8.6m in capex savings: a case study on sharing medical ...1 $8.6m in capex savings: a case study on...
TRANSCRIPT
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$8.6M in CapEx Savings: A Case Study on
Sharing Medical Equipment
Session 23, February 12th, 2019
Ronald Loo, M.D., Physician Co-Lead, Health Innovation Team, Kaiser Permanente
Todd Rothenhaus, M.D., Chief Executive Officer, Cohealo
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Ronald Loo, M.D.
Has no real or apparent conflicts of interest to report.
Conflict of Interest
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Todd Rothenhaus, M.D.
Has no real or apparent conflicts of interest to report.
Conflict of Interest
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Introductions
Ronald Loo, M.D.
Physician Co-Lead, Health
Innovation Team
Kaiser Permanente, SCPMG
Todd Rothenhaus, M.D.
Chief Executive Officer
Cohealo, Inc.
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• Learning objectives
• The imperative to share
• Equipment sharing at Kaiser Permanente
• Overcoming objections to equipment sharing
• The return on investment from sharing
Introducing the sharing economy
to healthcare
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• Discuss the supply chain challenges that Kaiser Permanente faced
around equipment management, budgeting and access and how they
were inspired by companies like Uber and Airbnb to solve those
challenges by sharing medical equipment between facilities
• Identify the internal resources needed for a health system to implement
an equipment sharing pilot, including the criteria for selecting the service
lines, equipment and facilities for participation
• Analyze the ROI model developed by Kaiser Permanente and Cohealo
on the value of sharing equipment, including how financial outcomes
such as rental reduction and capital expense avoidance from
sharing/collective purchasing can be factored into calculations
Learning Objectives
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The growing sharing economy
In the past decade, the sharing economy has exploded:
Share your car Share your home Share your office
Uber Airbnb WeWork
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A massive imperative to share
Surgical
procedures
moving outside
the hospital
Reimbursement
is decreasing,
but fixed costs
remain
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A massive imperative to share
Surgical
procedures
moving outside
the hospital
Reimbursement
is decreasing,
but fixed costs
remain
Hospitals must
improve utilization of
space, equipment, and
personnel
Mobilizing idle equipment improves operating margin
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About Kaiser Permanente (KP) SoCal
• 15 hospitals
• 231 medical
offices
• 7,421 physicians
• 70 years of
innovation
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Why equipment sharing at KP?
Value for the Facility
• KP as good steward of
members’ funds
• Improve asset utilization
• Data-driven investments
• Expand service lines
independent of inventory
location
Value for the OR
• More efficient than renting
• More requests than budget
• Newest equipment =
happy surgeons
• Non-payroll savings
• Not rentable? Maybe
shareable
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The path to “Dark Green Money”
Savings or revenue that is
immediately quantifiable
$ $$ $$$
Sharing
instead of
renting or
buying
Collaborative
purchases
Prevent
equipment-
related case
delays
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It all began with “Loo Haul”
Started with a Shockwave Lithotripsy Machine – a $450K
purchase shared between 5 hospitals
Prove sharing is
feasible
Reframe equipment as
network resource
Eliminate rentals
Net payback – 1 year
Program Goals
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Grassroots innovation to scaled pilot program
5Facilities
5Facilities
1Service
Lines
1Service
Lines
UrologyUrology
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9Facilities
9Facilities
4Service
Lines
4Service
Lines
Head & Neck
General Surgery
Orthopedics
Head & Neck
General Surgery
Orthopedics
Scaled pilot program to a sharing ecosystem
UrologyUrology
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9Facilities
9Facilities
9Service
Lines
9Service
Lines
Gynecology
Ophthalmology
Plastics
Podiatry
Vascular
Gynecology
Ophthalmology
Plastics
Podiatry
Vascular
Growing the sharing ecosystem across KP SoCal
Head & Neck
General Surgery
Orthopedics
Head & Neck
General Surgery
OrthopedicsUrologyUrology
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Year 1 KP Exchange results
Facilities &
service linesDecrease
in rental volumeIdentified
network savings
2/3
Scaling Efficiency Savings Growth
9 49% $4.2MIdentified
capital requests
for sharing
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Overcoming resistance to sharing
“Sharing will be a lot of work.”
“I might have to cancel a case.”
“What if equipment is damaged?”
“Will my equipment be constantly moving?”
“Patient will be negatively impacted.”
“Equipment won’t be available when
I need it.”
“Equipment won’t be returned to
my operating room.”
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Basic human values at work
Trust
Willingness to Share
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KP leveraged automation to make sharing easy.
Sharing requires minimal work
Phase I: “Loo
Haul”
Phase II:
Milk RoutePhase III:
On-demand
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How sharing works
Scheduling platform
Adopted by KP biomed and OR directors
Equipment analytics Moving Logistics
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20% of equipment = 80% of value
Maximum value
with minimal
moves
Cases covered
per move
Expensive
equipment
$90K
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Proper planning reduces risk
• Insurance of $1M+
• Movability risk analysis
• Identify non-sharable assets
• Systematic moving process
Risk Factors Plan for Success
• Damaged equipment
• Sharing highly risky assets
• Efficiently tracking & returning
equipment
Outcomes In 3 years, only two damages
Repair costs covered
No cases cancelled or delayed
KP’s Outcomes
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2017 2018 2019
Requests (%) Requests Met by Sharing (%)
24%
76%91%
82%
The KP Exchange today
Identified Savings
$11M
9%
18%
22Facilities
4,875 Equipment
in platform
10Service lines
$4.4M
$4.2M
91%
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Collaborative purchases
AcuPulse Duo VersaPulse 100W
$1M invested with 3-5X in returns
EuroNav
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The next frontier of savings
Specialty bed management Radiology equipment
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Continued areas for growth
New
regions
New care
venues
New
equipment
types &
service lines
ASCs, Medical Office
Buildings, etc.
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Questions?
Ronald Loo, M.D.
Todd Rothenhaus, M.D.
kaiserpermanente.org
@kpshare
cohealo.com
@cohealo