Strategic Health
Technology
Incorporation
Binseng Wang, ScD, CCE, fAIMBE, fACCE
November 8, 2012
¡Gracias por tu invitación!
• It is an honor for me to be here to exchange ideas
and experience with you.
• It would be presumptuous of me to teach you
anything about technology incorporation because I
know you have being doing it for almost a decade
(and confirmed by the Discussion Panel on
Tuesday).
• I hope to incorporate your experience in the next
revision of my book on this subject.
• I also want to apologize for my inability to speak
Spanish correctly.
2
MOTIVATION
• According to the World Health Organization - WHO*
Up to three quarters of these [medical] devices do not function in their new
settings and remain unused. Factors contributing to this are: lack of needs
assessment, appropriate design, robust infrastructure, spare parts when devices
break down, consumables, and a lack of information for procurement and
maintenance, as well as trained health-care staff.
Now that Mexico is providing universal health coverage for all (Seguro
Popular), how will it manage technology in a safe, cost effective manner?
COUNTRY
Europe
USA
Mexico
(estimated)
THE/Capita (€) MTE/Capita (€)
2,173
145
5,098
330
1,300
117
*WHO, Medical devices: managing the Mismatch, Geneva 2010
THE = total healthcare expenditure
MTE = medical technology expenditure
3
MTE/THE (%)
MTE (€ billion)
6.66%
72.57
6.48%
97.96
9.00%
13.45
CONTENTS
• INTRODUCTION
• CONCEPTUAL FRAMEWORK
• STRATEGIC INCORPORATION PROCESS
– Strategic Planning
– Strategic Acquisition
• OUTCOME EVALUATION
• DISCUSSION
– Misconceptions
– Challenges
• CONCLUSIONS
4
Reference
• Binseng Wang
Strategic Health Technology
Incorporation,
Morgan and Claypool Publishers,
2009
• Binseng Wang
Medical Equipment Maintenance:
Management and Oversight,
Morgan and Claypool Publishers,
2012
5
Other Publications
• Wang B, Fedele J, Pridgen B, Rui T, Barnett L, Granade
C, Helfrich R, Stephenson B, Lesueur D, Huffman T,
Wakefield JR, Hertzler LW & Poplin B. Evidence-Based
Maintenance: I - Measuring maintenance effectiveness
with failure codes, J Clin Eng, July-Sept 2010, 35:132144.
• Wang et al. Evidence-Based Maintenance: II - Comparing
maintenance strategies using failure codes, J. Clin. Eng.,
Oct-Dec 2010, 35:223-230
• Wang et al. Evidence-Based Maintenance: III - Enhancing
patient safety using failure code analysis, J. Clin. Eng.,
Apr-June 2011, 36:72-84
• Wang et al. Evidence-Based Maintenance: IV –
Comparing maintenance procedures using failure codes,
in preparation
6
INTRODUCTION
Political
Leaders
Health Leaders
Patients
Vendors
Competitors
7
Health Technology Costs
• Equipment costs (depreciation, maintenance, etc.) is actually
the lowest of all health technologies
Mean Per Discharge Cost
(%Total Hosp per Discharge Cost)
15%
10%
5%
0%
Drugs
Implants
• Wang et al., Financial Impact of Medical Technology, IEEE Eng Med Biol
magazine, 27(4):80-85, Jul/Aug 2008.
• Maeda et al., What Hospital Inpatient Services Contributed the Most to
the 2001-2006 Growth in the Cost per Case? Health Serv Res, 47:1814– 8
1835, 2012
Other Supplies
Clin Eng
Strategic Health Technology Incorporation
Global
Mission
& Goals
Patients’
Needs
Strategic Health
Technology
Incorporation
Process
Market
Pressure
9
Technology
Incorporation
Plan
CONCEPTUAL FRAMEWORK
• Health technology is nothing but a tool. It has little intrinsic
value but can be invaluable in providing high-quality care in a
cost-effective way if used by the right person(s) at the right time
and in the right manner.
