Start By Asking Yourself These 3 Questions

1. What is our overall annual medical equipment maintenance spend including in-house, outsourced, OEM, T&M, etc?
2. Do we have long-term contracts?
3. Is there a cost reduction goal?

As fiscal uncertainties remain and revenues continue to trend downward, it seems the need to reduce costs gets more important with every passing day. It’s increasingly important for healthcare facilities to find innovative ways to trim as much wasteful spend as possible. Not only is reducing cost imperative in today’s economic climate but a structure needs to be in place that helps identify, quantify, execute and sustain those cost savings over the long term.

At the heart of any cost reduction discussion is knowing the correct questions to ask your team in order to know. Today, we’ll discuss the clinical engineering department’s role and how it can be an area where there may be significant hidden savings. Understanding the total cost of your facility’s current medical equipment maintenance program is paramount to finding savings. And to get a clearer picture of your program you need to look at all the contracts included in your maintenance program whether  they are in-house, outsourced, OEM costs, or Time and Material costs to name a few. Cost reduction is never easy.

Assessing the Overall Medical Equipment Repair Spend

Assessing your current clinical engineering program includes taking a complete inventory of the medical equipment on hand. Begin by analyzing all the contracts associated with the biomed maintenance program.  You may find that you are still paying for maintenance under a maintenance contract for equipment no longer in use by the facility.

By “Right-sizing” your facility’s inventory, or evaluating and removing any excess equipment, you will gain significant savings and can even create income for the entire system if the inventory is removed and replaced with revenue-generating equipment. This process not only removes excess or unnecessary equipment, it also eliminates excessive labor costs, preventive maintenance, repairs, and parts. Right-sizing inventory maximizes the current spend while helping the hospital prepare for future equipment and technology needs. The best place to start is by conducting an inventory assessment across all departments and modalities to determine where there are gaps and overages.

The assessment should also include interviews with major stakeholders in order to get clear understanding of all the policy/procedures or protocols used to keep the program running.

Multi Year/Multi System Maintenance Contracts

Every hospital ultimately needs to safeguard their investment in high-priced sophisticated medical equipment. But they want to protect that investment without paying high prices that are associated with a service contract. There can be a balance: exceptional maintenance with a price tag that’s not as daunting as an “out of the box” service agreement.

Often times there can be cost efficiencies realized when hospitals agree to multi-year contracts or to multi-system contracts. In both cases the more you buy the greater the discount. Realize even greater savings by using these together.

In order to take advantage of any service contract savings, consider the following:

• Choose an 8 a.m. to 5 p.m., Monday-through-Friday option
• Hospital systems can take advantage of savings by combining all the same OEM equipment under one contract with various service options based on each site’s level of need
• Analyze the labor and parts expense history of each piece of equipment currently covered under contract to determine the parts and any outside labor budget
• Reduce coverage options on equipment maintenance you feel comfortable handling

Is There a Cost Reduction Goal

Hospital leadership needs to clearly understand their cost reduction goals and be able to communicate those goals in a way that makes everyone accountable by translating it to tangible actions for all involved. Taking this approach will facilitate the communication of cost savings goals to front-line staff and provide clarity on what needs to be done to achieve any stated cost reductions.

Often times when the conversation about cost reduction takes place most people automatically think staff reductions, or cost cutting reduces patient satisfaction. Leadership can set the tone early by addressing any fears by communicating how any cost savings will be realized, such  – adjusting inefficient operational processes, strengthening soft skills. Clear communication will help to diminish fear among staff who may equate cost savings opportunities with job loss.

A tangible goal may be a 10% reduction in costly OEM contracts. Can these repairs be handled by an ISO? There tends to be a fear associated with moving contracts away from the OEM. To ease this fear simply ask the ISOs engineers where they previously worked. Often times the answer is they worked for the OEM that made the equipment being repaired or they are OEM trained and certified.  Not only can they provide outstanding maintenance service but the customer service and attention to your needs on a facility level will regularly surpass the OEM. Even if the OEMs were willing to base their charges more reasonably on the cost of providing service, they would generally be much higher than they should be due to the elevated costs to the OEM. The reasons for this are clear. The design, manufacture and distribution of medical equipment is a global enterprise, and the OEMs are organized along these lines. For them to do otherwise would be impractical.

Significant service cost savings can be realized after reviewing your current medical equipment service strategy. Note that not all facilities have adequate Clinical Engineering (Biomed) or Health System support to help reduce expenses. Rather, they can take advantage of negotiating the proper contract based on their own needs assessment.

