TRIMEDX Vice President of Clinical Asset Management David Stevens and President Emeritus of Clinical Asset Management Dave Klumpe were recently featured in a Becker’s Hospital Review article on clinical asset management and how health systems can transform their program and open up financial and operational opportunities in times with continued demands and challenges. The published article, as it appeared May 3, 2023, is below.
Healthcare organizations today are faced with multiple competing financial and operational challenges that make it difficult to strategically plan long-term.
One strategic lever that is often under-recognized is a hospital’s clinical asset inventory. Providing quality patient care requires sufficient equipment, especially as patient volumes continue to shift away from the acute care setting. However, at the same time, hospital budgets and operating margins are shrinking, making it imperative for hospitals to rethink how assets are planned for, invested in, and managed.
At Becker's Hospital Review's 13th Annual Meeting, in an executive roundtable sponsored by TRIMEDX, David Stevens, vice president of clinical asset management, and David Klumpe, president emeritus, clinical asset management, led a discussion about data-driven asset management in healthcare.
Five key takeaways were:
- Clinical assets have a major impact on hospital finances and are often overlooked as an opportunity for cost reduction. Clinical assets represent 25 percent of hospitals' capital expenditures. In addition, the operating expense component of medical equipment is important but is often missed in capital planning. TRIMEDX found that for every one million dollars spent in CapEx on clinical assets, organizations can expect an additional $50,000 to $100,000 in future annual operating expenses — including equipment maintenance and upgrades. These factors, when combined together, highlight a significant potential for financial savings when managed appropriately.
- Hospitals own more clinical assets than they use or need. Medical device monitoring technologies and industry benchmarks reveal that most acute care hospitals have more equipment than they need to treat their current patient volumes. Hospitals have an average device utilization of only 40 to 50 percent, creating an opportunity for equipment redistribution to other sites. "Across the board, the health systems that we work with have a lot more equipment than they're actually using and they're pouring more and more capital into that fleet and into their operating expenses," Dr. Klumpe said.
- Reallocating clinical assets to other sites of care can address equipment needs while containing costs. Approximately 44 percent of the care delivered will shift outside the four walls of the hospital by 2030. The shift in patient volumes also means there is a shift in equipment needs throughout the health system. Being able to identify underutilized assets in one setting and strategically reallocate them to another setting with increasing volumes can address growing patient needs without inflating capital budgets and operations expenses. Hospitals should get in the habit of asking if there is equipment elsewhere that can be better utilized before approving large equipment purchase requests.
- Strategic capital planning requires governance that uses objective data and involves multiple stakeholders. To fully leverage the benefits of their clinical asset inventory, healthcare organizations should create a multi-level structured approach to capital planning that bases decisions on objective data. This starts with gaining visibility into their clinical asset inventory. With one source of truth, utilization metrics, cybersecurity risks, service history, and FDA alerts can all be aggregated and tracked. This data will help with identifying excess inventory at acute sites, acting on prioritized devices, reallocating devices to higher clinical demand sites, and retiring unneeded devices. Alongside the data, having communication and processes in place creates a more effective asset management strategy. "When we start looking at how . . . you pull all this together, I think the important part here is: It starts out with visibility [and] transparency and ends with communication," Mr. Stevens said. Keeping all impacted stakeholders involved from clinical engineering to clinical provider to the executive team ensures the entire organization is aligned on how to meet financial, operational, and clinical goals.
- A comprehensive clinical asset management framework can provide scalable solutions to support long-term growth strategies. Realizing opportunities for growth requires understanding how to maximize operations within the context of both a given organization and industry-wide benchmarks. The TRIMEDX clinical asset management team applies wide-ranging and detailed industry knowledge, working with stakeholders to bring forward opportunities and translate them into action. TRIMEDX has helped organizations identify potential opportunities for 10-20% OpEx savings and 25-35% CapEx avoidance and deferral.
Gaining insights into clinical assets at scale requires technology, but the greatest impact comes from combining technology, operational processes, and data.