By Jeff Niederhausen
?The time of clinical/biomedical engineering departments only being about equipment repair and preventive maintenance has gone the way of x-ray film and the glass thermometer. Health care is changing, and biomed departments that embrace innovation will ensure their relevance in this new era. Hospital management is constantly on the lookout for new savings initiatives. It is important for the biomed departments to be partners and—in today’s challenging fiscal environment—be agents of change. It starts with thinking outside the historical norms and looking at the big picture: Savings analytics and new revenue sources.
Catholic Health Initiatives (CHI) created its in-house biomedical engineering program in April 1999 and it has been a best practice for the system ever since. The program continues to flourish and has become one of the greatest accomplishments of the health system. In an effort to do all service in-house, CHI’s clinical engineering department has everything from entry-level BMETs to imaging specialists. In addition to the more traditional offerings, CHI also offers technology assessments, equipment planning, and now consulting services to assist other health care entities duplicate its success. What follows are some simple practices or savings initiatives that CHI enacted to accomplish its initiatives.
Extending the Borders
When thinking outside the box or beyond traditional roles, nothing should be off limits and everything should be considered. Ideas that seemed ridiculous in the past could be viable in this new health care environment. Stewardship is the key word for all ideas. What value does a new idea bring to the organization? How much will it cost to implement? Does the cost outweigh the savings? Sometimes the simplest ideas generate the most value, so the process of brainstorming new ideas and soliciting input from team members is a great investment in future innovation.
Equipment sharing can be cost-effective for systems that have limited capital funds. System hospitals need to act corporately, breaking down traditional silos of interest. Equipment in the system should stay in the system. Items that retain clinical value should not be traded in on OEM purchases, sold to third-party buyers, or even donated to charities before the health system assesses its needs. What one hospital views as worthless could be priceless to a sister hospital in need. Simply communicating with the other hospitals in the system via e-mail could save millions. By simply sending an e-mail and moving equipment between hospitals, employing minimal effort for a maximum gain, the biomed departments go from zero to hero.
Vendor control represents another area where, even though a fine line, biomeds can have control for driving savings for the hospitals. Due to the dynamics of our industry, constantly investigate value propositions for each vendor. We have to avoid getting into habitual relationships with vendors based on a variety of reasons. It might very well be easier on the technician to call the same people every time. However, is this in the best financial interest for the hospital or system? When repairing any piece of medical equipment, every biomed should consider two things: patient safety and quality parts for the best price. Of course, the OEM will have the parts you need for most repairs. However, identifying a second, or even third, source can produce additional savings. Do not be afraid to try newer vendors on the small things at first. This might be an opportunity to build a great new relationship, precipitating deeper discounts or leading to preferred sourcing solutions that would benefit the hospital or system.
Contracts and Parts
Contracts are another area that can generate a big return for the hospital or system. Contracts are a necessary evil in our business and clearly an area where biomeds need to have oversight. The need for contracts can be a source of contention between the biomed department and medical staff, but this conversation must take place. If the equipment is new technology and the clinical engineering department has insufficient knowledge or experience to intervene in an emergency situation, then contracts might be necessary for a time. As familiarity builds with a modality, the opportunity to service such items without contract coverage becomes very appropriate. 24/7, 365-day contracts are expensive and require careful consideration. Utilizing lower levels of coverage or even negotiating custom levels of coverage based on local talent is higher-level thinking. Taking risk is sometimes the best way to service the equipment. Yes, there could be some stumbling along the way, but overall the return on investment from having a local technician trained and servicing the equipment is too great to ignore.
Equipment sharing can be cost-effective for systems. What one hospital views as worthless could be priceless to a sister hospital in need.
A parts pool or an insurance approach is something that might not have worked well in the past, but it might not be an idea that is dismissed now. Innovative programs can utilize their own corporate liability insurance program for medical equipment repair coverage. A piece of equipment is taken from contract coverage and placed on the insurance program. If something happens, the pool absorbs the repair expenses, which are spread out across the inventory in the pool. Yes, it is a cost. However, the cost is dramatically lower than what the original contract would have been to cover the piece of equipment. If a parts pool or insurance approach is right for your hospital or system, it might be best to pick one or two modalities and start from there. Programs of this nature can be complicated to manage, but most systems already have resources for liability coverage in place.