Health Technology
Needs +
Benefits
Impacts
• patients
• users
• infrastructure
• costs
• clinical
• operational
• financial
10
Technology Lifecycle from Different Perspectives
clinical trials early adoption
possible loss
mass adoption
high revenue
Regulatory approval
products produced
USER’S PERSPECTIVE
obsolescence
low revenue
time (years)
PRODUCER’S PERSPECTIVE
R&D
investment
Marketing & Distribution
high profit
medium profit
11
low profit
Health Policy Cycle
Evaluation
ETHICS
Problem Definition
POLITICS
Implementation
Diagnosis
Political Decision
Policy Development
Adapted from Hsiao et al., Getting Health Reform Right,
Harvard Univ./World Bank Inst., 2000
12
Technology Management Lifecycle
Health Policy
(Mission & Vision)
Strategic
Planning
Technology Assessment
Regulations & Standards
Market Competition
Financial Constraints
Epidemiological Data
feedback
Installation/Acceptance
Maintenance &
Management
Manufacturers
& Distributors
Service
Suppliers
Acquisition
Clinical Use
Architects
Information
Technology
Utilization Standards
Quality Improvement
& Risk Management
Retirement
13
Facilities
Management
Material
Management
Total Cost of Ownership (TCO)
Initial Investment
- Equipment price
- Accessories
- Shipping, insurance
& customs
- Installation
< 20% of Total Cost of
Ownership (TCO)
Invisible Costs
- Operations
- Maintenance
- Administrative
- User learning
> 80% of TCO
14
CONTENTS
• INTRODUCTION
• CONCEPTUAL FRAMEWORK
• STRATEGIC INCORPORATION PROCESS
– Strategic Planning
– Strategic Acquisition
• OUTCOME EVALUATION
• DISCUSSION
– Misconceptions
– Challenges
• CONCLUSIONS
15
STRATEGIC INCORPORATION PROCESS
Technology Planning
Technology
Audit
Technology
Evaluation
Technology
Plan
Evaluation
Consolidation
Technology Acquisition
Technology Management
Procurement
Product
Selection
Installation
Acceptance
Alternatives to
Purchasing
16
Resources for Technology Incorporation
Organization
Board or CEO
Chief
Medical
Officer
Chief
Nursing
Officer
Chief
Finance
Officer
Chief
Operations
Officer
Clinical
Engineering
Health Policy
(mission, vision,
strategies, etc.
Technology Assessment
Regulations & Standards
Market Competition
Financial Constraints
Epidemiological Data
Technology
Incorporation
Committee
Admin
Support
Task
Force 1
Technical
Support
Task
Force 2
Facilities
Mgmt
Task
Force 3
Information
Technology
17
Architects
Manufacturers
Other Suppliers
Material
Mgmt
Technology Planning
• Technology Audit
Technology Planning
Technology
Audit
– Inventory
– Condition
– Distribution
Technology
Evaluation
• Technology Evaluation
–
–
–
–
Need assessment
Impact assessment
Costs assessment
Benefits assessment
• Evaluation Consolidation
• Technology Plan
18
Evaluation
Consolidation
Technology
Plan
Strategic Considerations
• Included in the Benefits Assessment as “indirect”
benefits
• Examples:
– Maternal-child care emphasis => OBGY & neonatal
technologies
– Disease prevention => cold chain for vaccine storage &
distribution
– Surgical revenue => improvement in diagnostic technologies
– Market competitiveness => surgical robots
• In other words, “strategic” means to look beyond
immediate needs and consider broader and longer
vision
19
Sample Evaluation Summary
Clinical
Financial
Indirect
-2.0
-1.5
-1.5
-1.0
-3.0
-1.0
-2.5
-1.0
-1.5
-4.0
-2.0
0.0
Users
-1.5
2.0
-3.0
-1.0
-1.5
1.0
-1.0
2.0
-1.0
-3.0
