Tag Archives: capital equipment

Best Practices in Benchmarking Medical Equipment

by Bryan Ramey, Mitchell Planning Associates, and Mike Gerhardt, Senior Director, Facility Management Specialists, Intalere

Across every industry, benchmarking is an essential tool to help organizations understand key metrics in determining their position in the marketplace. In today’s healthcare hospital industry, Supply Chain departments are using monthly, quarterly and annual metrics such as the hospital’s total patient days versus their total spend for disposable and consumable supplies, medical devices, implants and instruments to gauge not only how they compare to similar hospitals, but also how similar departments within the hospital compare to each other, i.e. Medical, Cardiac, Surgical and Neuro ICUs. But the capital equipment process within hospitals still lacks efficiency and an effective way to drive down the cost to acquire medical equipment.

Hospitals are now being challenged more than ever to find ways of cutting cost and reducing their overall bottom line. Benchmarking medical equipment by utilizing good, reliable data, along with competitive pricing is a way to contribute to the organizational cost reduction goal. After all, over the course of a hospital fiscal year, the total spend for medical equipment ends up being one of the largest cash outflows. Furthermore, medical equipment procured for new hospital construction projects remains to be the second largest line item cost next to the overall cost of actual construction. So a process which incorporates unreliable data and non-competitive pricing, along with bad habits like benchmarking only to “check the box” doesn’t provide much value for the hospital.

So as you begin to procure your equipment during the annual capital process, it’s important that you can trust the information. The data should be transparent and easy to understand, the provider of the data should be knowledgeable about the benchmarks they are presenting, and the benchmarks should be representative of best-in-class pricing. What good is it to compare your potential equipment purchase to quotes that haven’t been negotiated down to the final price when there are resources to help determine what you should actually be paying? Having transparent data and best-in-class pricing strengthens the ability to determine the “end” price so you can “begin” negotiations with the end in mind. Possessing knowledge of final landed costs can produce an additional cost savings of 7-10%.

For example, to be the fastest runner in the world, one must know that the fastest time is 9.58 seconds to run 100 meters. If the runner is unaware of the world’s best time, then he only beats himself for not dedicating the resources to knowing and understanding the facts. The same goes for benchmarking medical equipment. Understanding the data and knowing the actual prices paid will help your Supply Chain team deliver deeper discounts and better deals, hence, making the capital process much more efficient and effective.

Where will you end up? What is your target? What is the outcome? These are questions that should be answered prior to negotiating. How do you determine the appropriate end? Compare to previous purchases, compare to similar purchases, compare to other organizations with like or similar purchases, and compare to best-in-class purchases. For an aspiring Supply Chain team that truly wants to be the best, one must know what constitutes as being the best, how high the bar is set to reach the best, and in the world of procurement, how low the actual price is to be the best in class.

To learn more about Intalere and Mitchell Planning’s Equipment Planning solutions, click here.

Is Buying Refurbished Equipment Right for Your Healthcare Facility?

by Monica Caldwell, Director, Contracting Solutions, Intalere, and David McAndrews, Senior Vice President, Imaging Solutions, Block Imaging

With healthcare facilities balancing cost pressures against the need to upgrade equipment and facilities, the use of refurbished healthcare equipment as a low-cost alternative has grown significantly in the past several years.

Previously, options for buying refurbished equipment were narrow, with only a handful of suppliers who were just beginning to build programs that offered expertise, quality and excellent customer service. Over the past decade, however, the market has matured and quality options have grown in terms of equipment selection, service support and replacement parts.

Among the benefits of buying refurbished equipment, cost savings generally tops the list. Many times a refurbished system saves its buyer more than 60 percent on the cost of new equipment. This brings a faster return on investment and helps justify the upgrade of needed equipment. As consolidation occurs in the healthcare industry and organizations acquire new clinics, outpatient centers, etc., this kind of justification is more valuable than ever in many different areas, including MRI, CT and mammography.

In recent years, the development of technological advancements in medical imaging equipment has slowed. Because of this, refurbished equipment with late-model technology, in many ways identical to today’s new equipment, has never been more accessible.

For those new to the idea of considering refurbished equipment, it’s important to understand that refurbished equipment differs greatly from used equipment. Refurbished equipment goes through comprehensive procedures to restore it to original equipment manufacturer (OEM) standards for performance and to like-new cosmetic status. Processes include decontamination, refinishing, parts replacement and re-calibration among others. Consider it similar to purchasing a certified pre-owned car, complete with a guarantee versus buying a car straight out of someone’s driveway. The processes and expertise involved in refurbishment are an important distinction from used equipment, which can be resold as-is, without any warranty.

Refurbished equipment is also beneficial in that it can be a proven and familiar technology, speeding staff acceptance and minimizing retraining needs. Compatibility with other existing equipment is also a possibility, offering further savings on new supplies and accessories.

The purchase of refurbished equipment helps achieve the dual goals of maximum clinical functionality and budget-friendly planning. Considering refurbished options in your capital equipment procurement strategy and partnering with an industry expert to help identify best-case scenarios for space, clinical needs, service and cost are smart moves for any healthcare facility.

To learn more, download the white paper 6 Questions to Ask Before Buying Refurbished Medical Equipment from Intalere and Block Imaging.