White Paper

More than just capital equipment planning; a comprehensive

lifecycle management plan will bring maximum value to

acquisition, usage, and disposition of medical equipment

assets. And as it is implied in the definition, this type of lifecycle

management of medical equipment involves a more all-inclusive

group of individuals than just the biomed department including

professionals from IT, purchasing, facilities, and finance.

A comprehensive plan of this stature can address the business

and clinical needs of the hospital resulting in significant

reductions of the TCO of equipment by eliminating variations

in products, workflows and purchased services and right-

sizing capital investments.

When it comes to comprehensive lifecycle management of

equipment, there are five key areas to reduce a hospitals TCO

and improve the bottom-line: capital equipment and technology

planning, selection and procurement, implementation,

management and support, and end of life management.

Although there is evidence of an improving economy, hospitals large and small are still facing significant financial challenges

caused by lack of access to capital,

reduced reimbursement rates

and reduced census. With

little to no control over

these challenges, many

hospitals are looking

for new ways to curtail

expenses and boost

the bottom line without

sacrificing quality of care.

One remedy that is currently

saving millions of dollars for

hospitals across the country is the ability to reduce the

total cost of ownership (TCO) for medical equipment through

a comprehensive lifecycle management plan.

Technology. Training. Teamwork. www.trimedx.com 877-TriMedx info@trimedx.com

Can Help Reduce Total Cost of Ownership

WaysFiveComprehensive Lifecycle Management

Capital Equipment and Technology Planning

The best place to start planning

for capital equipment and

technology acquisition is visiting

the organizations mission, vision

and long-term goals. Whether your

organization wants to be the leading

heart hospital or the number one cancer

center, every acquisition across the entire

system should reflect the ultimate goal and align with that

mission. This requires careful consideration and thorough

evaluation of the technology to understand what is available

to purchase today, what new technology is on the horizon and

what is needed to accomplish the organizational goals.

Often times, when it comes to purchasing new

technology and equipment, many health systems have

a limited or sometimes restricted view of planning

across all departments. The hospital can operate in a very

compartmentalized environment rarely using standardized

resources and processes to drive decisions creating costly

inefficiencies system-wide. This behavior leads to over or

under buying of technology and equipment. If a hospital

inventory is not right-sized, the effects are costly including

lost opportunities to aggregate and plan volume buys;

increased costs on consumables, training, and service parts

due to lost economies of scale; and difficulty budgeting

across the system due to variation in criteria used during

facility/system level prioritization.

Right-sizing the inventory, or evaluating and removing excess

equipment, will gain significant savings and can even create

income for the entire system if the unnecessary inventory is

physically removed and replaced with revenue-generating

equipment. It not only removes excess and unnecessary

equipment, it also eliminates excessive labor, preventive

maintenance, repairs, and parts. Right-sizing inventory

maximizes the current spend while helping the hospital

prepare for future equipment and technology needs.

The best place to start is by conducting an inventory

assessment across all departments and modalities to

determine where there are gaps and overages.

Once the inventory is right-sized and you have moved excess

inventory to an end of life management program, youre ready

to purchase new technology. Every hospital has a long-term

plan for the entire facility that involves mission and vision (not

just for capital equipment); therefore, its critical to align the

comprehensive lifecycle plan with the long-term

goals for the entire hospital or

system, not just the biomed

or clinical engineering

department. In other words

dont just look at the sticker

price or make a decision

based on the latest and

greatest technology.

Carefully

consider and

evaluate

technology

to ensure it

fits with the

purpose and

need for today

and matches

the vision for

the future.

Right-sizing inventory maximizes the current spend while helping the hospital prepare for future equipment and technology needs.

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Selection and Procurement

When beginning the capital

equipment purchasing

process, hospital leaders

should consider what makes

sense system-wide, not just

department by department.

Choosing the right product can save

significant time and money in the long run. For example,

in the imaging world, will the picture archiving and

communication system (PACS) interact seamlessly with the

computed tomography (CT) scanner and electronic health

record (EHR) system? Will it truly capture the information that

needs to be stored?

During the selection and procurement process, its

important not to rush the decision and to invite the right

experts to the table when making the decision. In most

hospitals, there is excessive variability in how technology is

selected and purchased. Many times there is plenty of data

and expertise within clinical, financial and technical areas but

there simply are no processes and little communication.

Again, creating standardized processes among key

stakeholders can lead to robust capital negotiations to

reduce TCO by balancing clinical needs with price, warranties,

training, and service strategies.

Know whether it makes sense to purchase new, used or

remanufactured equipment. Consider the costs of service

contracts, warranties and compare those with the goals of

the organization. Are you more interested in service contracts

at a premium cost or saving money by engaging in limited

coverage post warranties? Also consider the maintenance

over the course of the equipments entire lifecycle. How much

do parts cost? How much for service labor? How long do

patients have to wait, be rescheduled or diverted? Does this fit

into the facilitys long-term plan? Can I leverage consumables,

parts, PM with other like models?

