By K. Richard Douglas
Many people buy a new car with their entire focus on the cost of the car from the dealer. Others will buy a used vehicle and choose a brand simply because of a prestigious nameplate. In some cases, a new car buyer will make their purchase decision because the vehicle is high-performance.
While it may be a good idea to find the best price on a new or used vehicle, it can often be shortsighted. Just as important is the true cost of ownership. In some cases, the cost of ownership of a vehicle with a prestigious nameplate can be a shock to the buyer and is often not discovered until they see their first maintenance bill from the dealership.
That used Mercedes-Benz, BMW, Porsche or Audi may come with some unanticipated expenses.
This scenario is not limited to cars and trucks. It is applicable to swimming pools, homes and even weapons systems. With cars, it includes the cost of repairs, fuel, maintenance and insurance.
The cost of ownership always requires some homework ahead of a purchase to understand what elements can impact cost beyond the initial purchase price.
With medical equipment, an analysis by a procurement specialist or other buyer must consider the life cycle costs and support commitment of devices. This can include manpower and personnel, training and training support, maintenance planning and technical data, as just a few examples.
Cost analysis is critical to determine the entire cost of the capital purchase alongside an analysis of the maintenance and parts costs and the time devoted to maintaining the new piece of equipment.
Supportability and maintainability are key factors.
Support by Risk Profile
The knowledge of healthcare technology management (HTM) professionals and related procurement specialists allows for a 30,000-foot view when capital equipment purchases are made.
There is the conventional wisdom employed by HTM managers and other experts when considering the factors that go into a pre-procurement supportability analysis.
“First, decide your uptime expectations. Is this a CT scanner that brings your whole emergency department to a screeching halt if it’s offline, or is it a pool of infusion pumps that are necessary for clinical care but relatively interchangeable if they need inspection or maintenance? The risk profile in each example is very different: it may be worth paying for rapid on-site supplier service for the CT scanner, while you may be comfortable maintaining the infusion pumps yourself,” says Erin Sparnon, senior engineering manager with ECRI.
She says to then weigh the options available to provide the needed uptime; considering the availability of supplies, parts, training and certification if you’re looking to support the equipment in-house.
How can biomeds or procurement specialists, who have input into capital equipment procurement, determine the true life cycle costs?
“Biomeds and HTM have precious insight into the total impact of technologies, both clinical and nonclinical. Along with the standard issues of capital/consumables, implementation, service and support, also consider the resources that surround each device or system: does the clinical workflow need to change, requiring more or less staff time? And don’t forget to think through any cleaning, disinfection or replacement of accessories that happens in-between uses or patients. Do you need to invest in new cleaning methods or materials, dedicate new space to these activities or train staff on new processes?” Sparnon asks.
12 Integrated Product Support Elements
U.S. Army regulation AR 700-127 provides policies and requirements for integrated product support (IPS). In the military, the main audience for IPS are product support managers (PSM) and senior life cycle logisticians.
However, the application for the strategy could have broad support and usefulness in non-military settings. The concept can be boiled down to its fundamentals.
The Army’s implementation of performance-based life cycle product support, including performance-based logistics, is through the Army’s IPS program.
Insights into the concept and usefulness of this approach were central to the session “Analyzing Product Support Aspects Before Purchasing Medical Devices,” presented at the 2021 AAMI eXchange.
The presenter was Diego Gomez-Morales, deputy director, policies and analysis directorate, Army Medical Logistics Command (AMLC) at Fort Detrick, Maryland.
Gomez-Morales’ presentation covered the Army’s medical device procurement planning process, the foundational principles of IPS, the process of product support analysis (PSA), maintenance task analysis (MTA), repair parts lists and supply and support definitions.
The Army says that the life cycle sustainment plan (LCSP) is the “key overarching IPS program planning document” used for acquisition and it allows users to “effectively and affordably satisfy life cycle product support requirements and is required for all ACAT programs. It is the guide used throughout the product life cycle. The Army even instructs relevant stakeholders to utilize the document daily.
Gomez-Morales says that the information is beneficial because it either supports the HTM supportability issues encountered by both the sustainers and procurement individuals or provides an already existing framework to improve upon the procurement process.
“As you already know, I have been in the ‘sustainment’ business of medical equipment for a long time – over 30 years now – and have experienced a lot of challenges while I was in the military with support to the medical devices we had,” Gomez-Morales says.
“It turned out that we were not performing the proper supportability analysis to mitigate all support issues for these devices,” he says.
“Since I found this out over 15 years ago, I have been an advocate – and my passion – for the implementation of an already existing Department of Defense process to address product support issues,” Gomez-Morales says.
