How medical devices can help make or break a challenging financial year for healthcare systems
By LeAnne Hester
As the healthcare industry continues to move gradually beyond the height of the pandemic, returning to “business as usual” as defined prior to 2019 is clearly not an option. The pressures that health systems face overlap and intersect, complicating the mission of caring for patients, delivering positive health outcomes, and maintaining financial solvency.
Strategic management of resources will be more important than ever for the success and long-term sustainability of many hospitals. Advancing technology will continue to play a growing role in streamlining clinical operations and exacerbate the existing need against cybersecurity threats as they continue to evolve.
1. Difficult economic realities will complicate lingering challenges from the COVID-19 pandemic
The chaos that COVID-19 brought to health systems put incredible strain on healthcare providers, both at the systemic and individual levels. Hospitals are still seeing high turnover, in large part due to staff burnout. This problem can easily become self-perpetuating as a shrinking staff pool is continually stretched thin to meet demand.
Staffing shortages in nursing and clinical engineering teams are unlikely to disappear in 2023, putting pressure on providers’ ability to meet the demands of their patient populations across clinical care areas. Staffing will continue to be a costly challenge as hospitals are forced to rely on high-priced contract nurses and other outside vendors as a stopgap solution. Competition for labor remains high, which runs counter to the tight budgets that health systems are facing.
In the absence of a quick path to full staffing, a greater emphasis is needed on efficient processes and easing administrative workloads so clinical and technical staff can focus on activities with the greatest direct impact on patient care. Several studies also show that when nurses can spend more time on direct patient care, their overall satisfaction increases and burnout decreases—making it critical for organizations to reduce administrative burdens. For nurses, one of the greatest areas of opportunity is simplifying the task of locating and using medical equipment. A dedicated process for transporting, cleaning, and warehousing equipment can free up significant time for nursing staff. The most frequent culprits of these challenges? IV pumps, monitors, and scanners.
Likewise, biomedical engineering teams can also benefit from revamped processes and technology to focus their efforts where it matters most. Technicians can work more effectively when less of their time is spent documenting maintenance requests or looking for equipment, and more time is available for maintaining and servicing equipment. Comprehensive digital tools like a computerized maintenance management system (CMMS), coupled with dedicated support services like supply chain management, can automate or streamline many tasks.
Broader economic trends of inflation and decreasing returns on investments will also make their mark on hospitals. Rising costs of medical equipment and parts will leave no room for surprises in maintaining critical technology like medical equipment. Health systems will demand greater proactiveness and responsiveness from biomedical engineering to maximize uptime amid supply chain uncertainty.
In some cases, health systems will need to continually acquire technological resources to meet the demands of the industry and patients. Mobile devices are increasingly common in healthcare and will only become more ubiquitous in the immediate future. In addition to providing access to patient records, mobile devices are being used for remote patient monitoring and care delivery. This shift to mobile technologies can enable efficiencies, but it comes with necessary costs as well. Like any other medical equipment, mobile devices require maintenance as well as cybersecurity resources to safeguard patients.
Financial pressure will be felt both in the costs health systems incur and resources at their disposal. Specifically, cuts to their capital budgets are widely anticipated in 2023. With little buying power to acquire new equipment, the focus, in many cases, will need to shift to maximizing the productivity of existing resources and operating budgets. A common response among health systems will be to continue using older medical devices longer and turn to rental equipment to fill needs as they arise. Yet aging equipment and operating budgets alone cannot sustainably offset the challenges of capital shortfalls.
The real question is how existing equipment can best deliver value throughout its entire useful life. This requires a strong data-driven approach to maintaining accurate inventories and monitoring device utilization. This level of visibility turns closing resource gaps from a matter of reactive costs into a matter of strategic allocation.
2. The industry-wide shift in care settings and delivery will accelerate amid uncertain revenue streams.
Many of the service lines that health systems have typically relied on for revenue will be in flux with changes to the healthcare delivery model (HMD). Insurers will contribute to this trend by continuing to shift reimbursement to favoring outpatient procedures wherever possible, typically at lower revenue than inpatient procedures.
