Medical Equipment Planning
AHRMM SEPAC, November 15, 2011
Presentation Objective
-
Provide a High
-
Level Overview of Medical Equipment
Planning
A Collaborative Effort
Hayes, Inc.
TriMedx
Catholic Health
Panel Company Overview
-
Objective!
Hayes, Inc.
Internationally recognized health technology research and consulting company, serving hospitals,
health systems, health plans, employers, and government agencies.
Employ highly qualified and experienced clinicians, analysts, and consultants (35+).
Mission is to improve healthcare quality through the use of evidence.
TriMedx
TriMedx, a subsidiary of Ascension Health, has helped 500+ healthcare providers reduce
expenses, increase patient throughput, and drive profitability through innovative management
programs centered on medical technology assets. Delivering 99% uptime, around
-
the
-
clock
response and unbiased, total
-
cost
-
of
-
ownership equipment data, TriMedx has saved its clients
nearly $150 million to date.
Catholic Health
Catholic Health in Buffalo, NY is a non
-
profit healthcare system that provides care to Western
New Yorkers across a network of hospitals, primary care centers, imaging centers and several
other community ministries (8,200 employees, 1,200 Physicians).
\
Medical Equipment Acquisition
Strategy
Business Drivers
Clinical Outcomes
Performance
Impact of Healthcare Reform
Physician Preference
Recent Trends
–
Emerging
Technology
Interoperability
Network Security
Total Cost of Ownership
Budget Development
Equipment Functionality
Operations Issues
Regulatory Compliance Strategies
Scope of the Buy
Equipment Warranty
Software
Training
Medical Equipment Planning
Healthcare Reform Impact
CHANGE
IMPROVE QUALITY
REDUCE COSTS
Handout provided: Healthcare Reform and The Supply Chain
Business
Model
Capital Equipment
and Technology
Planning
Selection and
Procurement
Implementation
Management and
Support
End of Life
Management
•
Alignment with strategic plans
•
Evidenced Based Clinical Outcomes
•
Evidenced
-
Based Equipment
Performance Data
•
Current State/Gap Analysis
•
Efficient capital planning
•
Replacement scheduling
•
Limit the Scope of the Buy
•
All
-
inclusive ROI
•
Competitive capital sourcing
process
•
Tracking and management
•
Metrics
•
Optimizing asset utilization
•
Technology redeployment
Comprehensive Lifecycle Management
-
Total Cost of Ownership
Total
Cost of Ownership: CT Scanner
Purchase Price
-
$1.5M
Total Cost of Ownership $3,432,546
Total Cost of Ownership: Breast MRI
Purchase Price
–
$1.5M
Total Cost of Ownership
-
$3,740,457
Total Cost of Ownership: CyberKnife
Purchase Price
-
$3.2M
Total Cost of Ownership
-
$8,502,505
Handout: Understanding Total Cost of Ownership
in Capital Equipment Planning
Copyright ©
2011
Winifred S. Hayes, Inc.
Evidence
-
Based Medical
Technology Planning
Jennifer E. Van Pelt
Senior Research Analyst
Senior Hospital Consultant
Hayes, Inc.
AHRMM SEPAC,
November 15, 2011
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2011
Winifred S. Hayes, Inc.
Does This Happen In
Your Hospital?
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2011
Winifred S. Hayes, Inc.
In the “healthcare crisis” and “healthcare
reform” debates, two themes that underlie
every other issue appear to be…
QUALITY
COST
Is an expensive new medical technology
worth the cost?
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Copyright ©
2011
Winifred S. Hayes, Inc.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Total health spending
($trillion)
Projected U.S. Healthcare Costs
Rising Costs
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2011
Winifred S. Hayes, Inc.
Are
We Getting Our
M
oney’s
Worth
?
Healthcare Statistics
Country
% GDP for
Healthcare
(2008)
1
Life Expectancy
at Birth (2010
est.)
2
Infant Mortality (Per
1000 Live Births) (2010
est.)
2
Canada
10.4
81.29 yrs
4.99 deaths
France
11.2
81.09 yrs
3.31 deaths
Germany
10.5
79.41 yrs
3.95 deaths
Switzerland
10.7
80.97 yrs
4.12 deaths
U.S.
16.0
78.24 yrs
6.14 deaths
Americans spend more of their economy for healthcare
than any other developed country.
1
Source: OECD Health Data
–
Frequently Requested Data , 2010
2
Source: CIA
–
The World Factbook. , 2010
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2011
Winifred S. Hayes, Inc.
Factors Contributing to Growth in Healthcare Spending
Per Capita
Factor
%
Aging of the Population
2
Changes in Third
-
Party Payment
10
Personal Income Growth
11
–
18
Prices in the Health Care Sector
11
–
22
Administrative Costs
3
–
10
Technology
-
Related Changes in Medical Practice
38
–
62
Source: Smith, Heffler, and Freeland in CBO (2008)
Why Are Costs Rising?
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Copyright ©
2011
Winifred S. Hayes, Inc.
Evidence
-
based
clinical
decision making
combines the best available research
evidence with clinical experience and
patient values with the goal of improving
quality of
patient care
.