-2.0
0.0
Recurrent
0.0
0.0
0.0
-0.5
-2.0
-1.0
-1.0
0.0
0.0
-4.0
0.0
-1.0
COSTS EVAUATION BENEFITS EVALUATION TOTAL INVESTMENT CUMULATIVE
SCORE COST (US$) COST (US$)
Investment
Maintenance
3.5
3.0
3.0
4.5
2.5
2.5
3.0
2.5
1.5
2.0
-2.0
-1.0
Users
1 Video-endoscopy for lower GI
2 YAG surgical laser
3 Cardiac ultrasound system
4 Endoscope washer and disinfection
5 Automated chemistry analyzer
6 Surgical light
7 intra-aortic balloon pump
8 250 general purpose infusion pumps
9 Video-endoscopy for upper GI
10 Second CT scanner (64 slice)
11 Phaco-emulsifier for eye surgery
12 Surgical table
NEED IMPACT EVALUATION
EVALUA
TION
Infrastructure
ITEM EQUIPMENT BEING EVALUATED
-1.0
-2.5
-3.0
-1.0
-3.0
-2.0
-2.0
-3.5
-1.0
-5.0
-1.0
-2.0
-1.0
-2.0
-1.5
-2.0
-3.0
0.0
-2.0
-2.0
-1.0
-3.5
-1.0
0.0
-2.0
-2.0
-2.0
-2.0
-2.0
0.0
-1.0
-2.0
-2.0
-3.0
-3.0
0.0
3.0
2.0
3.0
2.0
5.0
2.0
3.0
3.0
1.0
4.0
2.0
1.0
5.0
4.0
2.0
2.0
3.0
1.0
1.5
1.0
1.0
2.0
2.0
1.0
3.0
3.0
4.0
1.0
2.0
0.0
1.0
0.0
2.0
5.0
3.0
0.0
The 2nd CT could be a strategic initiative but
also could be something that will not
provide good return on investment (ROI)
20
1.7
1.4
1.1
1.1
0.9
0.7
0.7
0.6
0.4
0.4
-0.1
-0.1
$20,000
$65,000
$60,000
$12,000
$250,000
$25,000
$50,000
$750,000
$20,000
$1,000,000
$55,000
$35,000
$20,000
$85,000
$145,000
$157,000
$407,000
$432,000
$482,000
$1,232,000
$1,252,000
$2,252,000
$2,307,000
$2,342,000
STRATEGIC TECHNOLOGY ACQUISITION
• Product Selection
–
–
–
–
Technology Acquisition
Technical considerations
Regulatory considerations
Financial considerations
Supplier considerations
Procurement
Product
Selection
Alternatives to
Purchasing
• Procurement
– Isolated Purchasing
– Group Purchasing
–
–
–
–
–
Lease
Rental (short term lease)
Consumable-purchase agreement
Revenue-sharing agreement
Donation
21
possible loss
Regulatory approval
• Alternatives to Purchasing
products produced
USER’S PERSPECTIVE
clinical trials early adoption
mass adoption
high revenue
obsolescence
low revenue
Product B
Product A
time (years)
CONTENTS
• INTRODUCTION
• CONCEPTUAL FRAMEWORK
• STRATEGIC INCORPORATION PROCESS
– Strategic Planning
– Strategic Acquisition
• OUTCOME EVALUATION
• DISCUSSION
– Misconceptions
– Challenges
• CONCLUSIONS
22
OUTCOME EVALUATION
• For health policy
– Population health status
– Population satisfaction
– Financial risk protection
FINANCING
PROVIDER
PAYMENT
MECHANISMS
ORGANIZATION
REGULATION
INTERMEDIATE OUTCOMES
CHANGING
INDIVIDUAL
BEHAVIOR
• Access
• Quality
• Equity
• Efficiency
• Health Status
• Satisfaction
• Financial Risk Protection
FINAL OUTCOMES
Adapted from Hsiao et al., Getting Health Reform Right, Harvard Univ./World Bank Inst., 2000
23
OUTCOME EVALUATION
(Evidence-Based Technology Incorporation)
• For health technology
– Technology “health status”
• % of technology in use
• Global failure rate for equipment
• Uptime for mission critical equipment
• For health policy
– Population health status
– Population satisfaction
– Financial risk protection
– Technology impact
• Mortality & morbidity reductions
• Length of stay reductions
• Patient incident reductions
– Clinical user satisfaction
– Financial impact
• Reduction of unnecessary replacements & new capital investments
• Reduction of maintenance costs
24
Medical Equipment Maintenance & Mgmt in USA
100,000
Major teaching
Minor teaching
Minor teaching
Non-teaching
