8 Best Practices in Equipment Planning During Healthcare System Mergers

Healthcare system mergers are on the rise across the United States. There were over 100 hospital mergers announced in 2016, representing a 55% increase since 2010. As the number of mergers continues to grow, procurement managers face a unique set of challenges. In addition to staying abreast of equipment needs, they are tasked with the responsibility of controlling equipment costs and managing a larger collection of equipment vendors.  Below are eight best practices in equipment planning that can help hospitals enjoy a seamless transition to a merged health care system.

1) Schedule a capital equipment audit.

“By using medical equipment historical data and conducting an equipment audit, health facilities professionals can analyze the techniques they are using in their management programs as well as improve efficiency and compliance while decreasing costs.” – Valerie Laktash, CHFM

The first step to take following a healthcare system merger is to organize a comprehensive physical inventory. While online inventory control systems offer efficiency and valuable real-time information, there is no substitute for a physical equipment audit – especially following a merger. During an equipment audit, you should strive to achieve the following:

• Pinpoint equipment that is offsite or missing from inventory
• Make a note of equipment that is damaged or malfunctioning
• Identify needs for new equipment

2) Remove any broken or damaged equipment from inventory.

Everyday life at a healthcare facility can become so chaotic that there is sometimes a disconnect between the staff who use the equipment and the individuals who maintain or purchase the equipment. When equipment fails during a procedure, the top concern for a doctor or nurse is ensuring that patient care is not interrupted. It is not uncommon for a monitor or other problematic piece of equipment to be hurriedly placed in a closet and replaced with an unused monitor from another room. During the physical inventory, all defective equipment should be removed from the floor for evaluation and repair.

3) Identify outstanding equipment needs for each facility and prioritize them.

Conducting an equipment audit often highlights the need for new medical equipment. Because there are often multiple stakeholders who have competing equipment requests, procurement managers and CFOs must carefully examine the costs and benefits of each requested piece of equipment. This can become a challenge when the demand for a $3 million state of the art MRI machine arises. Procurement directors and CFOs often must decide whether to spend half of their equipment budget on one specialty piece of equipment or direct their resources to frequently used equipment such as patient monitors and stretchers.

4) Contact existing equipment vendors to inform them of the merger.

Sometimes healthcare system executives become so preoccupied with internal issues that they neglect to notify vendors and equipment suppliers of the news. As soon as a merger is finalized, key vendors should be notified by a managerial or executive-level official. Below are some key pieces of information to reference when contacting an equipment vendor about a merger:

• Provide the names of the hospitals or surgery centers that will be involved in the merger
• Make sure vendors are aware of their key point(s) of contact at your organization
• Outline the positive ways the merger will impact vendors (increased sales and service opportunities)

5) Bolster efficiency by standardizing equipment planning software.

Introducing a single equipment planning platform is beneficial in multiple respects. In addition to streamlining the healthcare equipment request process, capital equipment budgeting software helps procurement staff track purchases and predict future equipment needs. Equipment planning software also offers robust reporting capabilities and offers a centralized location for all equipment purchasing records.

6) Negotiate discounts with capital equipment vendors.

Mergers create exciting opportunities for procurement managers and capital equipment vendors alike. With capital medical equipment and supplies accounting for roughly 20% of an average hospital’s budget, even a modest discount can yield significant procurement savings for a healthcare system. Capital equipment suppliers can also reap the benefits of a merger. Even after agreeing to an attractive discount, vendors can potentially double or quadruple their sales when facilities merge and new hospitals begin acquiring their equipment.

7) Consider donating or selling any equipment no longer in use.

One of the best ways for merged healthcare systems to optimize their capital equipment budgets is to sell their capital equipment that is no longer in use. Professional medical equipment refurbishing companies are often seeking new sources for used medical equipment that can be professionally refurbished and sold at a reduced rate to hospitals and surgery centers across the globe. This arrangement is a win-win situation for all parties involved.

8) Engage with surgeons and physicians regarding equipment planning.

“In a mature supply chain, you need to have engagement with the physicians, because if you don’t, it’s more dictatorial and more limiting. And they feel, rightly so, that supply chain isn’t advancing their ability to deliver care. If you don’t have engagement, it’s a real struggle.” – Ed Bonetti, Vice President of Supply Chain Services, UMass Memorial Healthcare

Involving surgeons and physicians in the equipment planning process is critical to maintaining continuity of care following a merger. In addition to providing vital information regarding capital equipment needs, surgeons and physicians can offer valuable feedback on equipment functionality and reliability.

The Bottom Line

With healthcare mergers on the rise in the United States, capital equipment planning is more important than ever. Through measures such as equipment audits, software standardization, and physician engagement, equipment planners can help optimize efficiency and control costs. And by following the best practices above, procurement directors and clinical professionals can help ensure that patients continue to receive the highest level of care during and after a merger.