By David Stevens
With hospital margins tighter than ever, health systems must develop creative strategies to optimize their financial resources. By establishing a clinical asset disposition strategy, healthcare organizations can maximize their equipment investment value, generate a cash return, and reduce medical waste.
Medical devices account for roughly 25% of health systems’ capital expenditures. To obtain the largest return on investment, organizations must regularly service their devices to increase useful life and maintain service records to support lifecycle planning and resale value. Health systems can accomplish this by implementing a comprehensive clinical asset management program. Older medical devices are not trash—they often have residual value that organizations can turn into treasure.
The Value of Older Medical Devices
For health systems, clinical asset disposition benefits include cost reduction, recouped value, and waste reduction. Let’s look closer at each result.
With care models shifting from higher acuity hospital settings to lower acuity sites like outpatient centers or clinics, some equipment may no longer be fully utilized. In fact, TRIMEDX statistics reveal the average device utilization for mobile medical equipment in hospitals is between 40%-50%. When possible, reallocating these devices to other sites of care instead of disposing of them extends a healthcare organization’s capital investments and prevents spending on unnecessary new equipment.
Assessing the complete clinical inventory’s current use and condition gives health systems a better idea of a device’s true useful life. With service record and performance analytics, clinical engineering teams can track equipment status and anticipate the need to reallocate or dispose of a device.
Eventually, every device reaches a point where it no longer performs as expected, carries too much risk, or is no longer appropriate or useful for any of a health system’s care settings. Disposing of old, end-of-life equipment reduces an organization’s operating expenses and optimizes its overall clinical asset inventory. Healthcare technology management professionals no longer waste time and resources servicing devices that provide little return, and the remaining inventory becomes more efficient.
Proper clinical asset management lengthens a medical device’s useful life and controls costs. By optimizing clinical asset inventory and using objective data, health systems can cut annual operating expenses by 10%-20% and conserve 25%-35% of their capital resources.
Auctioning devices can recoup some of a health system’s investment. The sale returns cash to the organization, which can be used to help offset increasing operating expenses. Complete maintenance records provide proof of device quality in an auction, driving higher value. Third-party auctions may generate 20%-50% higher returns than original equipment manufacturer trade-ins.
Hospitals produce more than 5 million tons of waste annually. Whether through reallocation, auction, donation, or recycling, proper clinical asset management reduces this waste. Through auction, many of these used devices find new homes in underprivileged communities that struggle to provide adequate medical care. This further maximizes the care value of the equipment while increasing access to healthcare.
Maximizing Device ROI
Like most things, transforming older items to treasure requires planning and strategy. Comprehensive clinical asset management is a strategic initiative that can yield long-term, sustainable results.
What’s more, TRIMEDX data shows systems’ inventory records can be up to 40% inaccurate, leaving missed opportunities sitting in a storage closet. To enable effective clinical asset management, health systems must build a complete medical device inventory. Documentation should include a device’s age, cybersecurity risk, maintenance history, parts availability, utilization, and performance. Remember: Organizations must maintain current records to understand their available resources, as well as the equipment’s current state. Using an inventory assessment, organizations can develop and execute a maintenance schedule to keep devices working longer.
Proper management also requires a device lifecycle management plan. This plan involves decisions on risk tolerance, utilization and performance expectations, as well as disposition strategy. Throughout the ownership period, assets require continual evaluation to determine if they still fulfill the organization’s clinical and financial needs. When a device’s value declines, the organization can consider alternative uses, including reallocation and auction.
Also, a systemwide governance council removes ambiguity over who makes equipment-related decisions and develops processes for maximizing medical device value. Capital planning committees approve key purchases and expenditures, enable strategic priorities, and support ongoing care for patients. A clinical asset management technology solution empowers health system planning by providing accurate insights into a device’s status with much less manual effort. Along with performing inventory management, the technology can keep extensive records—thus aiding the decision-making process.
In summation, technology and treatment options constantly change, but the evolving conditions don’t necessarily mean “the end” for older medical devices. With proper planning and management, these assets can provide extended value by contributing to reduced operational expenditure, optimized capital expenditure, and generated cash.
David Stevens is vice president of clinical asset management at TRIMEDX. Questions and comments can be directed to 24×7 chief editor Keri Forsythe-Stephens at [email protected].