Unknown
$10,000
Total CE expense ($k)
• Maintenance Costs
(efficiency)
• Reliability
(effectiveness)
Major teaching
$100,000
Questionable
1% line
$1,000
$100
r = .85
p < .0000001
Non-teaching
Total # repair WOs
Unknown
$10
10,000
Questionable
$10
1,000
r = .80
p < .0001
100
100
$100
$1,000
Total operating expenses ($M)
0.75 line
1,000
10,000
#Capital devices maintained
100,000
25
25
$10,000
Technology Must Be Well Managed After
Incorporation
Health Policy
(Mission & Vision)
Strategic
Planning
Technology Assessment
Regulations & Standards
Market Competition
Financial Constraints
Epidemiological Data
feedback
Installation/Acceptance
Maintenance &
Management
Manufacturers
& Distributors
Service
Suppliers
Acquisition
Clinical Use
Architects
Information
Technology
Utilization Standards
Quality Improvement
& Risk Management
Retirement
26
Facilities
Management
Material
Management
Evidence-Based Maintenance - EBM
A continual improvement process that analyzes the effectiveness of
maintenance resources deployed in comparison to outcomes achieved
previously or elsewhere and makes necessary adjustments to
maintenance planning and implementation.
Fishing = Process
Catching = Outcome
27
EBM Strategy & Frequency Comparison
100%
Estimated Annual Failure Probability (AFP)
Pulse Oximeter
F12
R/R
Samp
(#units: F12 = 522 ,R/R = 351, Samp = 251)
80%
10%
60%
5%
40%
0%
20%
SIF
HF
PF
PPF
SIF
HF
PF
PPF
0%
No Fail UPF
F12 = annual inspection
R/R = repair or replace
Samp = statistical sampling
ACC
BATT
USE
28
EF
NET
EBM Procedure Comparison
Multi-parameter Patient Monitor
(#units: OEM = 338, Hospital = 920)
Estimated Annual Failure Probability (AFP)
100%
80%
60%
40%
OEM
Hospital
20%
0%
No Fail
UPF
ACC
BATT
USE
OEM = manufacturer recommended procedure
Hospital = hospital developed procedure
29
EF
NET
SIF
HF
PF
PPF
EBM Cause-Code Grouping Analyses Results
Battery-Powered Mon/Pace/Defibrillator
Vital Signs Monitors
Direct
2%
Direct
2%
No Failure
35%
Indirect
28%
Indirect
47%
No Failure
61%
Future
9%
Future
16%
Single-Channel Infusion Pumps
Pulse Oximeters
Direct
3%
Direct
1%
No Failure
17%
Indirect
22%
Future
6%
Indirect
56%
No Failure
71%
No failure = no problem found in SM or repair
Future = unpreventable failure
Indirect = use, peripheral, evident failure
Direct = hidden, preventable, predictable, service-induced
30
Future
24%
DISCUSSION: Misconceptions1
• Equipment life expectancy (aka “lifetime” or “usable life”)
– Replace equipment before “end of life expectancy?”
– How is reliability affected by life expectancy?
– Besides the average life expectancy, shouldn’t you look at
the standard deviations and individual cases?
100%
Estimated Reliability
80%
binary
linear
exponential
60%
40%
20%
0%
0
5
10
years after installation
31
15
DISCUSSION: Misconceptions2
• “End of Life” notices from manufacturers
Should stop using equipment?
Replace equipment as soon as possible?
Ignore the notice?
Evaluate “return on investment” for continual support and, if
justified, include in the Strategic Equipment Planning?
END OF LIFE
Regulatory
approval
products produced
–
–
–
–
time (years)
PRODUCER’S PERSPECTIVE
R&D
investment
Marketing & Distribution
high profit medium profit low profit
32
See, e.g., M.N. Skoufalos, Numbered DaysExamining the true meaning of medical
equipment ‘End of Life,’ Medical Dealer, Oct
2012, pp. 57-60.
