are also looking at labor and supply chain management," said Neoforma's Wigginton. "They need better information, a way to collect data more quickly. This is a viable option."

Wireless networks, meanwhile, allow real-time data to be shared back and forth among devices, and departments in the hospital.

Wireless local area networks (WLANs), which use radio frequency technology, transmit and receive data over the air, minimizing the need for wired connections and enabling user mobility. The wireless network typically operates as an extension of the facility's traditional wired network. According to Frost & Sullivan, WLANs, which provide increased data transference without disturbing sensitive hospital equipment, are gaining popularity and creating a strong niche in the healthcare environment. A relatively new kind of network, called Wi-Fi networks, use radio technologies called IEEE 802.11b or 802.11a to provide secure, reliable, fast wireless connectivity. A Wi-Fi network can be used to connect computers to each other, to the Internet, and to wired networks (which use IEEE 802.3 or Ethernet). Perhaps overzealously, Symbol predicts that almost every hospital will deploy a Wi-Fi network by 2007.

Many hospitals that have taken the plunge in setting up wireless networks to service clinical devices will find it easy to plug in materials applications along the way, observers say. "For any hospital that has made an investment in wireless clinical applications such as CPOE, it's not that much a leap of faith to extend that or build upon that wireless capability for supply chain management," Neoforma's Wigginton says. "It's relatively easy from a cost and integration standpoint to build on that investment for purchasing mad inventory management applications."

Symbol Technologies' Ray Martino agrees. "There are multiple returns on investment in a Wi-Fi or wireless network," Martino said. "Once a hospital invests in a wireless network, it has a huge potential for paying for itself once a wide variety of applications are put to use in materials management, nursing, patient care, patient services, etc."

Trends bear this out. The Wireless LAN Alliance, a consortium of leading worldwide suppliers of wireless local area networking products and technologies, estimates that the average time to fully pay back the initial cost of a wireless network installation is 8.9 months.

Limitless possibilities

The future of wireless applications in materials management is a future of almost boundless possibilities. "As more and more organizations realize that materials management is a strategic enabler, they will begin adopting these kinds of technologies," says McKesson's Tabel. Adds Martino, "The popularity of wireless applications in healthcare materials management is really just beginning. Hospitals are just starting to scratch the surface of their potential."

Bryan Bergeron, MD, author of The Wireless Web in Healthcare, compares the current thinking on wireless technologies in healthcare to the early days of personal computers, when some wondered if PCs would ever appear on physicians' desktops and when it was unclear what type of operating system would be used in a healthcare organization. "Back then, chief information officers had to gamble their hospital's capital on the most likely survivor, based on their understanding of low-level characteristics of the technology as well as the financial standing of the vendors, " he says. "Today, the situation is virtually identical for wireless technology.

One exciting technology just coming on the horizon in healthcare is radio frequency identification (RFID), which is already being used or tested in other industries such as retail and manufacturing. RFID tags, which employ tiny self-powered microchips the size of a grain of sand, use real-time location (RTLS) technology similar to that used by global positioning satellite devices. RFID tags, which can be affixed to products down to a unit of measure, listen for a radio query and respond by transmitting their unique ID code. In recent years, the cost of RFID tags has dropped to less than $1 per tag and is expected to continue falling as the technology takes hold.

"We describe RFID and RTLS as bar coding on steroids," said Richard Bauly of Psion Teklogix. Bauly said RFID tags could revolutionize materials management and could make even bar codes obsolete. RFID tags, he added, also could be used to easily locate equipment, increasing efficiencies even further.

John Hall is a former senior editor of Healthcare Purchasing News and a Chicago-based freelance writer specializing in healthcare.

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