MENLO PARK, CA – What's good for the Wal-Mart warehouse is not necessarily right for the hospital supply room, a recent study from Spyglass Consulting Group concluded.

The study revealed less than 23 percent of RFID solutions implemented by healthcare organizations are using passive RFID technology, the type used in retail warehouses.

"Passive RFID is not ready for prime time," said Gregg Malkary, founder and managing director of Spyglass, a market research firm that focuses on wireless technologies within the healthcare industry.

The "Healthcare Without Bonds: Trends in RFID" study found that many healthcare organizations are investing in active RFID technology instead of passive RFID. In an active RFID application, signals are continuously transmitted between transponders and transceivers. Passive RFID systems require a reader to be waved near a transponder with an RFID chip.

Spyglass interviewed more than 100 healthcare organization professionals. Many said they do not see a strong business case for passive RFID. The reasons cited include a lack of industrywide standards, cheaper alternative solutions based on bar coding and a lack of government or regulatory mandates.

"Bar coding solutions are cheaper to deploy," Malkary said.

The study found that many healthcare organizations hope to use active RFID systems to track patients, staff and assets across their enterprise. Malkary expects the number of healthcare organizations using RFID to grow by 128 percent during the next 18 months.

However, the Spyglass study also found that many healthcare organizations are concerned about the network infrastructure, scalability, integration capability and application availability of current RFID technology.

Healthcare organizations want to be able to use existing wireless networks rather than a dedicated RFID network for tracking, Malkary said."What we really need to have is operational research," he added. Malkary said the RFID study was done to get beyond the hype.

The Spyglass study does not peg the potential size of the healthcare market for RFID.

However, an industry study conducted earlier this year by Bradley Sokol, principal of Fast Track Technologies, predicted RFID and related technologies in the U.S. hospital marketplace will skyrocket to $8.8 billion by 2010.

The study, entitled "RFID & Emerging Technologies Guide to Healthcare," shows the market will be segmented into three general categories.

RFID driven revenue, including hardware and software integration, will total $1.3 billion; infrastructure support for RFID enablement, in the form of wireless networks will reach $1.3 billion; and spending on enterprise-related software will total $1.4 billion.

In addition, spending on hospital connectivity is expected to hit $4.8 billion.