DISCUSSION: Misconceptions3
• “Maintenance Expenditure Limit” (MEL)
US Army Tech Bulletin Med 7 states repairs shall NOT be conducted if
the cost of repair exceeds the replacement cost multiplied by the
percent of useful life remaining (limited between 10% and 65% for
equipment that exceeded its life expectancy and has not exceeded
80%, respectively).
MEL (% of Replacement Cost)
70
60
While repairs should NOT be
conducted at any cost, it should
also NOT be constrained rigidly to
replacement cost, as capital
budget is often separate from
operating budget.
50
40
30
20
10
0
0%
20%
40%
60%
80%
100%
% Useful Like Remaining
33
DISCUSSION: Misconceptions4
• Appropriate Technology (Equipment) was characterized by the
Office of Technology Assessment (OTA) as:
– A technology may be considered appropriate when its development
and use:
1) are in reaction to or in anticipation of defined goals relating to problems or
opportunities in the disability area,
2) are compatible with resource constraints and occur in an efficient manner,
and
3) result in desirable outcomes with acceptable negative consequences or
risks to parties at interest.
– “Appropriate technology” or “appropriate application of technology”
does not require that a technology be simple or that it be inexpensive,
only that it be suitable for the intended effects and that it take into
account any constraints, such as the resources available.
– The most appropriate technology in a given situation is one that
provides the greatest ratio of desirable outcomes to negative effects
and resources consumed, providing that outcomes and consequences
have been defined and are of sufficient value as judged by appropriate
parties at interest.
OTA, Technology and Handicapped People, May 1982
34
DISCUSSION: Misconceptions5
• Examples of Appropriate Technology that can be considered
strategic in incorporation:
–
–
–
–
Solar-powered refrigerators for vaccination campaigns
Cellular telephones for rural healthcare
Telemedicine for remote areas and prisons
Water treatment systems for disaster relief (Mexico)
• Better even than appropriate technology is technology
(knowledge) transfer
Give a man a fish and you feed
him for a day.
35
Teach him to fish and you feed him
for life.
DISCUSSION: Challenges
• Many challenges (opportunities)
– Lack of accurate, reliable information (comparative
performance, reliability, support costs, purchase costs, etc.)
– Lack of trained purchasing and technical personnel
– Many rules, regulations, and restrictions
– Inflexible finance restrictions (can only buy equipment but
not parts, only products made in certain countries, etc.)
– Many others…
• However, all these are fairly easy to resolve...
36
DISCUSSION: Challenges2
• The real challenges (i.e., the root causes) are more
difficult
– Lack of awareness among decision makers
– Emotional involvement:
• Power struggle
• Status symbol
– Greed and short-sightedness of
some lenders, donation
organizations, manufacturers
and suppliers
• Hope you have other solutions
to share with me
37
CONCLUSIONS
• Incorporation is not difficult:
– Analyze carefully the need, impacts, costs, risks and benefits of
each technology incorporation
– Assess alternative technologies
– Compare competitive products available on the market in terms
of quality, specifications, and total cost of ownership
– Use a multidisciplinary team to manage the procurement
process to ensure all aspects are covered, as well as
transparency
– Analyze possible alternatives to acquisition
• But you need to be willing and able to address the
challenges
38
CONCLUSIONS2
• Technology is evolving extremely fast:
–
–
–
–
–
Electronic health records
Telemedicine
Telehomecare
Mobile health
Tissue engineering, nanotechnology,
biomaterials, etc.
– Synthetic biology
– Organ re-growth and replacement
Hardware &
software
Wetware
• The sooner you start managing technology, the
easier will be to face the on slaughter of new
technologies
But the good news is that you may have >100 years of work time as
your life expectancy will be >150 years soon…
39
THANK YOU! ¡GRACIAS!
• Please contact me if you have any questions or
suggestions
– Binseng Wang, ScD, CCE, fAIMBE, fACCE
• Vice President, Quality & Regulatory Compliance
• ARAMARK Healthcare Technologies
(www.aramarkheatlhcaretechnologies.com)
• Telephone: 704-948-5729
• Email: wang-binseng@aramark.com
– Member of ACCE’s International
Committee
40