How hospitals can drastically reduce medical equipment maintenance budgets and costs in 2009 (and evermore).

1. Surviving corporate mandates in
the recession of 2009
Patrick K. Lynch, CCE, CBET, MBA
Biomedical Support Specialist
Global Medical Imaging (GMI)

2. Casual forum.
Ask questions at any time.
Please place all phones and pages on silent.
Morning and afternoon breaks, but refill as needed.
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Restrooms are located . . .
Lunch at noon, provided by Troff Medical Services
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We should be through by 4 PM at the latest.

3. Hospital‐employed Biomeds
ISO‐employed Biomeds
Biomed‐related business‐people
All attendees are important. Please add to the
discussion.
If you see this symbol . . . .
Important topic – wake up and pay attention

4. Problems back at the hospital . . . . .
Administration cut our budget.
Administration cut our budget
I cannot train my staff.
My boss won’t let me hire staff I need.
y
How can I do the same work with less staff?
Administration cut out travel.
‐
‐
‐

5. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
W t d C t ( t ti )
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees

6. CBET
CCE
34 years in Biomed
1st Pres of NCBA
Active in certification of BMETs and Ces
Member of all Biomed Associations
Managed large in‐house, ISO and corporate Biomeds
Currently, works for GMI is sales development, who
sponsors my activities.

8. Understand the true severity of the financial crisis, as
1.
related to healthcare.
l d h l h
Understand the traditional ways Biomeds have dealt with
2.
cost‐cutting directives and why they don’t work.
g y y
Identify specific ways in my own facility to make a
3.
financial impact.
Learn a new way to view Biomed and the way we
4.
4
contribute to the bottom line.
Learn from companies present how to affect the bottom
5.
line.
li
Learn from others in the audience about things that work
6.
for them.

9. Leave here with more tools in your bag
than when you arrived this morning.
than when you arrived this morning

11. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

13. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

47. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

48. Budget
Payroll, Tech
Payroll, Mgmt
Payroll Mgmt
Parts
Contracts
Outside Service
O t id S i
Training
Subscriptions
misc

49. Budget
Payroll, Tech
Payroll, Mgmt
Parts
Contracts
Outside Service
Training
Subscriptions
misc

50. Number of Productive Hours
# of BMETs x number of hours
3 x 1240 = 3720 Productive BMET Hours
(7
(70% productivity)
p y)
Cost analysis
Salary x 1.25 (benefits)
3 x $40,000 x 1.25 = $150,000 per year
Cost Per Hour of Productive BMET
Total cost / total hours = cost per hour
T t l t / t t l h t h
$150,000 / 3,720 = $40.32 per hour
Per hour cost increases as productivity increases.
Per hour cost increases as mgmt. and sec. costs added.

51. Includes all persons not turning a screwdriver
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Supervisors
Secretaries
Parts Clerks
P t Cl k
Receptionists
All are viewed by upper management as much more
expendable than technical staff.
Must be able to justify their need very well.
j y y

52. Always needed.
Few options.
Expensive parts make a big difference.
CT Tubes
Cryogens
Ultrasound Probes and TEEs
Often‐used parts make a big difference.
PM kits
Batteries
Lead wires

53. Parts contracts can be evaluated for cost‐effectiveness.
Contracts that include labor are almost always BAD!
C h i l d l b l l BAD!
3 Components of a contract:
Certain (100%) need – PMs, PM kits.
Certain (100%) need PMs PM kits
Unknown (??) need – repairs (downside is always
inflated)
Unrelated extras –
Clinical support for users
Clinical training (for users)
Software upgrades
Greatest opportunities for cost savings
Compare biomed hourly costs to manufacturer hourly
costs.

54. Items sent out for repair
Labor called to hospital for service needs.
Used when:
Special technical knowledge is not possessed by in‐
house staff.
In‐house staff does not have time to complete all work.
Special test equipment is required.
Manufacturers are the most expensive.
M f h i
Often local shops can be cost effective.

55. Not the same as other travel in the hospital.
Technical training is necessary for Biomeds to be able
to work on the equipment as it comes out of warranty.
NOT AN OPTION!
Biomed must work hard to make administration see
that Biomed Training is not like a nurse going to a
th t Bi d T i i i t lik i t
nursing conference.

56. Travel for a nurse or resp tech means going to an
annual convention.
l
If they don’t go for a few years, they can still take care
of patients.
of patients
If Biomeds don’t go to school, they soon become
obsolete, and are forced to put things on expensive
contracts.
Training for a Biomed means acquiring new skill to
save money.
Biomed travel and training should NOT be evaluated
the same as other hospital travel and training.