Take for example defibrillators. In a large

hospital in the Midwest, there were 82 models

of defibrillators from 12 different manufacturers.

Imagine the inconsistencies and inefficiencies

that occur when it comes to service, buying consumables,

training and retraining staff, conducting PM or repairs, and

...creating standardized processes among key stakeholders can lead to robust capital negotiations to reduce total cost of ownership by balancing clinical needs with price, warranties, training, and service strategies.

Five ways comprehensive life cycle management can help reduce total cost of ownership Technology. Training. Teamwork.

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...a defined process for installing and integrating new capital equipment can prevent costly infrastructure alterations and disruption of workflow.

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ordering replacement parts. By reducing the variability of the

manufacturers and models of the defibrillators, the hospital

could save significantly in the purchase price of consumables

and parts, staff training, and ultimately receive a more mobile

workforce and safer patient environment.

To achieve business objectives selection and procurement

should start with conducting product evaluations that

incorporate clinical, financial, technical, and business criteria.

Once the processes are in place and you have the right team

at the table to save costs, negotiation with manufacturers

can help save additional dollars in both the short and long

run. In most purchases, hospitals should opt for short-term

maintenance and warranty and rely on trained staff to service

the equipment. When negotiating contracts remember to

balance clinical needs with the price of equipment and

service strategies. Again, aligning with the hospitals values

and goals, decide whether it is better to pay a higher price

for a better warranty and service contract options, or do

you need to get a lower cost with less coverage? If your staff

is properly trained you may not need a warranty and can

negotiate lower costs for sale of the purchase.

Implementation

It is important to ensure that newly

acquired equipment will work

alongside the current equipment

infrastructure causing minimal

impact on workflow, patient

care and facility operations. As

with the previous ideas, a defined

process for installing and integrating new

capital equipment can prevent costly infrastructure alterations

and disruption of workflow. For example, prior to delivery

(not upon delivery) of a magnetic resonance imaging (MRI)

scanner, staff should evaluate workflow, including how the

equipment will integrate with enterprise resource planning

systems, patient monitoring, radiology information systems

and PACS, electronic medical records, and other financial

systems.

The implementation process should include coordination

and communication with facility management and clinical

departments. Defined processes for clinical and technical

acceptance testing of newly installed equipment that is

aligned with capital contract terms and conditions should

also be in place. This standardization of a system-wide

process will help make certain that equipment is safe and

ready for patient use and is properly integrated into the

facilities Medical Equipment Management Plan (MEMP). Post

installation confirmation of products and services received

should also be conducted to include timely and documented

completion of both clinical and technical training, leading to

release of final payment.

To achieve business objectives selection and procurement should start with conducting product evaluations that incorporate clinical, financial, technical, and business criteria.

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Five ways comprehensive life cycle management can help reduce total cost of ownership Technology. Training. Teamwork.

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Management and Support

A good comprehensive lifecycle

management plan takes into

account ongoing management

and support; and it starts

with training. Its imperative to

have well-trained engineers and

technicians to deliver the program with

expertise. Providing effective and on-going

training for employees and holding each person accountable

to participate in regularly scheduled training is the first step.

This not only ensures the entire department is proficient

and aware; it also helps to reduce reliance on external

vendor contract services. Another fringe benefit of training is

improved retention and job satisfaction; trained and informed

employees will not only bring more value to your organization,

they will feel more valuable too.

A well trained staff will be more successful in optimizing

utilization of equipment if a computerized maintenance

management system (CMMS) is in place to track, manage and

report on all capital assets. An effective CMMS can

help right-size the inventory as mentioned above as

well as control service costs and provide critical data needed

to develop strategic plans for capital acquisition in the future.

Being able to monitor the clinical performance of inventory

and the satisfaction of end users as well as track service

delivery metrics and Return on Investment (ROI) for each piece

of capital equipment work hand in hand to reduce annual

operating expenses and extend the lifecycle of your assets.

End of Life Management

As new equipment makes its way

into your facility, you still must

contend with the old equipment

thats outlived its usefulness.

Should you sell it, trade it in,

dispose or redeploy? Even if no

longer needed, that old equipment

can still benefit your department or organization. Whether

you call it end of life or retired there are several disposition

options and opportunities for yielding value out of that

outgoing medical equipment. If replacing your existing

equipment doing your research will pay off. Youll save at

least 15% by pursuing other options as opposed to simply

trading it in.

Developing a long-term capital asset strategy to reduce

capital expenditures can offset the cost of new purchases

and help to save millions of dollars in a short amount of time.

No matter which choice is made regarding equipment that

has reached end of life, coordination and communication are

keys to success. To avoid over equipped or under equipped

status, the de-installation of assets should be coordinated

and communicated across clinical, finance, facilities, IT and

purchasing departments. Hospitals should engage a long-

term disposition plan that includes processes for both large

equipment (such as MRI machines and CT scanners) and

small biomed devices (infusion pumps, bedside tables, fetal

monitors and the like).

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