attaining calm waters with capital equipment standards · attaining calm waters with capital...

Attaining Calm Waters with Capital Equipment Standards

WHITE PAPER

The whirlpool of vernacular surrounding the term "value based care" seems never ending. You cannot speak to anyone in healthcare these days without having the terms like "bun-dled payment" or "capitation" make their way into the conversation. Further, physicians and first-line caregivers have not only learned the verbiage, they are the ones starting the dialogue.

Indeed, gone are the times of just speculating about the impact of supply chain costs, train-ing expenses, and fungible equipment. As a country and healthcare system, the US spends over $3.35 trillion dollars a year (going past the $10K mark per person for the first time to $10,345 last year). Now, everyone from the C suite to the operating room realizes that thoughtful decisions need to be made every step of the way to bring down the cost of care as expectations to improve outcomes are being mandated from the top down.

When we say the top, we mean the highest levels of government, and one of the most obvi-ous targets for them is capital equipment. In the past, hospitals only needed to maintain inventory of items they determined to be of sufficient risk. Under the new requirements, hospitals must service all medical equipment within their organization. This factor is only compounded as the current landscape of private practices being acquired by hospitals and hospitals being acquired by even larger health systems means the sheer volume of capital equipment that needs to be centrally managed dramatically increases. This heightened visibility on capital equipment could be viewed as a burden. However, the nimble and opportune hospital will incorporate these new regulations into their value proposition when considering how to manage their capital equipment portfolio.

NATIONAL WAVES

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CHAOTIC WAVESWhen different departments utilize different capital equipment platforms, the amount of money lost is often considerable. When OB/GYN wants a particular ultrasound machine because that is what the director wanted, radiology has a certain MRI from another manu-facturer because they were specifically trained on it at the local technical college, and yet another company is providing a CT machine in the ER because it was a great deal at the time, it is easy to see how managing all of these items can be quite chaotic. The reasons stack up quickly as to how difficult this is to efficiently supervise:

Staff mobility is limited since there are so many different brands to learn. When purchasing from so many vendors, there is no volume buying power or negotiation leverage when addressing price points. When CT, MRI, and Radiology equipment is sourced from different suppliers, each must have its own individual service contracts if the hospital Biomed Team is not trained to an expert level by each manufacturer. Indirectly, patient risk may increase when clinicians use/read/interpret findings from platforms in which they are not proficiently trained.

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LEVERAGING GROUP PURCHASING ORGANIZATION (GPO), ALLIANCE, AND ORGANIZATIONAL CONTRACTS

With so much optic on the medical capital equipment program, it is imperative that a health-care practice implement and optimize an equipment standards strategy. The benefits of a smoothly running initiative allow for:

IDEAL WATERS

Standardization to one supplier can significantly maximize the cost savings opportunity for a hospital. Achieving higher tiers with reduced pricing goes a long way in future negotiations, as consistent commitment likely means improved pricing during the next contract cycle. `

STREAMLINING MAINTENANCE

By staying true to one brand of capital equipment, there are inherently fewer models to maintain and manage. This is even more advantageous for those progressive healthcare practices that deploy their own homegrown biomedical service technicians to further keep costs in check.

EDUCATION OF CLINICAL STAFF33333333333333333333333 When personnel are able to train on a specific piece of

capital and that capital is then used throughout the hospital or system, the cost of training and ongoing education dramatically goes down. This is especially true if a hospital has devised a Greenfield effort to build a program from the ground up, as standardization results in a fast track to a qualified, competent workforce.

FUNGIBILITY BETWEEN LOCATIONS 4444444444444444444444444444444444Expensive ultrasound probes not being used at one

location can easily be moved to another site if capital purchases have been standardized across a health system. This flexibility gives both personnel and management the security of knowing that high-dollar procedures will not be limited by equipment availability.

ENERGY UTILIZATION / EFFICIENCY

As much as 18% of a hospital’s energy use is due to medical equipment. By having a distinct portfolio of standardized capital equipment, management can more closely monitor and strategize for ways in which energy costs and down time can be reduced.

PLANNING FOR TECHNOLOGICAL ADVANCES

Understanding that innovations can shorten the average lifespan of certain capital equipment pieces versus how long they have historically lasted is critically important. A well run standardized capital management pathway accounts for these nuances.

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The term cross-functional could not be more important when it comes to creating the ideal team of stakeholders to manage a top-notch capital equipment standardization initiative. The key leaders necessary to create the most effective Value Analysis Team (VAT) or Proj-ect Evaluation Committee (PEC) include:

Clinical operators of the equipment. Clinical interpreters of equipment output. Information technology to interface with equipment. Building management for floor, ceiling, and space considerations. Finance division for budgeting and pro formas. Marketing representative to determine internal and external promotions. Clinical engineering to evaluate upkeep and maintenance.

It is understandable that not every clinic or hospital may be able to assemble the aforemen-tioned list of departmental champions in its entirety. At the same time, it is important to note that the more perspectives a VAT or PEC can have when making expensive capital purchase decisions, the more apt the hospital will be to fully maximize its potential and cost efficiency.