57. Travel for a nurse or resp tech means going to an
gg
annual convention.
If they don’t go for a few years, they can still practice
their profession.
h i f i
If Biomeds don’t go to school, they soon become
obsolete, and are forced to put things on expensive
obsolete and are forced to put things on expensive
contracts.
Biomed travel and training should NOT be evaluated
g
the same as other hospital travel and training.

58. Travel for a nurse or resp tech means going to an
gg
annual convention.
If they don’t go for a few years, they can still practice
their profession.
h i f i
If Biomeds don’t go to school, they soon become
obsolete, and are forced to put things on expensive
obsolete and are forced to put things on expensive
contracts.
Biomed travel and training should NOT be evaluated
g O
the same as other hospital travel and training.

59. Travel for a nurse or resp tech means going to an
gg
annual convention.
If they don’t go for a few years, they can still practice
their profession.
h i f i
If Biomeds don’t go to school, they soon become
obsolete, and are forced to put things on expensive
obsolete and are forced to put things on expensive
contracts.
Biomed travel and training should NOT be evaluated
o ed t a e a d t a g s ou d O be e a uated
the same as other hospital travel and training.

60. Travel for a nurse or resp tech means going to an
gg
annual convention.
If they don’t go for a few years, they can still practice
their profession.
h i f i
If Biomeds don’t go to school, they soon become
obsolete, and are forced to put things on expensive
obsolete and are forced to put things on expensive
contracts.
Biomed travel and training should NOT be evaluated
g
the same as other hospital travel and training.

61. Technical information constantly emerging.
Management information constantly emerging.
Regulatory information constantly emerging.
Medical Equipment management strategy constantly
changing.
changing

62. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

65. Reduce your spending by 10%!

66. Reduce your spending by 10%!
What they really mean is:
y y

67. Reduce your spending by 10%!
What they really mean is:
y y
Reduce your spending b 10%!
Rd di by

68. Reduce your spending b 10%!
Rd di by
NOW!

70. No

71. No
and
Yes

72. No . . . . . .
because the pain is real.
b h i i l
And it will get worse. We haven’t seen
anything yet. We all have to tighten
anything yet We all have to tighten
our belts.

73. Yes . . . . .
Yes
. . . because the bigger goal is not to
just reduce Biomed costs but to
costs, but to
reduce HOSPITAL costs.

74. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

76. What if EVERY piece of technology in a hospital
were seen as a sponge?
Size of Sponge = value of equipment
Amount of water in the sponge = MONEY to
maintain

77. Servers
Lab MRI
CT
Copiers
Sterilizers
Anes
es
General Ultrasound
Biomedical
Equipment
Cad Access
Linear
Accelerators

78. =

79. =

88. Servers
Lab MRI
CT
Copiers
Sterilizers
Anes
es
General Ultrasound
Biomedical
Equipment
Card Access
Linear
Accelerators

91. Reduce your spending by 10%.
Biomed Response:
p
How? Where?

92. Typical Biomed Approaches to cost reduction
Reduce PMs
Cut Overtime
Reduce services to customers
Shift costs back to customer cost centers

93. What the C‐suite really wants . . . .
Find a way to reduce costs as much as possible, but the
minimum should be an amount equal to 10% of your
ii h ld b l % f
current year’s budget.

94. The key to remember:
The way for Biomed to increase value to the hospital is
to , not contract.
Biomedical Engineering specializes in wringing the
cost out of medical equipment service, while
maintaining (or increasing) the reliability, safety and
i t i i ( i i ) th li bilit f t d
accuracy for the overall good of the patient and
caregivers.
g

106. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

107. • Ultrasound Machines
MUSE system
Linear Accelerator
Sterilizer Service

108. Old State: (phase 1 – total OEM contracts)
Manufacturer contract ‐ $250,000 / year
Transition State: (got trained, use third parties, begin doing PMs)
Train BMET, wait for contract to expire
T i BMET it f t t t i
Final State: (phase 4)
In‐house service
ouse se v ce
Savings:
$180,000 per year
Added benefit – first step into Imaging Service.

