Medical Technology Management Conference for Hospital Administrators Organized by the Ministry of Pu

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Medical Technology Management Conference for
Hospital AdministratorsOrganized by the
Ministry of Public Health, Thailand23-25 July
2003 Medical Equipment Planning, Assessment,
Acquisition and Disposition

• Col Lin Yeo
• Medical Technology Manager
• Asia Bio Systems

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Personal Introduction

• Medical Technology Manager
• Job responsibilities
• Equipment planning
• Audit of current medical equipment management
  practices
• Research and develop products and services that
  will benefit our customers

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Educational Background

• Monash University, Melbourne, Australia
• Bachelor in Engineering (Chemical)
• Masters in Engineering Science (Biomedical
  Engineering)

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Work Experience

• Monash University - Centre for Biomedical
  Engineering
• Review of Capital Equipment Funding Strategy for
  Public Hospitals in Victoria (Department of Human
  Services)
• Victorian Public Hospitals Medical Equipment Year
  2000 Project (Department of Human Services)
• Medical Equipment Asset Evaluation at Austin and
  Repatriation Medical Center (Sinclair Knight and
  Merz)

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Introduction

• When and why to buy what from whom for how much!
• Avoid buying what you dont need for a high
  price and at the wrong time
• Buying the right equipment, for the lowest price,
  for the right reasons and at the right time.

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Medical Equipment Technology?

• Technology to improve clinical outcomes, reduce
  costs, and improve quality of life for patients
• Major asset of the health care industry
• Year 2001, total medical devices sales volume
  THB 15 Billion
• Health care compression
• Increasingly important to manage medical
  equipment to contain costs and improve quality
  and performance

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Why Plan?

• A significant portion of equipment (i.e. 25-50)
  that exists in developing countries cannot be
  used
• Main causes
• Lack of funds
• Improper management
• Preventative Medicine approach

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Medical Equipment Planning Cycle

• Planning- What? When?
• Assessment- Why? Who?
• Acquisition- How? Cost?
• Disposition- What? When?

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Equipment Lifecycle

• Installation
• Acceptance testing and approval
• Clinical Use
• Planned Maintenance and Unplanned Maintenance
  (Corrective)
• Decommissioning/Disposition

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Medical Equipment Planning Cycle
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Medical Technology Advisory Committee (MTAC)

• Multi-discipline- clinical and non-clinical staff
• Advises hospital strategic planning committee and
  capital budget committee
• Manage all medical technology including medical
  equipment planning process

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1. Equipment Planning

• What? When?
• Systematic approach to determine the hospitals
  equipment needs
• Need a complete, accurate and up-to-date medical
  equipment inventory
• Purchase Cost
• Purchase Date
• Equipment Type
• Department Name

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Medical Equipment Inventory

• Prioritizing equipment needs and determining
  equipment replacement
• Identifying how and when maintenance is to be
  conducted and how much this costs
• Utilization records
• Maintenance and repair records
• Acceptance testing
• Ease in locating medical equipment and
• Minimizing safety risks

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Planning Considerations

• Clinical Effectiveness
• Cost of Ownership
• Strategic medical technology direction
• Client and Medical Staff Perception

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i. Clinical Effectiveness

• Availability (MTBF) how often it breaks
• Downtime duration
• Age - over 7 years very difficult to get parts
  from anywhere thus may result in longer
  downtimes
• Accuracy/Effectiveness of diagnosis and treatment
• Speed of procedure
• Spare critical equipment for emergency use

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ii. Cost of Ownership

• Consumables consumption (cost, volume and usage
  frequency)
• Speed (faster studies more patient throughput)
• Medical Expenditure Limit- Cost of Maintenance
  and Repair versus Replace
• 2nd hand resale value/trade in price

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MEL Example
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MEL Case Studies
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iii. Strategic medical technology direction

• Equipment standardization- bundled
  consumables/service contracts/ ease of user
  training, etc
• Technology lifecycle of the equipment
• Latest medical technology- marketing value
• Connectivity- internally and externally
• Mobility and portability- multi-location

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iv. Patient and Medical Staff Perception

• Age
• Appearance
• Technical look/feel

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Advantages of Planning

• Facilitates introduction of new technology
• Standardization of equipment
• Coordinated purchasing approach
• Multiple site/facility service contract agreements