Medical Equipment Source,  Contact use to help you start reducing your costs today

888-633-5849

Medical Equipment Source has always made a concerted effort to positively impact the communities where it does business and is mindful of its impact on the world.

By the nature of what Medical Equipment Source does, it is a natural recycler.  An important part of our business model is searching and acquiring pre-owned and surplus laboratory equipment.  Then, the company remanufactures these and markets them to new programs looking for affordable and specific instrumentation.  Without this type of effort, most lab equipment does not see the end of its useful life.  Before Medical Equipment Source, it was too difficult for hospitals to buy or sell these pieces of equipment.  As a result, many valuable items either ended up in closets, storage facilities or landfills.  Through the company’s knowledge, remanufacturing expertise and marketing know-how, it makes finding and selling this equipment possible.  In addition, the company extends the life of instruments while at the same time maximizing their value through superior service/PM programs.

By the nature of what Medical Equipment Source does, it is a natural recycler.  An important part of our business model is searching and acquiring pre-owned and surplus laboratory equipment.

Medical Equipment Source remains fully committed to achieving environmental excellence and to working with its partners and suppliers to meet the environmental commitments summarized below:

• Promote the safe and responsible reuse, recycling and disposition of its products at the end of their useful life.
• Promote relevant environmental initiatives by its internal organizations, managers, employees, strategic partners and suppliers.
• Provide high quality laboratory equipment at a lower cost that helps keep healthcare costs down.
• Provide PM/Service that helps extend the useful life and operation function.
• Provide Warranties on all our remanufactured equipment.

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Service Optimization that Drives Efficiencies and Reduces Total Cost of Ownership

Many laboratories are under constant pressure to increase productivity while simultaneously reducing their budget.  This challenging task is complicated by the fact that laboratory environments have little room for error and require instrumentation and equipment to be in top operating condition to maintain efficiencies and generate quality data.  While laboratories are notoriously expensive to run, equipment service contracts typically make a huge dent in the budget.

Medical Equipment Source provides custom asset management service programs to laboratories that ensure both healthcare and business objectives are achieved.  Our programs incorporate proven processes that model the various factors affecting your operation, including: reliability, cost, uptime, compliance, data quality and security.  This approach goes beyond the typical service metrics to truly optimize an asset support program at any scale – from just a few assets to an entire laboratory.

A Medical Equipment Source’s Lab Asset Management Program can reduce costs dramatically through:

• One call support and rapid service response.  Simply report the problem and our team will take action.
• Consolidated vendor service contracts and standardize services.
• Streamlined equipment Preventative Maintenance services using MES’s expert field services.  Our workforce is thoroughly trained on a wide array of Histology equipment.
• Improved asset data management.  Our service and asset management system manages workflows and maintains all of your asset data and service records.
• Improve productivity.  More uptime for your equipment and less time required of your Lab team means more productive time in the lab.
• Optimize your capital assets.  Learn more about which assets are under-utilized or expensive to maintain in order to drive capital expenditure decision making.

We offer support for many Histology equipment manufacturers and models – usually regardless of age.  Our service programs are supported by robust quality and training systems operated by internal service development engineers and we maintain an extensive library of qualification protocols that can be customized to meet your unique requirements.

Call Medical Equipment Source to learn more about a custom asset management program that can optimize performance and asset support while lowering the cost of ownership.

Taking advantage of assumptions to save money in your laboratory.

The Problem

Given the constraints of an ever changing medical system we are constantly tasked with improving or maintaining outcomes and lowering cost at the same time.  This is a daunting task that cannot happen with the status quo.  It seems impossible to achieve but, it is achievable in certain spaces within healthcare.

The Reality

One of these areas is the Pathology laboratory.   If we take a more in-depth look at the laboratory you will find that the technology in that space has basically stayed the same over the last 20 to 30 years.  Yes, we have touch screens and some other electronics, but the basic function of the equipment is unchanged.

The Lie

New is not a quality criteria per se.  Because it is new does not mean that it is of higher quality.  Each year thousands of dollars are budgeted and spent in healthcare facilities around the globe for new equipment.  The unconscious assumption is that the technology is superior and the quality is higher.  Nothing can be further from the truth.  The reality is that new technology is not time-tested, and the build quality is untested in the histology laboratory.  Think about the number of times a new piece of equipment is installed in a laboratory, and the machine fails soon afterwards. The question that must be asked, is the value in new technology worth the risk over the value of time-tested equipment?  More to the point, is it worth the risk and the cost premium of 30-60% for new equipment?