EBTA versus EBM
EBM
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Copyright ©
2011
Winifred S. Hayes, Inc.
Evidence
-
based
technology
decision
making considers the best available
research evidence along with other factors
(cost, local market, business plan) with the
goal of improving the
new technology
acquisition
process.
EBTA versus EBM
EBTA
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2011
Winifred S. Hayes, Inc.
Systematic Use of the Best Available
Evidence to:
•
Acquire the best available technology
•
Avoid acquiring ineffective or unsafe
technology
With the Goals of:
•
Improving
patient care
•
Better managing new technology
costs
What Is EBTA?
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Winifred S. Hayes, Inc.
Higher
Lower
STRENGTH OF
EVIDENCE
Large, multicenter RCTs
Meta
-
analysis of grouped data
Smaller, single
-
site RCTs
Prospective studies
Retrospective studies
Studies with historical controls
Case series or reports
Consensus/expert opinion
Levels of Evidence
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2011
Winifred S. Hayes, Inc.
Reality??
Costs Less
Docs Want It
—
Now
Competing Hospital Has It
Sales Rep Says It’s the
Latest Greatest
Patients Saw It on TV and Want It
(Perceived Revenue Generator)
New Technology Acquisition
Trade Journals Say “It’s A
Must Have”
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Winifred S. Hayes, Inc.
•
Definition of the Question(s)
•
Systematic Literature Search
•
Critical Appraisal of the Evidence
•
Analysis of the Body of Evidence
•
Conclusions about Safety, Efficacy,
Clinical Effectiveness
Elements of HTA
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Copyright ©
2011
Winifred S. Hayes, Inc.
New Technology Example:
256
-
Slice CT
Emergency Department Imaging
•
Marketed as:
–
Significantly faster and better image
quality
–
Improved imaging of obese patients,
pediatric patients, trauma, and
complex cardiac and neurologic cases
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Copyright ©
2011
Winifred S. Hayes, Inc.
New Technology Example:
256
-
Slice CT
Emergency Department Imaging
•
Published evidence:
–
No studies directly comparing with
64
-
slice CT
–
No studies on emergency department
imaging and patient outcomes
Is it worth the extra $1 million+?
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Winifred S. Hayes, Inc.
Robotic Surgery
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Winifred S. Hayes, Inc.
Clinical Applications
•
Robotic prostatectomy
•
Robotic hysterectomy
•
Robotic cystectomy
•
Robotic coronary artery bypass
•
graft (CABG)
•
Robotic valve repair and replacement
•
Robotic nephrectomy
•
Robotic endovascular/vascular surgery
•
Pediatric surgery (Nissen fundoplication, pyeloplasty,
patent ductus arteriosus closure)
•
Robotic thyroidectomy
•
Robotic colorectal surgery
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Winifred S. Hayes, Inc.
Robotic Surgery Issues
•
Quality of evidence an issue
—
data from limited
number of treatment centers, overlapping study
populations, small studies, lack of long
-
term
follow
-
up
•
Definitive evidence
-
based conclusions not
possible due to lack of randomized comparative
studies with laparoscopic equivalents
•
In some cases, less blood loss, fewer
complications, more precision, overcome
technical limitations of conventional surgery
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Copyright ©
2011
Winifred S. Hayes, Inc.
HTA Reveals Other
Implications
•
Longer operative times for certain procedures (e.g.,
artery harvesting)
•
Substantial training requirements for surgeons
•
High acquisition cost
, > $1 million
•
Renovation of OR suite may be required
•
Longer preprocedure set
-
up times
•
Expensive accessories, annual maintenance,
consumables
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Copyright ©
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Winifred S. Hayes, Inc.
•
From 2005 to 2008, the number of hospital
discharges for prostatectomy increased > 60%,
despite decrease in incidence of prostate cancer.
•
Number of robotic prostatectomies increased
substantially from 2005 to 2008.
•
Medicare data shows that patients diagnosed with
prostate cancer in 2005 were more likely to
undergo surgery by 2007 than patients diagnosed
from 2001 to 2004.
Barbash and Glied, NEJM, August 2010
In the U.S., Changing Clinical
Practice…
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2011
Winifred S. Hayes, Inc.
In the U.S., Changing Clinical
Practice…
•
Robotic surgery may have caused shift from nonsurgical
to surgical treatment, increased surgical case volumes,
and costs of procedure.
•
Emerging evidence suggests that, despite short
-
term
benefits, robotic surgery may not improve patient
outcomes or quality of life over the long term.
•
One study reported, “Patients who underwent robotic
prostatectomy were more likely to be regretful and
dissatisfied, possibly because of higher expectation of
an ‘innovative procedure.”
Barbash and Glied, NEJM, August 2010; Lowrance et al., Journal of Urology, April 2010; Schroek et al., European Urology, 2008
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Winifred S. Hayes, Inc.
In the U.S., if
e
vidence is
insufficient and
inconclusive
,
and costs are
high, why
a
re
r
obotic
s
urgery
s
ystems
b
eing
a
cquired
b
y
s
o
m
any
h
ospitals
?
It’s All in the Advertising. . .
