ECRI Blog

Use a Predictive Replacement Plan to Create a Better Capital Replacement Process—and Include these 6 Questions

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We all know the adage, the squeaky wheel gets the oil. It can even apply to your hospital’s capital budget planning exercise.

Capital requests include both replacement items for existing equipment and new or additional purchases, and the process tends to move quickly. Unfortunately, the loudest voices usually get the bulk of the available capital dollars, and smaller departments often are left out.

A Predictive Replacement Plan, or PRP, can streamline this process and provide objective recommendations regarding the replacement of capital equipment in a systemic manner.

A PRP is a deep dive into the capital medical inventory of a health care institution which is then used to develop and coordinate an unbiased 5 or 10-year replacement schedule, based on multiple objective factors, including organizational goals and patient needs. It is not based solely on the age of the equipment or the subjective desire or influence of a department director or physician. A PRP is based on multiple objective factors including device recall data, OEM support, part availability from OEM and aftermarket sources, changing technologies, device utilization, and clinical needs of the clinician.

In addition to the factors noted above, ECRI uses the following to develop our replacement schedule:

  1. ORGANIZATION GOALS: Based on interviews with key stakeholders such as the COO, CNO, CIO, CFO, and others, our recommendations take it to account expanding or contracting service lines and programs, additional physical space allocations, and budget expectations.
  2. PATIENT NEEDS: We determine if the current equipment meets the current and future needs of patients. A primary focus is a determination of whether the equipment is safe for both the patient and clinician. In addition, we search the extensive ECRI databases to determine recall status and determine other possibly negative history using MAUDE (Manufacturer and User Facility Device Experience).
  3. CYBERSECURITY REQUIREMENTS: The cybersecurity of connected medical devices is a significant concern in today’s environment. It is not uncommon to find equipment purchased only a few years ago that does not meet many institutions' cybersecurity requirements. ECRI works closely with your IT team to identify equipment that needs to be evaluated for replacement due to outdated operating systems and other inherent risks.
  4. EHR INTEGRATION: The ability to wirelessly connect patient devices to the hospital’s EHR is a high priority today. Many devices, including vital signs monitors, portable imaging equipment, and physiologic monitoring devices are all capable of securely sending patient data to the EHR. Wireless integration provides an efficient means of quickly getting patient studies into the hands of decision making clinicians.   After speaking with your IT and clinical leadership, ECRI can prioritize replacing equipment that does not have wireless capabilities.
  5. EQUIPMENT MAINTENANCE HISTORY: During our meetings with clinical engineering and clinical department leaders, we determine if there are any service issues with a particular piece of equipment. Based on this information, we may elect to accelerate the replacement plan.
  6. AGE OF EQUIPMENT: Each piece of capital equipment is analyzed and assigned an UMDNS (Universal Medical Device Nomenclature System) number that allows us to determine the average useful life based on our proprietary biomedical benchmarking data.   This number is adjusted according to actual device usage.

After reviewing the information outlined above and other key indicators, a suggested replacement year is assigned to each item. Then, using the ECRI databases, current replacement prices are assigned. These prices are updated regularly and based on actual quotes member institutions receive from vendors for purchase requests.

Comprehensive PowerPoint, Excel file and pivot tables are provided to the client and used to develop plans. The Excel file and pivot table can easily be modified by the client to fine-tune results to meet the client’s needs.

With fewer capital dollars available each year, the need for this type of spending plan is crucial in today’s environment. PRPs are essential after mergers and acquisitions as there are usually multiple vendors, models, and manufacturers of similar devices. While many institutions only look at the high-tech, showy items found in the surgical suites, cardiology, and imaging, hospitals also contain thousands of items such as beds, infusion pumps, and wheelchairs, all utilized daily for patient care. Although such devices are not glamorous, they represent millions of dollars of equipment, and their eventual replacement must be planned.

Additionally, many hospitals tend to overbuy technology by purchasing equipment with features they clinically do not need. Our PRP’s are reviewed by clinicians with expertise in nursing, surgical services, cardiology, respiratory, laboratory, and imaging to help ensure that your facility budgets for the appropriate level of current and future technology.  

Many hospitals have an inaccurate biomedical inventory. Critical to the PRP is an accurate biomedical inventory. ECRI can also perform an inventory for your hospital as an add-on service to ensure an accurate inventory is utilized for your PRP.

ECRI can potentially save your institution millions over a typical replacement cycle by prioritizing your capital purchases with objective data and grouping purchases into logical groups so that you may obtain the best value for the dollar.

Want to learn more about PRP?  Use this link to email Marc Schlessinger, MBA, FACHE - ECRI's Senior Associate, Accident and Forensic Investigation.  

Topics: Supply Chain

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