Tracking Hospital Equipment: an Emerging Imperative for Healthcare CFOs
Apr 13, 2021
Already challenged by long-term financial pressures, hospitals and healthcare providers have been battered by the COVID-19 pandemic. During surges, many hospitals had to restrict or shut down non-essential services and revenue-generating procedures. The pandemic has also driven longer hospital stays, declining emergency room visits and personnel shortages that have required a reliance on costly contingency staffing solutions. All of these factors have combined to increase operating costs and shrink margins.
As they chart their post-pandemic recovery strategies, top priorities for healthcare CFOs include preparing for consolidations, acquisitions and mergers, as well as seeking new sources of capital funding, primarily through private equity channels. All of these activities involve due diligence and a granular level of third-party scrutiny. In this environment, a high degree of operational and fiscal discipline is critical. Put simply, a CFO whose hospital is either pursuing an acquisition or is itself an acquisition target needs to have his or her ducks lined up in a row and standing at attention.
Tracking Hospital Equipment
For CFOs pressured to demonstrate a fiscally tight ship, improving oversight of mobile clinical assets and hospital equipment can be a good starting point. Today, inadequate management of assets costs hospitals millions of dollars a year, and results in annual shrinkage loss of between 15 percent to 35 percent of total asset costs. Hospitals lack the tools and processes to monitor or locate equipment such as portable MRI and X-ray machines and respirators. Doctors and nurses waste precious time simply looking for equipment, resulting in delayed treatment and compromised quality of care for patients. Lost assets and theft are major problems. A single hospital, for example, recently reported $11 million in missing items over a four-year period, and instances abound of pilfered equipment showing up on eBay.
Lack of asset management also drives costs by draining efficiency and productivity. Hospitals that can’t locate and monitor assets have to buy and rent additional equipment, resulting in bloated inventories and higher maintenance costs. Nurses who spend hours a day simply looking for something, meanwhile, often resort to hoarding critical devices for quick access when needed.
Intelligent Asset Management Solutions
Emerging technology solutions that leverage Artificial Intelligence (AI), data analytics, smart sensors and other capabilities can address the hospital asset management challenge. The concept is straightforward: X-ray machines, respirators and other pieces of equipment are tagged so that the asset can be identified and tracked. Video cameras and geo-fences are deployed throughout the hospital or healthcare facility to monitor the location of assets – whether they’re tucked away in a storeroom or being wheeled down a hallway. Smart video analytics capabilities identify the asset type and document its utilization and maintenance history. If a doctor or nurse urgently needs a respirator, the solution pinpoints the location of the nearest one. And when an asset crosses a geo-fence of a proscribed boundary (say, the perimeter of the emergency room), the system sends an alert to hospital staff to indicate that the asset is being moved outside of its authorized location.
The most significant and obvious benefit of these smart solutions is improved quality of care, as hospital staff are able to quickly identify and access critical equipment needed by patients. From an operational standpoint, cost savings and productivity gains accrue from a number of factors, including optimized inventory management and eliminating the need to carry more equipment than the hospital can deploy, even at full capacity. Preventing theft through real-time alerts when assets move outside authorized zones is another critical benefit. Improved asset utilization and maintenance, meanwhile, translates into better performance and longer asset lifecycles.
What to Look For
Cost is obviously a critical factor for hospitals exploring options for asset management solutions. As such, finding an approach that integrates easily with existing video infrastructure is essential to minimize disruption from the installation of new equipment. More specifically, the approach used to track equipment needs to be considered. While some solutions rely on expensive RFID tags, others employ QR codes that are easier to deploy and much less expensive. From a regulatory and security standpoint, solutions should operate independently of hospital information systems to avoid regulatory compliance and security risks.
As we take steps to move beyond the COVID-19 pandemic, hospital and healthcare management teams face a wide range of daunting challenges. By enhancing asset management capabilities, CFOs can drive significant improvements in operations, drive cost savings and – most importantly – focus on the strategic imperative of enhancing quality of care for patients.
Contact us for more information on hospital asset management solutions.