The Solution

I want to suggest that we take a different approach to this process and still have high quality outcomes, but with a much lower cost to the institution.  If I was to say we could maintain quality and lower the cost to your facility, would you be interested?

Medical Equipment Source (MES) has a solution, based in our ability to remanufacture existing pathology equipment.  What we want you to consider is that we remanufacture your existing equipment on an ongoing and as needed basis.  The benefit to the Hospital is quantifiable and immediate.  The acquisition cost is significantly lower than new equipment and at a minimum of open market remanufactured pricing.  Therefore, for approximately a 1/3^rd of the cost of new equipment, you can maintain the quality of care, lower your capital outlay, and free up capital for other areas of need or new technology.  It is environmentally responsible at the same time.

Our proprietary MES remanufacturing process fully reconditions the machines, including identifying and replacing the key components designed to fail first.  We are restoring the value of equipment that has a proven longevity to its like-new state.  We back up this equipment with full warranties and PM Service programs. The result is a smooth and efficient functioning lab with reduced downtime while using only a fraction of your budget.

Our Challenge

Reach out to MES to learn about how our services can keep your lab functioning at optimal levels.   And, if you call within the next 48 hours we will throw in a pet frog.  Call us at 888-633-5849.

-Baxter

The healthcare climate continues to forecast increased mergers & acquisitions for hospitals in 2014.  Activity surged to a high level between 2011 and 2013, and there are few signs of it slowing down.

I recently read an article from Becker’s Hospital Review by Bob Herman, that highlights six specific trends in hospital transactions we should look for in 2014.  I would like to share them below:

“According to a whitepaper from healthcare financial advisory firm Ponder & Co., there are six specific trends to watch as the year unfolds.

1. For-profit chains may be less aggressive. Last year, the hospital world was defined by several large mega-mergers. Two of the most influential were mergers between Franklin, Tenn.-based Community Health Systems and Naples, Fla.-based Health Management Associates, and Dallas-based Tenet Healthcare Corp. and Nashville, Tenn.-based Vanguard Health Systems. The for-profit, acute-care hospital sector is now highly consolidated. CHS and Tenet are not likely to pursue new, large acquisitions during the next 12 months, according to the whitepaper, as they continue to absorb the new systems and streamline operations.

2. Large, healthy nonprofit systems are wary of troubled hospital transactions. Increasingly, more small and mid-sized community hospitals are experiencing heavy operating pressures. While many financially struggling hospitals still have hope of finding partners, nonprofit systems will look at those types of deals with a much more critical eye. “Many of these systems are currently being approached by numerous hospitals seeking larger partners to be the white knight,” the whitepaper reads. “Not-for-profit systems do not have unlimited capability for such deals and are often very protective of their bond credit ratings.”

3. There are still likely to be many large, nonprofit transactions this year. Much like the CHS and Tenet deals, there were several large nonprofit mega-mergers last year. Ponder & Co. advisers believe the nonprofit sector will remain active, especially when it comes to large systems. For example, Orlando (Fla.) Health and Wellmont Health System in Kingston, Tenn., have both announced they are actively looking for partners.

4. Regional system mergers will increase. Ponder & Co. and other healthcare experts believe mid-size, regional health systems (or those with $800 million in annual revenue to several billion dollars in annual revenue) will create partnerships, perhaps in adjacent markets, to “broaden regional strength, take scale to a new level and prepare for the healthcare changes ahead.”

5. Some states are running out of independent hospitals to acquire. Health system transactions may be on the rise because, simply put, many states are running out of independent community hospitals. For example, Ponder & Co. analysts said Virginia has only seven independent hospitals with more than 100 beds. Many states, and markets, have almost reached their saturation point.

6. Outpatient facilities will be more appetizing than inpatient. Acquiring inpatient, acute-care hospitals garners much of the attention, but the inpatient side is no longer the “money maker” of a health system, according to the report. Large outpatient centers and other clinical integration groups have become bigger pieces in the M&A game.”

Q1 of 2014 has passed, have you seen evidence of these trends?  Please share examples in the comments below.