28
Our Fascination with the
Technology
—
Many
physicians and patients consider robotic
surgery to be superior despite the lack of clinical
evidence.
29
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2011
Winifred S. Hayes, Inc.
Robotic Surgery Drivers
Despite current lack of strong clinical and cost rationale,
patient demand and market competitiveness are
driving adoption of this technology.
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Copyright ©
2011
Winifred S. Hayes, Inc.
Value Analysis Example
•
Literature search
—
PubMed, Medline, Embase)
–
Two nonrandomized studies, 25 patients, 34 patients
–
FDA approval via 510(k) process (substantial
equivalence)
•
First study reports outcomes with new device are similar to
other devices (not specified); second study reports similar
debris capture to 3 other devices, but no final patient
outcomes measured
•
Conclusion:
Insufficient evidence to recommend replacing
existing devices with new device.
Should we adopt a recently approved
embolic protection device instead of
currently used devices?
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2011
Winifred S. Hayes, Inc.
Product
Users
Finance
EBTA
Purchasing
Where Does EBTA Fit in
Your Hospital?
Value
Analysis
Committee
Technology
Assessment
Committee
New Technology
Committee
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Copyright ©
2011
Winifred S. Hayes, Inc.
Value Analysis
New Medical Technology Acquisition
Capital Purchases
Strategic Planning
Physician Preference Items
Whenever the impact of a technology
or procedure can be predicted by
clinical evidence.
EBTA Can Be Applied To:
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Copyright ©
2011
Winifred S. Hayes, Inc.
Integrating Evidence Analysis
Add evidence review early in your technology
evaluation process.
Apply
health technology assessment methods
depending on technology type.
Make better new technology and supply chain
decisions!
Acknowledge when evidence is lacking and why.
Catholic Health
Medical Equipment Planning
The
Reality
Total Cost of Ownership
Edward
Lanthier
, MBA, CBET
Catholic Health
Buffalo, NY
We are Buying new Equipment!
But what is it really going to cost us?
What we will consider
Is this the right technology?
What is the Purchase price?
Are there Installation costs?
What are the Service costs?
Are there IT considerations?
Are there Consumables/Disposables?
What we will consider?
(
con’t
)
Reagent Rentals
What about Fee per Case?
Are there Disposal costs?
Will it be Utilized?
Sale of Assets
Is it the Right Technology?
The Evidence often can not support the
Claims
“Billboard” items are often more
motivated by Marketing than Clinical
need.
Will you get reimbursement using this
technology?
What is the Purchase Price?
Does anyone Pay List anymore?
To GPO or not to GPO?
Are there any promotional discounts?
Can I use a trade in for additional
discounts?
Installation Costs
Get the Utility Requirements and
Installation package ASAP?
Power, Water, Cooling, Drains, Medical
Gases, UPS, Conditioned Power.
Construction Costs? Environmental
concerns, Generic vs Specific, Rigging?
Service Costs
(BIG Money in Service)
Are you Required to Sign a Point of Sale
Service Agreement?
Are Service Manuals and Service Training
Available? Why not Free? At what Cost?
Is the Service Software Available? If so at
what cost?
Are Parts Proprietary?
Service Options
Manufacturer Point of Sale Agreements
10% to 20% of List Purchase price per year
Third Party Service Contracts
6% to 8% of Inventory Value (but what basis
–
List)
In
-
House
4% to 6% of Inventory Value (what basis
–
List)
Hybrids
Service Options
Service Contracts
–
Beware the details
98% uptime
–
A very low bar
Coverage Hours
Power Quality
What exactly is “Abuse”
“Genuine Parts” or “Accepted Vendors”
IT Considerations
Does this need to be connected to the
Network?
Wired/Wireless Add?/Upgrade?
Software Licenses? VPN Access for Vendor?
Will it work with the EMR?
Or does it need middleware?
Can you buy “Best in Class”
Or will you need to buy “End to End Solution”
Consumables/Disposables
Disposable Contracts
Proprietary Technology
Limiting Technology
Lack of Substitutes
Fee per Case
Option for fast changing costly
technology
MRI Trailers
Specialty Lasers
Common with Endoscopy
Reagent Rentals
This is the mainstay of Lab Analyzers
Can include service
Based on Estimated workload
Disposal Costs
Can’t just throw it away
PC’s, Computer Monitors, Electronics
X
-
Ray rooms
–
Lead, Oils, X
-
Ray tubes
Batteries
Mercury Thermometers,
Syphmomanometers
Utilization
Leading Edge
vs
Bleeding Edge
Tried and True
vs
End of Life
More than is needed
Does a Community Hospital need a 64 slice CT?
May work perfectly
–
But no longer useful
Single slice CT
Sale of Assets
Can the Retired Equipment be Sold?
Harvested for Parts?
Donated for Mission?
Sold to Recyclers for Scrap Value?
Independent Information
ECRI Institute
–
Membership
MD
Buyline
–
Subscription
Hayes, Inc
TriMedx Consulting
Thank you
Future
Questions:
carol.sysak@trimedx.com
jvanpelt@hayesinc.com
elanthier@chsbuffalo.org
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