Getting Serious about Asset Management By Don Dovgin
One meaningful question is on the mind of clincal people almost constantly; Where is it Now? The pressures of regulatory requirements coupled with never-ending rising costs have created a fury of frustration and chaos in the healthcare marketplace. Learn how technology has changed the landscape, now allowing clinicians to know exactly where all of their equipment is all of the time, while driving out the significant cost oft finding it.
(PRWEB) August 23, 2003
Who borrowed the monitor from the ER, and did not return it? When did you last see that infusion pump? Where did you lose that abandoned wheel chair? But most importantlyÂ…WHERE IS IT NOW? These questions are commonplace in hospitals as they attempt to keep track of their equipment.
The pressures of regulatory requirements coupled with never-ending rising costs have created a fury of frustration and chaos in the healthcare marketplace. This has driven the need for a more effective tracking solution for equipment, inventory, materials and workflow. Asset Management Tracking (AMT) is new technology that provides a competitive advantage for organizations that plan to adopt it.
Conventional hospital management systems have minimal capability in the way of asset tracking. They require costly paper and bar coding for most processes, and the success and accuracy of these systems are limited and questionable. Today, new asset tracking technology has pioneered a seamless management solution that delivers instant visibility in real time.
Using technologies driven by wireless tags, fixed position antennas and web-enabled software, AMT provides visibility with proven efficiency and operating returns. Through perpetual monitoring of the unique wireless tag signal, AMT can pinpoint any itemÂ’s exact location 24 hours a day by using Radio Frequency (RF) devices for tracking.
When properly attached, RF transmitters act like homing devices to track all different types of assets. They can be installed on infusion pumps, ECGÂ’s, ventilators, cardiac monitors, broncoscopes and hundreds of other types of assets. But how does RFID and more specifically asset tracking really benefit the hospital?
A Laurel research study indicates that a typical hospital carries an average of $3 million to $4 million in hard clinical and non-clinical assets. The same survey also states that most hospitals achieve a mere 57% utilization rate of capital assets.
A typical hospital has an inventory of 8 portable clinical devices per bed, at a cost that ranges from $500 for a wheelchair to $15,000 for a respiratory ventilator. Of these, 15% to 20% are missing at any given time. Hard cost for replacing this equipment is $500,000 per year. That, however, is not the end of the story.
Take for example a fully equipped surgical team. Average cost for this clinical labor is $600 per hour. A team minimally spends 10 minutes locating, preparing and assembling their surgical instruments and equipment. For a 12 surgery per day hospital, this wasteful time easily exceeds $400,000. What becomes even more compelling are the lost billing opportunities.
A Recent Washington Medical Study indicates a typical 950 bed hospital employs approximately 300 IV pumps at a cost of $25 each per day. This same hospital keeps 600 pumps on hand at all times to serve their patient population. If all IV pumps can be accounted for at all times, the actual number of pumps needed can be reduced to 330. This represents more than $2 million annual savings for the hospital.
This same study also points out that of the 300 beds using the IV pumps daily, less than 150 patients were actually paying the “per day” cost to the hospital because of poor equipment tracking. AMT could help the typical 900 bed hospital recover almost $8 million of annual lost charges.
Another attractive opportunity to healthcare providers is minimizing liability with regulatory standards with HIPPAA and JCHAO. HIPPAA cites “media controls”, articulating guidelines of equipment management and data capture. Because RFID tags act as transmitters, they can send signals back to a computer database to capture information.
This allows hospitals to better understand when equipment was used and which patients used them to schedule maintenance. It also acts as a quality control system to minimize equipment decontamination violations, by identifying patient-to-patient equipment transfer problems. These accurate real time records easily exceed the regulatory requirements for these two organizations.
By improving the medical equipment management process, AMT allows healthcare facilities to increase utilization rates and reduce equipment inventory. The system identifies underutilized equipment (which can be sold for cash), reduces capital expenditures and decreases a facilityÂ’s reliance on equipment rentals. The resulting savings generate a strong return on investment, and the typical healthcare facility experiences a payback period of less than 12 months.
Clinical people at work admit healthcare organizations are quickly realizing the need for good asset management in their workplace. For hospitals that have not yet moved to this type of system, there is going to be an acceleration of progress, particularly in light of HIPPAA and overall security. In practical terms the bottom line is smooth business continuity in terms of work flow and information.
Most hospitals cannot afford to be down for more than an hour. How long can you afford to be down and how much will it cost just because you canÂ’t find equipment?
Don Dovgin is a partner for the Laurel Group in Chicago, specialists in healthcare management. To learn more about asset management, call him at 847-975-8300 or email him at Dovgin@laurelconsult. com.
