SAN DIEGO – For the healthcare industry, real-time location system (RTLS) technology represents one of the most useful and potentially transformative tools for patient safety and cost reduction. It also remains one of the most under-penetrated health IT markets.
Using a series of tags and wireless signals to determine an object's – or a person's – location at any given moment, RTLS is used primarily in asset tracking, but can be put to use to keep tabs on everything from patient flow to temperature monitoring to hygiene compliance.
Those chips hold huge potential for reaping enormous cost savings and vastly improving patient safety. But so far, some analysts estimate, market penetration remains as low as 10 percent.
Moreover, according to a 2009 KLAS study, most providers that do use RTLS are putting it to department-specific uses. Just a handful are achieving the true potential of enterprise-wide implementation. And more than half of those surveyed are unfamiliar with the technology.
“Ultimately, providers need to be more educated about RTLS before it can really take off,” KLAS research director Steve Van Wagenen said.
But those numbers have been on the upswing over the past couple years. "This market is starting to pick up in speed," said Jay Deady, CEO of San Diego-based Awarepoint, which installs ZigBee-based RTLS and "enterprise awareness" technology at nearly 100 hospitals nationwide.
Deady took the reins at Awarepoint in late 2010. Prior to that, he was an executive at McKesson and, more recently, Eclipsys. If he's learned anything over his 20 years in health IT, he said, having seen "the consolidation that occurred in the EMR market and how hospitals' expectations evolved," it's that, when looking at "90 percent-plus market share being open" in the RTLS sector, "trying to be a one-trick pony, and not a solutions provider, would probably not be the optimal way to end up as one of the companies that's leading the industry."
That's why Awarepoint announced in April its acquisition of Charlotte, N.C.-based Patient Care Technology Systems (PCTS) for an undisclosed sum. The combo of Awarepoint's technology platform with PCTS' software and clinical apps will make for an enterprise-wide RTLS solution that will help the firm "capitalize on an enormous untapped market," said Deady.
The deal was driven, in part, by clients who were early RTLS adopters and were "ready to do more and leverage the assets," he said. "I got the sense they wanted to do more sooner rather than later," but "it was going to take at least 18-24 months of use to do that ourselves."
PCTS can help bolster Awarepoint as it works to raise the bar for those out-front leaders – seeking to move past mere asset management to patient tracking, temperature monitoring and beyond – while also courting new clients who are RTLS novices, said Deady.
What's more, the two firms' complementary strengths will help enable the exchange of RTLS data with HIEs, EHRs, CDS systems and more – sure to be a burgeoning need going forward.
"Some of the EMR players are starting to change their architecture, to take real-time feeds," said Deady. He notes that one vendor in particular has switched the software showing for patient location from being a static field to one that can be dynamically updated by an RTLS system.
If RTLS firms can "add significant value" to EMR systems that hospitals have "invested tens or hundreds of millions of dollars in already, the whole value proposition of our industry goes up exponentially," he said.
Indeed, says Doug Burgum, interim CEO of Fargo, N.D.-based "enterprise visibility" firm Intelligent InSites, what RTLS vendors "have to do as an industry" is to help providers understand that "we can take and push data to EHRs. We can save time on manual entry. We can provide information real time. We can shorten time from admission to discharge and increase employee satisfaction."
Eventually, "coming off the backside of that EHR stuff, there's going to be an explosion in this space," he said.
Burgum took over at Intelligent InSights in January from the firm's co-founder and CEO, Mark Rheault.
"Mark did a fantastic job, along with our other two founders," he said, noting that Rheault is still a shareholder, maintains a consulting role and remains "very engaged in the company."
But, says Burgum, who previously helmed Great Plains Software, a mid-sized firm that was acquired a decade ago by Microsoft, where he became senior vice president of the Business Solutions group, "we were at that natural leadership transition point in our growth where we needed to think about getting a CEO involved that has scaled to a much higher level."
Because, he said, "we think there's a very large opportunity here in the marketplace. Not only for our company, but for the RTLS segment. I think there's a very bright future."
As a relative "outsider" to healthcare, Burgum said he sometimes can't believe what he sees in hospitals. It's "sort of stunning, the level of inefficiencies that exist around basic operational activities," he said. He said he's seen facilities that have two, even three times as many medical devices as they should.
Other industries would never allow that. "There's not a chance in the world that there's a manufacturing plant out there that has three times as much equipment as it needs," he said.
So, he said, "there's an enormous amount of low hanging fruit" – not just for the obvious cost savings, but also for happier workplaces. "If you're a nurse in an acute care facility, and you spend up to two hours in an eight-hour shift looking for something, that's not probably why you got into nursing."
But beyond the fast ROI of asset tracking – the "beachhead solution" for organizations new to RTLS, Burgum calls it – there's so much more: alerts, inventory management, hand-washing compliance, infraction control, bed management, patient flow, and more.
All those applications of an enterprise-wide implementation are appealing to newly constructed facilities, some of which are being conceived as "hospitals of the future," said Burgum.
But even for existing hospitals, he said he sees a shift where they're going beyond simple asset tracking in the OR or ED, and "as the price of the hardware comes down, and the systems become more precise and the tags more efficient, there's going be a focus to retrofit."
Long-term, "that's where the industry is headed," he said. "Costs are coming down." And the savings and improvements speak for themselves. "When you start having an impact on patient flow, if you can reduce a hospital visit by a half a day, the system-wide savings, to the entire country, are dramatic."