HYDRO PROPULSION: VALUE ANALYSIS TEAMS

Whereas physicians used to be the dominant and sole force in capital equipment purchas-es, their synergy with supply chain leaders in today’s accountable healthcare environment is the preferred decision scenario. A recent Deloitte Survey of U.S. Physicians revealed that 7 in 10 physicians believe that peer reviews including physician insight and evidence-based guidelines are the best practices when selecting and purchasing medical technologies. A hospital implementing a capital equipment standardization program couldn’t agree more. To go further, the important concept of “open rooming” is based on standardizing exam rooms and equipment to allow increased flexibility and fewer headaches for healthcare providers. Traditional clinics are structured so that certain exam rooms are assigned to specific physicians. The innovative design of open rooming allows any healthcare provider to use any number of exam rooms at any time they are available since they are all uniformly equipped. Standardizing all exam rooms maximizes a hospital’s ability to rotate patients into available rooms and therefore optimizes workflow and significantly lowers patient wait times.

ALIGNMENT: THE GULF STREAM (PHYSICIANS) AND HIGH TIDES (SUPPLY CHAIN)

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The first step in any capital equipment management workflow is a carefully crafted request template which makes tracking standardized vs. non-standardized purchases more visible to the VAT. Key elements in a template should include:

Contact information of requesting department or the project team. Justification and strategic goals. Financial impact and pro formas. Operational timeline. Ancillary support documents and past successes.

Ideally, these requests are made online so that all necessary fields are completed and the subsequent routing for review is properly ordered. Once submitted, the VAT will conduct a review governed by standard operating procedures and provide timely follow up.

ALL ABOARD: STANDARDIZING REQUESTS

SAFE HARBORS: LEVERAGING GPO INSIGHT

So far, the potential chaotic waves, ideal waters, and subsequent necessity of incorporat-ing a capital equipment management plan have been covered. Importantly, if a VAT has exercised good judgment throughout the capital equipment acquisition process and comes in under budget, the organization may be able to purchase equipment that had been deferred earlier in the process or replace equipment that had been planned for relocation.

FINDING THE WIND AT YOUR BACK

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With approximately 72% of hospital purchases being made through GPOs, the collabora-tion between these two entities is critically important. Every day, GPOs work hard to drive down pricing, create bulk buying opportunities, strategize rebate incentives, promote market share growth enhancements, and devise numerous other ways in which their member hospitals can achieve both savings at the pump and through strategic programs. Most suppliers are eager to standardize capital equipment, and with the assistance of their GPO partner, hospitals can enhance their negotiation leverage in achieving the best value. “The clinic with a long-term plan to truly maximize all of their available efficiencies should tactfully and proactively request substantial value propositions from suppliers in return for standardizing capital equipment,” advises Troy Tuttle, MS, Portfolio Executive at Vizient, the country’s largest healthcare GPO. “In today’s market, clinics with physician alignment truly have the upper hand at the negotiation table.”


1. http://www.pbs.org/newshour/rundown/new-peak-us-health-care-spending-10345-per-person/2. http://www.24x7mag.com/2015/02/medical-equipment-management-change-2015/3. http://www.bicmagazine.com/departments/testing-training-hr-subsection/standardization-the-fast-track-to-a-qualified-workforce/4. http://www3.gehealthcare.com/en/products/categories/ultrasound/trophon_epr/standardization_delivers_savings5. http://library.sasb.org/wp-content/uploads/Health_Care/SASB-Medical-Equipment-Industry-Brief.pdf6. https://bluegrassbm.swoogo.com/acesummitandexpo/208347. http://www.hpnonline.com/inside/november%2005/0511BackTalk.html8. http://www.medtronic.com/covidien/news/blog/2016/03/pathways-to-clinical-and-supply-chain-standardization9. http://www.ihi.org/resources/Pages/Changes/StandardizeRoomsEquipmentPatientFlowandInformationFlow.aspx10. http://www.supplychainassociation.org/?page=FAQ11. http://www.hfmmagazine.com/articles/1456-medical-equipment-budgeting

RESOURCES

The pathway to such successful scenarios as this can be found in a variety of soft-ware-based options in the market that can precisely guide and empower a VAT to quickly elevate their healthcare facility to best-in-class standards. It is important to note that there are both supplier-based platforms and third-party frameworks that can provide solutions. Third-party resources can be seen as all-inclusive, as they provide unbiased pathways with regards to which brands are preferred, and if conversions are planned, these programs can further provide impartial guidance.

The industry leading third-party solution can be obtained by contacting Attainia and allow-ing one of their experts to provide you with a complimentary overview of just how significant of an impact can be made. If you are interested in finding out more about Attainia, Inc. and how their software can serve both the creation and management of capital equipment stan-dards, please visit them at www.attainia.com or call 1.866.288.2464.

FINDING THE WIND AT YOUR BACK (continued)

attaining calm waters with capital equipment standards · attaining calm waters with capital...

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