Shipping and freight is another area the biomed department can control. This is an area that can drive some significant losses. Many times technicians habitually order parts for overnight delivery, regardless of the actual urgency of the repair. One must ask themselves, “Do I really need the part sent overnight?” There is a time and place for overnight delivery, but overnight shipping of batteries for a PM 60 days in advance is not financially appropriate. If the technician knows that they will not be installing the part for a couple of days, they can take the less expensive route and use ground shipping.
Returns and core exchanges are another piece that technicians can overlook, and it can cost the hospital or system big money. Vendors track parts that should have been exchanged or returned, and there is a time limit on the corresponding credit. Failure to return the part in a timely manner creates unnecessary expenses. Possible reasons for this include poor communication and a lack of fiscal awareness on the part of technical staff. In the end, it is easily avoidable. Analyzing parts and shipping spends might illuminate areas for improvement in the process. Some systems have created parts-procurement departments. Parts-procurement control can drive compliance on parts sourcing relative to contractual discounts from partnerships with vendors and control the exchange of parts. Lax core exchange procedures are a source of unnecessary loss of revenue. Appropriate procurement controls can minimize waste in the process.
Utilizing Expert Knowledge
Innovative biomed groups look past the traditional technical work for additional areas of service that could bring value to their hospitals and systems. Two of these areas are technology assessments and medical equipment planning. These are two functions that are tied to medical equipment, and no one knows medical equipment better than the technicians in the biomed department. We all understand how expensive medical technology can be, and when everyone is competing for capital dollars, it is good to have something tangible to guide clinical concerns through the capital process.
For instance, given the amount of work necessary to produce a capital planning document, it would be reasonable that every 3 years a facility is reviewed and a new report is created. The C-suite of the hospital can utilize this report to forecast items for replacement based on what is no longer serviced or what is needed to keep up with competition. The expense of producing such an extensive document is minimal in comparison to the value it brings the system.
Out-of-the-box thinking and a true grasp of the power of stewardship-focused efforts are the key to developing innovative biomed programs.
Medical equipment planning is another expense to consider. The question at hand: Why pay outside firms for medical equipment planning when we have the staff with the knowledge and we can do it for a fraction of what an outside firm would charge? Technicians can work with the construction teams and designers through the course of the master facilities project. Like technology assessments, dedicating individual employees to such a project can be a difficult prospect. However, the return on this investment greatly outpaces the expense. Software packages that allow for blueprint-level specifications for equipment needs and placement can greatly simplify the process for all the people involved with the building project.
Technology assessments and medical equipment planning are two areas that are particularly productive for large systems. By creating technology assessment and equipment planning teams, these systems could achieve similar savings. The overall salaries and benefits costs pale in comparison to what an outside firm would charge. Creating such teams also creates career-growth opportunities for existing staff, which increases employee retention levels.
Now, as we stand on the brink of health care reform, bravely looking outside the norm and seeing what can be done to increase the revenue stream is essential to maintaining more efficient clinical engineering programs that are well-positioned to flourish in this new environment. While there will always be entities in our industry that recommend out-sourcing biomed programs, others see the key to maximizing impact is in-sourcing biomed services. Strategic employment and training efforts position the health care technology management program to drive out costs while increasing the scope of services for the hospital or system as a whole. The reality is that employees are our greatest assets in our efforts to reduce expenses. Many health care systems are employee or full-time employee phobic right now. As leaders in the biomed field, we must first educate ourselves and then our hospital leadership on the exceptional return on investment we see with talented, well-applied biomed technicians.
Out-of-the-box thinking and a true grasp of the power of stewardship-focused efforts are the key to developing innovative biomed programs. Technicians should have a clear understanding of the value of a dollar saved, as opposed to a dollar earned via the current health care revenue stream. Given that many hospitals will struggle to make a 3% profit margin, a dollar directed to the bottom line by an efficient biomed program will have more impact than ever before. It is important to always remember that nothing should be off limits to discuss to better the program, the hospital, or system. The days of sitting at a workbench have come and gone. Now it is time to not only be the technician but to be an educated risk taker with an entrepreneurial spirit. Embrace the truth that nothing is impossible. One just has to have the courage to step out of the everyday norm and start looking at the big picture. 24×7 Service Solutions January 2013
Jeff Niederhausen is the director of business development/operation resources, clinical engineering/facilities management, for Catholic Health Initiatives, Erlanger, Ky. For more information, contact the editor.