Leveraging technology and informatics to drive financial health
Responding to increased financial pressures across health systems
The face of healthcare and the delivery of care is changing at a rapid pace. These changes are placing increased pressure on health systems to find new and innovative ways to respond to these challenges. One oftenoverlooked opportunity lies in the strategic management of a health systems' medical device inventory.
What healthcare trends are forcing health systems to find new ways to support their financial health?
LH: Care continues to shift from acute care settings to alternate sites of care as patients shoulder more of the cost and are looking for more affordable options. Additionally, COVID-19 revealed that care can effectively be delivered in these alternate settings. Lowering reimbursement rates also support this transition. Health systems will continue to evaluate the impact these changes have on their financial health and resources needed to deliver care across all sites of care.
What financial “levers” can health systems pull in response to these challenges?
LH: One area of untapped opportunity is the medical device inventory. A significant portion of budgets are allocated to acquiring new devices and to ongoing repair and maintenance. While these devices are critical for treating patients, they can also support an organization's costeffective care strategy. This can be achieved by asking:
1. Should I replace this device?
2. Is there something new or better on the market?
3. Is this device utilized in this care setting?
4. Do any devices need upgrades to reduce cybersecurity risk?
5. Should I dispose of devices no longer needed?
6. Should I reallocate devices to other sites of care where there is increased patient volume?
A comprehensive clinical asset management program transitions medical devices from an expense to a strategic financial lever, supporting care redesign strategies and cost transformation. Strategic decision-making can reduce OpEx and CapEx on medical devices and, in some cases, return dollars to the system by selling surplus devices. Instead of looking at clinical engineering as a break/fix response to medical device usage, health systems have an opportunity to take a holistic view of how they manage their inventory— what we refer to as comprehensive clinical asset management.
How would a health system gather the data they need to support these types of decisions?
LH: Start with a comprehensive medical device inventory, including accurate quantities, service metrics including downtime and cost to repair, location and actual device usage. Based on this information and a structured clinical asset informatics solution, health systems can drive intelligent decisions around asset acquisition and optimization. Benefits include avoiding unnecessary capital purchases, reducing repair and maintenance costs, and improving device availability.
How does informatics support increased visibility and enable assets as a financial lever?
LH: While data visibility is the first step in moving from facilitylevel repairs to strategic systemwide asset lifecycle decisions, most organizations' sheer quantity of devices require additional analytics. Analytics should benchmark data. Do you have the number of devices needed to support the volume of care, a cybersecurity profile and algorithms to identify if a device should be replaced, upgraded, dispositioned or reallocated? Understanding your devices at this level helps leverage data and marry the volume forecasts, the shift in care and the equipment you need to support care delivery to create an ideal situation for implementing your overall care strategy.
Can you share examples of how clients have realized success by pulling these financial levers?
LH: One client recently leveraged their device location and utilization visibility for infusion pumps to move excess pumps from one care setting to another. This helped them immediately avoid unnecessary operational/rental expense and reduce capital expense by not purchasing more equipment for one location.
We understand this is no small undertaking. Some health systems choose to invest in technology to build their own informatics solution while another more cost- and time-efficient option is partnering with a provider who has the necessary infrastructure and technology to provide the data, when you need it, to effectively pull these key financial levers. Either way, an investment in gathering and leveraging informatics will support your response to market challenges now and in the future.