Inpatient hospital care could see an even greater decline as a result. Insurance companies can also be expected to structure reimbursement to favor more cost-efficient healthcare delivery models (HCDMs), including virtual care, remote patient monitoring, and nonacute care sites of care. Scrutiny will increase from government entities and even consumers, in addition to insurers, over where care is delivered, the patient experience, and health outcomes. The HCDM approach can potentially reduce costs for all parties, but it will also shake up traditional sources of income.
Unconventional shifts in the healthcare industry will further complicate the predictability and regularity of hospital revenue. Nontraditional organizations, including technology companies looking to expand their healthcare service offerings, may further disrupt revenue streams for traditional care environments.
With the combination of these revenue pressures and the numerous cost challenges health systems will face, we could see rationalization in services and hospital closures. Already underserved areas and patient populations could bear the brunt of these closures, putting even greater pressure on the already strained resources of the healthcare facilities that remain.
Patient populations will also feel the effects of a shifting economic climate, and the resulting changes in consumer behaviors will impact providers and health systems in their communities. Insurer trends, such as increasingly common high-deductible health plans and the possible end of COVID-19 Medicaid expansions, may deter patients from seeking care to avoid prohibitive medical bills. Decreases in elective care could put revenue-generating service lines at risk. Meanwhile, patients removed from Medicaid programs would likely require more unreimbursed charity care from hospitals.
Most concerningly, this trend could also affect whether patients seek preventative care. Proactive health management is a crucial component for treating health conditions early and more affordably for both patients and health systems. More intensive treatment plans for advanced diseases and conditions come with higher risks and greater financial burdens.
As facilities, staff, and resources will be stretched thin over greater geographic areas and patient populations, the industry-wide mandate will be to maximize efficiency. This includes medical device technology. Decision-makers will need greater visibility of their inventories to understand where the greatest need for equipment exists and how to maximize the value of these investments. In addition to comprehensive data and insights, health systems will need standardized processes to efficiently shift underutilized medical devices to areas with unmet needs.
3. Financial pressures will demand a more strategic approach to cybersecurity.
With greater constraints on financial resources, health systems will be heavily scrutinizing their cybersecurity strategies. Securing networks and traditional IT assets will likely take precedence for many organizations, while medical equipment vulnerabilities risk being neglected. The trend of increasing ransomware attacks shows no sign of slowing in 2023. Beyond the immediate financial repercussions, it is becoming more and more obvious to health systems that cyberattacks are hurting their ability to deliver consistent care and help patients.
Health systems will continue to pursue cyber insurance policies as a measure for recovering from the financial losses of a potential cyberattack. However, a great deal of uncertainty remains in how reliable these policies are to protect organizations. After all, coverage is becoming increasingly expensive, difficult to obtain, and less comprehensive.
Despite the intense focus on financial performance in 2023, health systems can still expect to face greater calls for responsible stewardship of patient privacy. This includes the safe and reliable disposal of electronic protected health information, which can help reduce the harmful effects of various types of breaches, including cyberattacks.
Health systems will require a robust and thorough process for evaluating cybersecurity risk across their entire portfolio. High visibility and objective metrics are crucial for making difficult decisions when prioritizing cybersecurity projects and remediating vulnerabilities.
While cyber insurance will still hold value for organizations, the emphasis on prevention will only grow stronger. Standardizing and strengthening tools for identifying vulnerabilities, calculating risk, and securing devices will not only reduce the dependence on insurance policies but also potentially increase insurability in a challenging time for organizations seeking coverage or reimbursement if an attack occurs.
Preparing for success in a challenging year for healthcare
Medical device inventories will pose a daunting challenge to unprepared health systems in 2023. Budget constraints and the risk of data breaches can trigger reactive thinking where deferring investments is the only path forward.
Approaching medical device management as a strategic process—instead of as an all-or-nothing purchasing decision—can drive solutions that scale savings and productivity. Comprehensive monitoring of how equipment is used across care settings can reveal where the greatest needs for resources exist and opportunities to increase the value that underutilized devices deliver.
Likewise, a dedicated solution to track cyber vulnerabilities and network activity will provide invaluable data for making confident decisions when prioritizing investments in cybersecurity projects. With more visibility to their device inventories, health systems can leverage their capital investments as tools to create sustainable savings, protect revenue, and reliably serve patients in 2023 and beyond.