By C. Wayne Hibbs, PhD, CCE
In the September 2013 issue of 24×7 Magazine, I contributed a Service Solutions article titled “End of Life in Lean Medical Equipment Management,” which discussed how healthcare systems were implementing lean processes to reduce costs and liabilities. (Click here to read the article in its entirety.) The article also touched on how lean specialists had developed metrics to measure the performance of all levels of healthcare, with the goal of maximizing value while minimizing waste in the processes, equipment, and people involved.
Further, one of the targeted metrics was to perform an end-of-life (EOL) analysis of medical equipment inventories. The EOL determinations were then plotted for capital equipment master planning over a five- or 10-year projection period.
The two sources of data selected were the American Hospital Association’s (AHA’s) “Estimated Useful Lives of Depreciable Hospital Assets” and the HTM database of existing medical equipment, with the corresponding ages of the devices. In each case, the biomedical service group would have most of the information needed to perform the analysis, although some areas of the inventory weren’t available—including major ones.
Also, many of the lean programs later found out that they didn’t have laboratory analyzers, operating room lights and booms, sterile processing equipment, or flexible endoscopes. And these items were a significant percentage of the overall equipment value and critical to the EOL management projections.
Back to the Future
While lean is still an important concept in healthcare operational management, the financial targets have been redefined into electronic asset management (EAM). Fortunately, HTM professionals’ input and responsibilities are much better defined in an EAM program than in a lean management process.
In a perfect world, EAM can interface data from the supply chain on all equipment purchased or leased. The receiving report would be used to establish a new item by date of purchase, receipt, vendor, warranty, inventory tag number, as well as the hospital department that owns the device. These functions represent the “gatekeeper” component.
The EAM system would then track each item by where it is located, how often it is used, when it requires service or calibration, in addition to any supplies, disposables, reagents, or calibrators it requires. It would also track the amount of time staff members spend using it—information that would define staffing requirements in micro-full-time equivalents.
Currently, this data is in many different and non-compatible formats. If the EAM can access these multiple operational costs, however, it could resolve the “operational manager” component.
But the clinical activity of any item in the EAM system needs to be tracked. You need to know, for instance, if the device is an automated chemistry analyzer that is performing 750,000 billable tests per year, a heart/lung machine that is used in 300 cardiovascular surgical cases per year, or a defibrillator in the PT/OT gym that has not be used on a patient in six months.
While this might be thought of as a return on investment, it must be looked at as the “availability” component. It should answer the question: “Do we have enough or do we have too much?” Still, this information will never justify the development cost of an EAM since it doesn’t create answers—it only compiles data.
Better Asset Management
To justify EAM, we need to have access to our own IBM Watson. After all, Watson could take the “gatekeeper” information, apply the “operations manager” function to the “availability” requirements, and determine the total cost of ownership, aka TCO. Note: TCO is a much better management tool than EOL estimations garnered from an AHA guidebook that is published every five years.
Tracking the TCO could create a function of ongoing benefits to expenses. Case in point: A new CT scanner may run for seven or eight years with minimal problems, turning out many scans per day and only requiring two staff members for 12-hour days. But then the frequency and cost of service begins to increase; the types of procedures it performs change as newer, faster CT scanners are purchased; and the TCO graph has an upswing.
A well designed EAM will identify or even predict this change in TCO and notify the gatekeeper when the cost of ongoing ownership exceeds the cost of replacement with a newer technology. This electronic asset management is much more important than EOL in the efficient and lean operation of our facilities. And as HTM professionals, it’s up to us to champion for the better management of the technologies we support.
C. Wayne Hibbs, PhD, CCE, is a certified clinical engineer, director of technology planning, and principal with BSA LifeStructures, Indianapolis. For more information, contact firstname.lastname@example.org.