Get more value from your medical equipment budget
February 14, 2020
By Al Gresch
With healthcare margins under constant pressure, and expense rates growing faster than revenue, hospitals are eager to save some of their $93 billion annual spending on medical equipment. According to some estimates, potential cost savings of between 12 and 16 percent can be missed due to a lack of accurate information, internal resources, bandwidth, and specialized expertise.
I’ve spent my career developing strategies for HTM organizations to move from basic preventive maintenance/break-fix operations to proactive, best-in-class programs. When asked what to do first, I typically recommend the following actions to improve efficiency, save cost, enhance compliance, and improve patient care.
1. Establish structural data integrity
The first step is to simply have better data. Most healthcare groups usually have a hodgepodge of nomenclature and data systems, which prevents analytics-based improvement.
The solution is to develop a consistent methodology for having accurate data for equipment, regardless of department or location. Then, define the “transforms” that map vernacular terms used by staff into specific standards and precise terms you’ve defined for equipment type, manufacturer, and model. For example, when a nurse requests a new “infusion brain”, your system should deconstruct that into the accurate terms for category (i.e., pump), type (i.e., infusion), manufacturer, and model.
Then, match your electronic records with what’s actually in place. A physical inventory audit might be necessary, and inventory data collection down to specific locations can be automated with RFID tags. Also, be sure your standardized HTM codes are populated into your Computerized Maintenance Management System (CMMS). This enables benchmarking of what service staff is doing so analytics can identify efficiency opportunities.
2. Centralize and standardize policies and procedures
The next wave of value comes from getting everyone to use the system the same way. Stakeholders from across the organization should be brought into the creation process, to ensure their needs are met. Then, document the standards and provide training. Be sure to address how permissions are granted for system access, and how security is maintained by tier, role, and individual.
Control costs by defining how equipment or service requests can be made, and how those requests are routed. Establish closed-loop visibility so stakeholders know the status of orders and requests.
3. Manage parts and supplies inventories
A third opportunity is the spending on parts and supplies. Make sure they’re included in the data standardization outlined above. Then your system can track usage and inventory across the organization, revealing consolidation opportunities.
Next, centralize parts procurement. Hire or deploy existing staff solely for HTM parts and supplies, or partner with an outside entity that specializes in it. When organizations have NOT centralized the parts function, each technician can end up spending an hour per day, or more, in parts procurement. It’s simply not a good use of their time, especially given the ever-declining pool of HTM technicians.
A centralized parts group can institute quality ratings for the parts and vendors provided to them. Monitoring dead-on-arrival rates, late deliveries, and wrong part deliveries can help weed out bad apples that cause rework, downtime, and degraded patient care.
4. Track and rationalize third-party services
Waste in HTM also comes from inefficient use of contractors. Decentralized decisions can create a proliferation of companies providing warranty, extended warranty, and non-warranty service. If these aren’t tracked, technicians often won’t know if devices are under contract, and needlessly expend time and money on procedures already covered. If this occurs, your healthcare organization double-pays for the service. An automated contract management system can flag equipment under contract, provide alerts of contract expirations, and can track contractor performance against committed service levels.
5. Measure what matters
Measurement of Key Performance Indicators (KPIs) helps save cost over time. Measure and report HTM customer service in terms of response times, turnaround times, and equipment uptime. Efficiency metrics should include clinical utilization, code compliance, life cycle maintenance costs, equipment’s age, and percentage of useful life. Your KPIs can align your team around what will move the needle. External KPIs help define success and show progress with your customers. Make them visible! Some organizations drive the point home with wall monitors showing real-time service metrics.
6. Plan capital replacement based on solid data
With data rationalized into centralized systems, you can get more mileage out of funds available for replacement equipment. Your systems can feed a capital planning tool using criteria agreed upon by all key stakeholders. Your portfolio can be evaluated on a common scoring system that includes age, service history, maintenance costs, regulatory exposure, and projected clinical and financial risks, should the equipment fail.
There’s never enough capital funding to get all the HTM equipment you need. By bringing objective data to bear, a rational methodology can show what really must be replaced. Adjustments like these can get the HTM team to the decision-making table and help the capital planning and supply chain teams make better decisions.
About the author: Alan Gresch is vice president of customer success for healthcare at Accruent, the world’s leading provider of physical resource management solutions.