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August 14, 2025 / August 14, 2025 by Gina Breckenridge | Leave a comment
A 2025 American Hospital Association (AHA) report highlights a growing crisis: many U.S. hospitals are struggling to keep their doors open. While staffing shortages and policy shifts play a role, rising costs and supply chain disruptions are also key contributors. To deliver consistent, high-quality care, hospitals need accurate tools to manage their inventory. However, many still rely on outdated, manual inventory systems. These systems are challenging to maintain and prone to human error, putting both operations and patient safety at risk. Poor inventory management doesn’t just hurt hospitals—it ripples outward, affecting the production and availability of life-saving medications across the healthcare system. This article explores key breakdowns in the healthcare supply chain and how RFID technology can proactively address them while mitigating greater economic risk.
Hospital inventory ordering is often a manual, subjective process. To prepare for unexpected demand or supply chain delays, staff frequently over-order medications in case of an unpredictable supply chain disruption, surges in demand for a particular drug, or a natural disaster. Over-ordering is known as stockpiling and can lead to waste and, ironically, shortages elsewhere.
An underlying part of the inventory challenge is the inventory management systems used across a hospital. It isn’t uncommon for different departments to use distinct systems that aren’t interoperable, which means they aren’t able to “speak” to each other. These disconnected management systems only add to the challenge of managing inventory because visibility across departments isn’t unified. With no single source of truth, hospitals must often guess what’s needed.When a hospital over-orders medications, it can end up with more inventory on-hand than it can use in the near term. This can increase the risk that a medication or product will expire before it can be given to a patient or increase requirements for already-limited on-site storage.
In addition to inefficient ordering practices, limited visibility into the physical location and status of medications can create inventory management efficiencies. When hospital staff can’t easily track where medications are or how much is available, critical gaps can emerge that put patients in harm’s way. For example, expired drugs sitting in crash carts may go unnoticed until a life-or-death emergency. Alternatively, when drugs are limited in supply, visibility into the location of a drug can help departments share supplies to avoid a stockout.Both medication shortages and surpluses can negatively impact hospital inventory management and operations. A surplus, or too much of a drug, can create a significant financial burden for health systems and create waste. According to the Biomedical and Pharmacology Journal, tons of municipal solid waste are generated due to expired and unused drugs.There are two primary reasons medication waste is particularly costly. Depending on the drug, there are varying disposal costs and compliance procedures that must be followed to ensure safety and prevent community health hazards (e.g., proper disposal of syringes and half-filled vials). When medications expire before they can be given to patients, not only must the medications be disposed of, but hospitals are on the hook for the overall cost. On the opposite end of the spectrum to surpluses are shortages and stockouts. A stockout occurs when medications or supplies are not available for complex surgeries or routine patient care. Running out of a medication can pressure pharmacists and physicians to find alternatives or force last-minute purchases at higher prices. Stockouts can also compromise patient care and day-to-day clinical operations, particularly when procedures or treatment plans must be changed to accommodate. Common shortages include antibiotics, IVs, blood thinners, cancer treatments, and even surgical gloves. What are the results of these hospital inventory inefficiencies? Rising costs and diminished patient safety.
Luckily, technological advancements are being developed that can solve these problems. For example, RFID technology can provide hospitals with a scalable solution to inefficient inventory management systems. The use of RFID in medication and supply chain management is already being adopted regularly by hospitals nationwide, and we expect it to increase year over year. Here’s a closer look at how it works:
Aside from optimizing pharmacy workflows, these intelligent inventory tracking systems can have significant financial impact. Hospitals using RFID inventory systems have reported significant operational and financial improvements, such as:
Inefficient inventory management adds to the financial strain many hospitals face. By implementing RFID-powered systems, hospitals can reduce waste, avoid stockouts, and improve patient care. As the industry shifts toward AI-powered, data-driven solutions, tools like the Intelliguard Mira Ecosystem are helping hospitals move away from guesswork and toward operational efficiency and meaningful cost savings.