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Equipment Replacement Strategies - Hunting Down Cost Saving Measures

Equipment Replacement Strategies - Hunting Down Cost Saving Measures

Wed Feb 04 2015By TechNation Magazine

 

 

Equipment Replacement Strategies - Hunting Down Cost Saving Measures

 

Most hospitals have to be run like businesses with a constant eye on the numbers and that has become more critical in the past few years. Budgets are impacted by new constraints and subjected to penalties that can be substantial. CMS is on the lookout for any healthcare provider that takes Medicare and misses their metrics. Those penalties, or even the threat of a potential penalty, is enough to take slim budgets and make them into tight budgets. Medicare reimbursement penalties are a game changer.

Hospitals across the country, especially in poorer areas, are facing penalties based on the readmission of Medicare patients. Medicare cuts reimbursements based on the number of patients who have to make a return visit to the hospital for everything from complications after knee replacement surgery to heart failure. In New York state alone, 80 percent of hospitals face these penalties.

Medicare considers these readmissions as avoidable and the profits made by hospitals from these returning patients is something the feds want to stop. These penalties have doubled in the past year. In combating the impact of these penalties, many hospitals and health systems have instituted other services, like home care and telemedicine, to help reduce the numbers of readmissions. These additional services also impact the bottom line.

For these reasons, and because hospitals are businesses, the reality of measured patient safety, medical equipment buying strategies, maintenance considerations and budget must all coalesce. They cannot be mutually exclusive and all have to recognize the realities of a changing healthcare environment. This impacts every capital purchase decision, every equipment retirement decision and replacement assessments.

Determining what to buy, when to buy it and what to remove from service is a huge issue. It is a task taken on by HTM professionals in every corner of the country alongside those tasked with scrutinizing their facility’s budget. When the capital dollars aren’t there, or are sparse, what are the options?

 

When to Pull the Trigger

Doug Dreps, MBA, director of Eastern Regional Operations for Mercy Clinical Engineering Services in St. Louis, Mo., characterizes the environment that these decisions are made in as “difficult times.”

“We concentrate on $150K and above. With limited capital these days, end of life items we still support, until we no longer can,” he says. “We have even had local machine shops build mechanical parts for imaging units to extend their life. We have a capital replacement matrix we use that scores equipment and then we make recommendations to our departments and capital review committees.”

Dreps points out that hospital leadership still depends on the HTM professionals to provide accurate data to help with these decisions when funding is squeezed.

“I stopped doing projection past one year several years ago as our capital dollars have shrank. Some of our end of life items, we end up maintaining until we have to replace it due to failure and the unit can no longer be repaired. Of course, we do take into effect a failed unit that is end of life could shut down a service line, so those instances are looked at differently. Patient safety, technology obsolesce and reliability are all very important factors.”

Dreps says that it is a red flag when service costs reach 50 percent of purchase price.

 

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