Just uttering the phrase “asset management’ can start a fist fight. Perhaps the most controversy surrounds plans where a third party steps in to consolidate existing contracts into one management agreement. The financial promises are too alluring for many hospitals to resist, but can anybody keep those promises and stay in business? We examine this multifaceted diamond of a concept. What works, and what turns to dust.

f02a.jpg (9948 bytes)Everyone loves saving money. And an offer to reduce operating expenses by, say, 20 percent — what business could resist it? Certainly not the many hospitals that said “yes” to asset management, which promises to do just that. Some now say it’s a lifesaver. Others call it your worst nightmare.

Medical asset management is used to describe anything from maintaining a list of wheelchairs, to prepurchase capital equipment evaluations, to automated tracking and scheduling systems. Then there’s another, more controversial type of asset management, where a third party steps in to consolidate an organization’s existing service and maintenance contracts into one management agreement. The third party pays all the vendor bills, handles the paperwork, and gives the organization a discount over what it would be billed by the vendors directly for the same service and parts. It sounds like a dream, and that’s part of the problem.

There are many third-party programs. Some let you call the same vendors for service that you always called. Others provide administrative and equipment service. Some provide neither, serving merely as a service broker and assuming financial liability. Some use independent service organizations (ISOs) to provide service, while some ISOs also offer asset management. And not to be outdone, major medical equipment manufacturers such as Toshiba, Philips, GE and Siemens have established their own multivendor service operations. Confused? Just wait.

Even traditional in-house hospital programs have gotten into the act. The biomed program at Jefferson Health System in Philadelphia is based on the ISO model, blending internal and third-party resources. It not only provides cost-saving support to Thomas Jefferson University Hospital (TJUH, which has some 14,000 pieces of equipment), but also sells its services to non-affiliated hospitals. At first, this service was brokered by U.S. Counseling Services (now USCS Equipment Technology Solutions), a medical instrumentation maintenance insurer that absorbed all potential risk. USCS also absorbed all the profits.

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