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2. Equipment Assessment

• Why? Who?
• Collecting data for assessment
• Lifecycle cost analysis
• Historical utilization and consumption data
• Installation and construction needs
• Manufacturers profile/background
• On-site demonstration, clinical trials and bench
  tests
• Upgrading current technology-forklift upgrade
• Alternative technologies
• Involve ALL key stakeholders
• Well documented, transparent and accountable

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Advantages of Assessment

• Select the correct equipment to purchase
• All the hospitals requirements will be met
• Quicken the assessment process for the same
  equipment type

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3. Equipment Acquisition

• How? Cost?
• Manage the acquisition process
• Investigate best acquisition option
• Refining quotations from equipment suppliers
• Negotiating with suppliers

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Acquisition Options

• Purchase Outright
• Operating Lease
• Finance Lease
• Vendor financing
• Rental (pay per use)
• Revenue sharing
• Group Purchase

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Group Purchasing Organizations (GPO)

• Central body that manages the purchasing process
  for its members
• Scope medical consumables and medical supplies,
  pharmaceuticals, and medical equipment
• HIGPA reported Health care providers report they
  save between 10-15 by channeling purchases
  through GPOs, tottaling USD19-33.7 billion in
  savings for 2002
• 10 savings on purchasing in Thailand will result
  in a savings of THB 1.5 billion per year

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Advantage of Managing Acquisition

• Investigate best financial option for the
  hospital
• Save baht

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4. Equipment Disposition

• Final step, but also the 1st step- medical
  equipment planning lifecycle
• Identification of equipment that can no longer
  serve its primary purpose
• Assessment of a secondary and/or tertiary purpose
  within the hospital
• Balance of the need for NEW versus USED

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Disposition Options

• Relocation
• Trade-In
• Sell
• Donate
• Dispose/Scrap

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Advantages of Managing Disposition

• Ensure complete and effective use of equipment
• Asset is formally removed from the accounting
  records by Finance and Accounting

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Example of an Annual Medical Equipment Planning
Process
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Medical Equipment Planning Process (1)

• Initial audit of existing medical equipment in
  the hospital January February
• Conduct a medical technology assessment for new
  and emerging technologies to fit with current or
  desired clinical services March-April
• Planning for replacement and selection of new
  technologies May-June

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Medical Equipment Planning Process (2)

• Prioritizing for technology acquisition July
  August
• Provide input to the capital budgeting process
  September-October
• Implement equipment acquisition and monitor
  ongoing utilization on-going
• Dispose of equipment on-going

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Example Short Term Project

• Profile all medical equipment in the hospital
  with a purchase cost above B500,000
• Analyze utilization, technology trends,
  hospitals strategic and clinical directions
• Project their replacement costs into a 5-year
  capital expenditure plan

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Example of Long Term Capital Budget Planning
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Take Away Messages (1)

• Medical equipment inventory
• Complete
• Accurate
• Up-to-date
• Set-up a Medical Technology Advisory Committee
• Develop medical technology strategic direction

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Take Away Messages (2)

• Develop in-house medical equipment planning,
  assessment, acquisition and disposition policies
  and procedures
• Develop a 5-year major medical equipment capital
  budget

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Excellent References

• ECRI
• (http//www.ecri.org)
• MD Buyline
• (http//www.mdbuyline.com/)
• NHS Executive, The Management of Medical
  Equipment in NHS Acute Trusts in England, June
  1999
• (http//www.nao.gov.uk/publications/nao_reports/98
  99475.pdf)
• Auditor General, Victoria, Managing Medical
  Equipment in Public Hospitals, March 2003
• (http//www.audit.vic.gov.au/reports_par/medical_r
  eport.pdf)

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Buy the right equipment, for the lowest price,
for the right reasons at the right time!
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Questions and Comments?
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Kob Khun Krub!

• Col Lin Yeo
• Asia Bio Systems
• Tel [phone]
• e-mail col_at_asiabio.com

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Benefits of managing technology

• Reduction in medical technology ownership costs
• Purchase cost
• Maintenance and repair costs
• Replacement parts and consumables cost
• User training cost
• Increase in lifetime of equipment- reducing
  capital expenditure
• Long term medical equipment capital budget
  expenditure
• Increase the availability of equipment, and
  reduce the downtime