109. Old State:
Manufacturer Contract ‐ $44,000 per year
(hardware, software, upgrades)
(Cost of actual service delivered, if bought at market prices
(Cost of actual service delivered if bought at market prices
was $15,000 per year.)
Transition State:
Train BMET
Final State:
Service In house
Service In‐house
Savings:
$30,000 per year less cost of software upgrades

110. Old State:
Manufacturer Contract ‐ $425,000 per year
Transition State:
Switch to ISO, contract $250,000 per year
S it h t ISO t t $
Agreed to train in‐house BMET
Final State:
In‐house service
Promotion for BMET
Savings:
Si
$300,000 per year

111. Old State:
Manufacturer Contract ‐ $125,000 plus parts
Transition State:
Biomed manages outside contract
Final State:
Biomed hires Facilites Eng, cancells contract
Savings:
Si
$75,000 per year
Hired person from engineering.

112. Best ideas from around the country:
Keep end‐of‐life equipment operational as long as
financially and technologically feasible.
Buy used equipment for spares, parts, backups.
Buy used equipment for spares parts backups

113. Best ideas from around the country:
Keep end‐of‐life equipment operational as long as
financially and technologically feasible.
Buy used equipment for spares, parts, backups.
Buy used equipment for spares parts backups
Remove unused medical devices from service, retire,
adjust staffing and costs accordingly.

114. Best ideas from around the country:
Keep end‐of‐life equipment operational as long as
financially and technologically feasible.
Buy used equipment for spares, parts, backups.
Buy used equipment for spares parts backups
Remove unused medical devices from service, retire,
adjust staffing and costs accordingly.
Purchase used, refurbished equipment to stretch capital
dollars.
.

115. Best ideas from around the country:
Keep end‐of‐life equipment operational as long as
financially and technologically feasible.
Buy used equipment for spares, parts, backups.
Buy used equipment for spares parts backups
Remove unused medical devices from service, retire,
adjust staffing and costs accordingly.
Purchase used, refurbished equipment to stretch capital
dollars.
Barter trade service with area hospitals, instead of
Barter – trade service with area hospitals instead of
duplicating training.

116. A: Instead of this, we have repeatedly shown them where
we can reduce the budgets of other departments, as
the repair costs are not in our budget.
They are really just looking for a bottom line reduction,
and once you show it to them, it’s not important which
d h it t th it’ t i t t hi h
department budget line really hits.
Karen Waninger

117. Encourage people to use their PTO. While it does not show
up any different in our actual budgets, it does reduce the
py g,
debt liability for the hospital. They have already accrued
the expenses, so if people actually use the PTO, they reduce
the balance in the accrual account.
Stretch out the calibration on test equipment, do it every 2
years instead of every year, unless you start to see drift with
specific devices. Just make sure your policies are updated
to reflect what you are doing there.
to reflect what you are doing there
See if you can sell any of your old test equipment (NOT
medical equipment) on eBay and use that money for new
tools, etc.
tools etc Make sure that your hospital has approved that
approach, though, and that everything is above board with
tracking the assets.
Karen Waninger
Director, Clinical Engineering
Community Health Network

119. The Economic Crisis
How it affects Healthcare and Hospitals
How Biomeds typically respond to financial pressures
and why these do not work.
10 Ways to reduce Costs (presentation)
A spongy approach to cost analysis
Lessons from around the country
Round Table – self help from attendees
R d T bl lf h l f d

120. Alan Koreneff – Corporate Director of Clinical
Engineering, Novant Health, Charlotte
Sonny White

121. What works for you?
What has NOT worked for you?
Are you willing to look in non‐traditional places for
expansion opportunities?
Why are you here?

122. It’ll be worse before it is better.
1.
Everybody is in the same situation.
2.
Expand your vision beyond patient care.
3.
The Biomed is the least costly way to maintain
Th Bi d i h l l i i
4.
medical equipment.
To save more, Biomed must expand.
5.
Travel and training budgets for Biomed are different
6.
than for the rest of the hospital.
Use the sponge analogy to identify your sponges.
7.
Use SVR and the parfait slide to identify fat sponges
8.
which need squeezing.
which need squeezing
NETWORK – use your friends for ideas.
9.

123. Why did you come here today?
Did you find some answers to your problems?
What is the next step?
What can the NCBA do for you?
Suggestions and comments (always welcome)
S ti d t ( l l )
Please return evaluation form.
Pl t l ti f

126. For a copy of this presentation,
f hi i
email plynch@GMI3.com
For assistance with a plan to move
safely into imaging service, contact
plynch@GMI3.com
l h@GMI3
If you would like this p
y presentation made for y
your
organization, contact plynch@GMI3.com or
patrick@plynch.us