Why are so many HTM (aka Biomed or Clinical Engineering) departments being outsourced? There are basically two reasons. First, there are some lazy managers who fail to keep up with the latest technology. They are content to have as much as 70 percent of their medical devices serviced under an outside contract. This makes the in-house program less cost effective and makes outside takeover extremely easy.
Second, there are many excellent programs that fail to collect data to prove their value and cost savings on paper. When a proposal comes to a CFO, COO or CEO from a national ISO, it is often a matter of cold, hard dollars. If the in-house program cannot prove their value, they are subject to losing their jobs to a corporation that is much better at quantifying costs and savings to the C-Suite.
I don’t have a solution for the first problem, but there is an easy fix for the second issue – lack of documented proof of value. It all stems from your CMMS computer system and the information that is loaded into it.
The metric of the future for HTM is Cost of Service Ratio (COSR). It is a percentage that is calculated by dividing the annual cost of maintaining an asset (item of equipment) by the original purchase price of that item. It yields a percentage that is remarkably consistent across all medical devices. Most manufacturer contracts charge between 10 percent and 25 percent of the original purchase price for an annual maintenance agreement. A very mature in-house program can drive this percentage to as low as 4 percent. (Please refer to the article “Measuring the Cost of Service” in the July 2013 issue of TechNation. It can be found at www.1technation.com)
There are only two numbers needed to calculate COSR. The first is the original price paid for the individual piece of equipment. All CMMS systems have a field for this information. But most biomeds do not capture or record this information. And trying to backfill an entire inventory is a monumental task. But I have a solution. I have posted on the GMI website a list of 1,700 different items of medical equipment, along with their average price paid. You can download this spreadsheet and use it to fill in your own inventory with purchase prices. Sure, it won’t be your exact price paid, but it will be better than a bunch of zeroes.
Filling in the purchase price of every individual item of medical equipment is the first step to preparing to calculate the COSR (Cost Of Service Ratio). It is also next to impossible to research hospital purchase orders to determine the actual price paid. So, we have to estimate. Below is a tool to help you with that. I have compiled a list of over 1,700 different medical equipment descriptions, along with the average price paid by the hospitals. It comes from an inventory of 213,000 items, so the number should be pretty good. Please download it and use it to backfill your inventory price. You will then be one step closer to calculating COSR. Here is the website for the information: http://gmi3.com/blog/?p=3550
Next month I will discuss the next steps – calculating your internal labor rate and capturing repair data for all service providers both internal and external.
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