As medical costs continue to rise, enBio—a Burbank, Calif-based clinical engineering and equipment maintenance firm—works closely with health care organizations to reign in spending. Below, enBio CEO Arthur Zenian shares how streamlining equipment management can save hospitals money—and time.
24×7: How are high equipment costs affecting hospitals?
Zenian: We’re in the business of helping hospitals source, assist, guide, and recommend medical equipment purchases, so I see firsthand that costs are rising as equipment becomes more capable, more connected, and needs to support the latest advancements in clinical procedures. Hospitals are struggling to find ways to control escalating costs, whether the cost is associated with billing and reimbursements, labor, overhead, or equipment purchases. Typically, they’re pressed to find time to do the necessary procurement and equipment audits or to renegotiate unfavorable contracts. It seems some hospitals are too busy to save money!
One big way to offset rising costs, however, is to have a comprehensive maintenance plan in place that keeps equipment up and running around the clock. Medical equipment should be considered a valuable asset that contributes to the bottom line, not just an expense. The first thing we generally do for our clients is an extensive site evaluation that helps them understand the current working condition of their equipment and potential cost impact of any needed repairs or maintenance. The goal here is to be proactive, which always saves money in the long run.
24×7: What’s driving the focus on equipment management as a way to reduce operating costs?
Hospitals simply don’t have unlimited budgets, so the focus is on cost reduction by maximizing equipment utilization, maintaining equipment uptime, and minimizing repairs or unscheduled maintenance. It’s not just about the initial cost of the equipment. The real savings are in equipment management.
I’ve partnered with hospitals that have postponed or canceled capital expenditures on medical equipment as a way to reduce operating costs. This really puts the emphasis on properly maintaining the equipment they have.
Medical equipment is truly the lifeblood of today’s hospital. I have conversations with hospital CEOs and senior managers every day and the message is clear: “Help us squeeze more efficiency and savings from our equipment assets.” Hospitals are bogged down with insurance claims processing and reimbursements, staffing issues, patient care challenges, and runaway labor costs. Taking the burden of equipment maintenance off the shoulders of hospital staff results in lower operating costs and puts the focus back on patient care.
24×7: Hospitals need expensive equipment to keep pace with changing medical procedures. How can they maximize their investment?
Zenian: Advances in information technology and medical procedures are increasing the demand for the latest medical equipment. To get the most accurate diagnosis possible, hospitals are deploying everything from nuclear medicine to advanced imaging systems.
But, as hospitals zero in on specific types of services—in-patient, long-term acute care, and so on—it’s important that major equipment purchases align with hospital goals. Not every facility needs the latest robotic-assisted surgery system. I recommend to our clients that equipment purchases should complement their service model. Also, it’s important to have an equipment LTV—lifetime value—purchasing mindset to be sure all equipment assets deliver maximum value throughout their useful life.
24×7: How can hospitals improve equipment vendor management?
Zenian: Most hospitals have too many vendors, overlapping service contracts, and “gold” or “platinum” OEM coverage. It’s not always clear who to contact for service, what items are covered, or how they can save money versus a manufacturer’s contract. This can all be handled by the biomed director or manager whether they have an outsourced or an in-house biomed program.
A single point of contact who can work as a liaison between purchasing, administration, biomed, and other departments can monitor and manage all the various contracted services, warranty services, and outsourced services as part of a unified approach to equipment vendor management. We do this every day for our clients, and the increased oversight can yield significant savings if managed properly.
24×7: Why is outsourcing biomed functions a good strategy?
Zenian: We’ve found that hospitals can lower biomedical maintenance costs by 20% or more versus an in-house biomed program. Outsourcing delivers savings by standardizing services and provides economies of scale across multiple hospital facilities and locations. Hospitals also reduce the need for rentals and save on rental costs by outsourcing equipment management to a vendor who properly maintains their existing fleet and can keep everything up and running. Should they need to rent, it’s important that the biomed team track each item and notify the purchasing team when the item is no longer needed. This prevents recurring billing for non-essential rentals.
Our customers tell us they have lower payroll costs, reduced liability, more labor flexibility, and experience improved equipment uptime as a result of maintenance outsourcing.
24×7: Please talk about how standardization can help hospitals lower costs.
Zenian: Standardization results in savings by consolidating costs across multiple departments or activities, such as equipment purchasing, maintenance scheduling, procedure documentation, data entry, and inventory control. This is especially important for hospitals with multiple locations. For example, hospitals can standardize on specific models of equipment so that consumable items and parts can be shared across the organization. This can also lead to supply chain savings by allowing bulk purchases of common items.
As part of a standardized approach to maintenance, more and more hospitals are turning to computerized maintenance management systems that provide real-time status of equipment inventory and maintenance. This is an example of how technology contributes to cost savings and provides a method to implement standard operating procedures.