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Q&A with Patrick Flaherty, vice president of operations for BioTronics at UPMC

by Sean Ruck, Contributing Editor | November 12, 2018
From the November 2018 issue of HealthCare Business News magazine

HCB News: What role are you being asked to play in hospital cybersecurity?
PF: That’s an increasing role. IT here publishes a standard. They issue audits and risk audits on virtually every kind of cybersecurity threat. So every user gets audited on that standard. The problem I have with that [is that] I can have a standard, but as long as the supplier community does not offer a compliant solution, the standard is meaningless. So increasingly, the IT department is asking me to be more responsible, not less. I do not control laboratory equipment, for example, and they want me to now extend my control into the laboratory space because that is a space that is even more difficult as it relates to cybersecurity.

HCB News: Are you satisfied with the data you are generating for asset management?
PF: We are actually increasing the quality of the data. So UPMC has a group called Pensiamo. It was a wholly-owned division of UPMC supply chain, but it is an analytics department that uses artificial intelligence, machine learning, ETL, every tool available in order to create cognitive and predictive analytics. We are running our proprietary CMMS data, so we use our homegrown data. And we are using that to create a cognitive analytics platform for clinical medical equipment.

The data we have is robust, and because of the nature of clinical medical equipment, it needs to be longitudinal. We have three and a half decades of longitudinal information, whereas most organizations do not. The data is normalized and captured at the individual asset level, so we have very specific and very broad information. That fleet management process that I described earlier uses a proprietary algorithm that we created, which we call a replacement priority value.

HCBN: Are you happy with the relationship you have with OEMs? How could it be improved?
PF: It’s transactional, by and large. The problem we have on the clinical medical equipment side is that in a fee-for-service world on the diagnostic imaging side, all you did was turn the thing on and you got paid for using it. There’s really no connection, certainly no evidence of connection between the use of a piece of equipment and the value it creates. It’s very difficult to get an evidence-based set of information which would allow you to evaluate the value generation of a piece of equipment, and that’s a problem.

For the most part, every one of the diagnostic imaging equipment manufacturers is driving 30 to 55 percent margin on this equipment, and then that price point is used to establish the full service contract that they sell at a percentage of acquisition cost. You have an inflated acquisition cost which is not based on any rational connection to margin or value for the customers and it’s compounded that they’re using that acquisition cost to establish a service cost that is also designed to excessively drive margin to the OEM.

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