Guiding capital equipment procurement with MCDA

Guiding capital equipment procurement with MCDA

February 23, 2020
HTM
From the March 2020 issue of HealthCare Business News magazine

By Joseph Gucciardi

In their efforts to improve patient care, today’s healthcare providers are hindered by consistently diminishing capital budgets and often struggle to prioritize their needs.
In many cases, a methodology know as Multicriteria Decision Analysis (MCDA) can transform the decision-making process in a robust and innovative way, all the while incorporating strategic goals through tested and proven data analytics.

In their simplest form, MCDA problems all have the same basic components: alternatives for which a choice must be made, criteria to differentiate the alternatives, weights that scale criteria importance, and a methodology for ranking the alternatives. Capital procurement options can be prioritized by an analytical model utilizing criteria defined by your organizational stakeholders to facilitate traceable and repeatable decisions. This is preferable to cost benefit analysis, as equipment criteria are notoriously difficult to reduce to sum of specific costs. With MCDA, each criterion can be kept in its natural format so that their true value to the decision can be accurately determined.

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Framework steps
MCDA methods vary greatly depending on the application. They can be found through open sources, developed in-house, purchased as software or outsourced to a decision-support vendor. The simplest framework consists of eight primary steps:
1. Thoroughly define the objective of your analysis.
2. Identify stakeholders necessary to inform the decision.
3. Define and select criteria, either through organizational goals or alternative analysis.
4. Identify where critical data is available (Hint: CMMS!), addressing data gaps and collection methods.
5. Determine how the criteria will be weighted, whether through a robust MCDA technique or a simple vote.
6. Analyze the alternatives by their criteria using MCDA methods or a combination of methods.
7. Calculate the weighed score for each alternative and prioritize the alternatives by their score.
8. Review the model validity and revise to meet your organization’s needs.

Criteria selection and weighting
Criteria may be easy to list: Strategic Direction, Obsolescence, Safety, Value, Integrability, Risk, etc. The difficulty comes in quantifying these to determine their weighted value to the organization. Where is the data coming from, and what if the criteria are conflicting, such as cost versus quality? Are the criteria “SMART”, as in specific, measurable, attainable, relevant and time-bound? Which criteria are relevant, which are redundant, and which reduce the analytical burden? Discard low impact criteria and keep the criteria deemed most important. One can further trim criterion using MCDA.

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