In the world of logistics, the promised pay-off for passive RFID adoption has always been item level tagging. Conveniently, the ability to do item level tagging (which is mostly driven by cost) has always been just a few years out. Well, the technology is maturing, prices are falling, and the barriers to item level tagging are falling - except now it's starting to look like buyers are leery of taking the item level tagging plung (witness this "alternative" to RFID here). Some of the intractable problems facing current passive RFID tech includes the inability to read tags on metal items, inside metal cases (or shelves, cabinets, etc.), or tags in/on or close to fluids (not to mention the problem with 10-30% reading error rates).

So, what's an RFID vendor to do? How about look for a new vertical market? This story in BusinessWeek describes the above problems and mentions health care as an RFID market that shows continued strength.

The story mentions the usual suspects for RFID adoption in health care: asset tracking, drug tracking and counterfeiting, and meds administration. Boston's Beth Israel Deaconess and CIO Dr. John Halamka are profiled in the story. Halamka describes their asset tracking application using $50 active tags and a WiFi based RTLS (real time location system). Savings at Beth Israel in reduced equipment losses were pegged at $600,000 per year.

Another plus for the medical center: Equipment that's
not being hidden away is more likely to get maximum use and doesn't
need to be overstocked. Halamka estimates that the hospital will save
$1 million to $2 million this year because it doesn't need to buy extra
devices. "It's the kind of investment that pays for itself within a
year," he says.

Much more interesting are applications that support the delivery of complex health care services like surgery or patient care in the emergency department. These types of apps can deliver reduced operating costs and increased revenue. Unfortunately this story doesn't get around to these applications.

Pictured right is Halamka reading his VeriChip sign of the beast RFID tag, apparently just after it was inserted in his upper arm.