In his presentation, Gomez-Morales illustrates the “Two Level Maintenance/Acquisition Planning Relationships for Medical Devices.” The flowchart illustrates a multifaceted plan for evaluation of the anticipated support requirements of equipment after procurement.
“The DoD Integrated Product Support process is a holistic approach for the identification of the ‘activities’ required for a particular product. The DoD and Army use the product support analysis method to identify these activities based on 12 Integrated Product Support elements. This process is genius and very intuitive for someone in the support and sustainment business and it applies perfectly to medical devices,” Gomez-Morales says.
The formula is something that he created. In concept, it is PSA plus supportability analysis equals analysis addressing IPS.
Sustainment Costs
Gomez-Morales says that the presentation defines each of the IPS elements (i.e., supply and support, maintenance planning and management, computer resources) as the foundation for ensuring the best product support analysis before procurement of the equipment.
“The goal of the presentation was to have a quick look of the overall complexity of the process and how IPS (12 elements with an example of supply and support), PSA and supportability analysis (i.e., maintenance task analysis). Also, it was intended to show that some of these tools are available to the civilian sector,” Gomez-Morales says.
Because the Army has its own vernacular and its own set of acronyms, Gomez-Morales has also demystified the process to make it applicable to the civilian and commercial sector, and in particular, to HTM managers who could benefit by integrating it into their programs.
“Supportability analysis is something that is seldom done in the commercial sector, and it is hard to influence in the DoD. Most folks – civilian and DoD – only want to hear about the equipment procurement costs. They do not want to hear about the sustainment costs for equipment which is about 60-80 percent of the equipment/system’s acquisition/procurement costs. My point is that supportability analysis, before procurement, is an issue for both the commercial and DoD sector,” Gomez-Morales says.
He suggests, as an example, that if there are 1,000 medical maintenance shops (both in the commercial and DoD sectors), then you can expect 1,000 different approaches to how the equipment will be supported.
The procurement specialist or HTM manager is the one who needs to bring their unique expertise to the table and provide the foresight needed to consider several variables.
“The intent of the PSA and IPS concept was to formulate a framework that allows for the people buying and sustaining the equipment to realize the ‘true’ life cycle costs of a system before equipment is purchased. My experience in both the DoD and civilian sector is that the clinicians (doctors) are the main drivers for the technology they want. A clinician is very unlikely thinking about the cost to sustain the system. It is up to the HTM managers to figure out how they will support the system after the fact. This is not a very effective business practice for both the DoD, and commercial sector,” Gomez-Morales says.
He says that using the IPS elements as part of the procurement process involves every touch point of the supply chain from the folks adding the item to the supply/property management systems, maintenance planning managers, cybersecurity managers and many others involved in the sustainment of medical devices.
“Again, the key is to make an informed procurement decision by understanding what the total life cycle costs will be including equipment procurement and sustainment support – repair parts, consumables, accessories, support equipment (test equipment), training, RMF-cybersecurity, etc.” Gomez-Morales says.
12 Integrated Product Support Elements
Analysis paralysis may interfere with simple everyday decisions, but when it comes to preparing for major capital purchases, a more all-encompassing evaluation is critical.
Gomez-Morales says that the pre-procurement analysis is based on the product support analysis (SAE TA-STD 0017) to identify the specific “support” activities for the equipment in question.
“The foundation of PSA is the 12 integrated product support elements (i.e., supply support, maintenance planning and management, technical data, support equipment, training and training support, facilities and infrastructure, computer resources, etc.). As part of the maintenance task analysis, level of repair analysis (SAE AS 1390), fault tree analysis (IEC 61025), FMECA (ANSI/AIAA S-102.2.18) and reliability center maintenance (SA JA1011/JA1012) there is output that addresses the IPS elements in the form of a product support package,” he says.
He says that the final analysis (outputs) is meant to influence-recommend leadership procurement-funding-sustainment decisions.
“Having said that, we also have to influence our HTM culture to use the tools available to make them more indispensable in the procurement process,” Gomez-Morales says.
He explains that his goal is not to make the process so complex that folks would run away from it, but to decipher it into words/terminology that should be second nature to the user.
“It is important for the HTM community to understand the technology they are about to support. The IPS elements provide the framework for asking the simple questions as to how each of these elements will be supported once the item is purchased. So, it takes different disciplines to come up with a holistic product support package. It should not be only a maintainer trying to find a solution for every sustainment challenge,” Gomez-Morales says.
He suggests that those interested should search “integrated product support” to learn more. He says that in the military, the DoD has a Defense Acquisition University (DAU) which is the main source for training, acquisition tools and applications. He says that the civilian sector can still find a lot of useful information on the strategy.
The ideal model for estimating life cycle costs and support commitments in every health care setting may already exist in the practices of the U.S. Army. It is a process that has already been scrutinized and tested. The tools are there just waiting to be used.