Cardinal Health buys into RFID-based inventory tracking for hospital supplies

At this week’s HIMSS meeting (Feb. 23-26), Cardinal Health announced the acquisition of WaveMark (Concord, MA), a company that has been commercializing tags, cabinets and software for tracking inventory of consumable goods in hospitals for the past decade. Jean Claude Saghbini, former CTO of Wavemark, will become GM of the newly formed Cardinal Health Inventory Management Solutions (CIMS) busness.

Although not exclusively based on radio-frequency identification (RFID) technology, Wavemark’s core technology uses that form of labeling products—in this case, med-surg kits, high-end medical devices like implants and the like—with a tag that can be tracked, wirelessly and automatically, through stockrooms, storage cabinets, mobile stations and so forth, even to the point of care. Barcode technology is deployed for low-end consumables like gloves or bandages, and a “kanban” system is in place to automatically track when bins of these low-end products are consumed. A cloud-based IT platform tracks inventory, expiration dates, product movement and other parameters to enable closer control of hospital stocks and purchases. A case study for Florida Hospital (Orlando) found $1.8-million savings for nearly 7500 stockkeeping units in a year at selected care suites in the facility. Saghbini says that already, 4 of the top 10 medical device manufacturers use Wavemark technology, and it is being deployed in 40 countries.

RFID technology had its moment in the sun in pharma distribution, but a combination of cost, technology maturity and lack of uniform regulatory standards swung the industry toward barcode technology, which is now codified in the Drug Quality and Security Act (pharma can opt to use RFID, but almost no one is planning to). On a parallel track, the medical device industry is now formalizing its Universal Device Identifier (UDI) standards—also a matter of FDA policy—so that certain medical devices will be tracked at the item level. Saghbini says that CIMS will be fully compliant with the UDI directives as they are established.