Until next time,

Baxter

Medical laboratory test data is one cornerstone of this data mining activity and pathologists are well-positioned to take a more prominent role in helping clinicians use lab tests more effectively Data mining has arrived at many hospitals and health systems. The goal is to mine large quantities of clinical data to identify useful patterns that can […] …read more

Source: Dark Daily

What are the biggest obstacles in building quality improvement for better outcomes?

A recent White Paper titled “Strategic Quality Improvement, the Infrastructure for Success,” by Robert Sutter, RN, MBA, MHA, points out a strategic approach for healthcare quality improvement.  I think his comments are beneficial to the hospital outcomes discussion, because process improvement never takes a day off on any level.

“I believe that Joseph Juran said it best: “All quality improvement takes place project by project and in no other way”. There is a great deal of wisdom and insight contained in this famous quote. In Joseph Juran’s words: organizations need to design an infrastructure that will enable them to carry out unprecedented numbers of quality improvement projects at an unprecedented pace. In other words, healthcare organizations need to maximize the number of successful quality improvement projects completed within a given time frame in order to strategically improve the quality of care delivered.”

“The basic organizational infrastructure components required to maximize the number of successful quality improvement projects completed within a given time frame are:

 Strategic quality objectives
 Quality council
 Systematic project identification-selection-prioritization system
 Properly trained project champions and team leaders
 Structured project review process
 Project control system
 Reward and recognition system that promotes quality improvement
 Project improvement measurement

All of these components are essential. If one, or more, component is missing – or not functioning properly – the ability to strategically improve quality will be compromised.”

To read Sutter’s full white paper, click here.

What have you found to be successful in implementing your quality improvement projects?  I know that our clients tend to have more than one of the organizational infrastructure components missing from their better healthcare outcomes & process improvement metrics.  Which do you see as the biggest obstacles with your clientele or hospital?

Until Next Week,

Baxter

“The cost effectiveness of that investment yielded an added revenue stream of 7X the cost of the equipment in the first full year of operation.” – Jonathan M. Banta, Executive VP

What have Hospital Administrators missed?

Every C-Leveled executive faces many challenges; however, the C-Leveled hospital administrator faces a unique array of challenges in this new market.  These issues include the Affordable Care Act (ACA), cuts in reimbursement by Medicare and Medicaid, and escalating costs.  The old model of working with a value analysis team and supply chain to balance out the right mix of supplies and capital equipment with GPO pricing simply is not enough to handle the new hurdles created in today’s market.  The executive needs to consider new alternatives in the purchasing supply chain.  One such tool is purchasing high quality remanufactured capital equipment.

Remanufactured equipment can lower acquisition costs, increase ROI and be a green alternative to new capital equipment.  On average, the acquisition cost of a remanufactured piece of equipment is 30% to 60% below the OEM price.  Furthermore, remanufactured equipment allows the administrator to cut costs without decreasing services therefore providing an alternative that will meet their budgetary goals while maintaining high quality outcomes. Before finalizing your next capital purchase, consider the benefits of purchasing remanufactured equipment. This alternative will give the hospital administrator a tool to ease some of the constraints in the current healthcare arena and improve their bottom line.

The following testimonial is just one example of a C-Leveled executive who has embraced the value proposition of remanufactured equipment:

“As reimbursement cuts continue to dominate the healthcare industry, management is tasked with uncovering new revenue opportunities that help off-set the lost revenue every year. At the end of 2012, we made a business decision to purchase remanufactured laboratory equipment from Medical Equipment Source to start our new lab. Wendy, Luigi and the rest of the team at Medical Equipment Source assisted us in all aspects of designing and building the lab as well as helped us choose the equipment that best fit our needs. The cost effectiveness of that investment yielded an added revenue stream of 7X the cost of the equipment in the first full year of operation. We have been thrilled with the quality of the equipment and post-sale support and have been thoroughly impressed by MES’ “under-sell” and “over-deliver” mentality and constant commitment to excellence. We believe we have a found a true partner for all of our lab equipment needs going forward.”

Jonathan M. Banta
Executive Vice President
Dermatology & Skin Cancer Surgery Center

Regards,

Joe Colao
Director of Sales
Medical Equipment Source

Market indicators support predictions of tougher financial times ahead for hospital-based clinical laboratories and pathology groups New statistics for 2013 on employment in the healthcare and hospital sectors show the lowest rates of growth since 1990. This is a signal to pathologists and clinical laboratory executives that much belt-tightening is taking place by all types […] …read more

Source: Dark Daily