Over the last few years, we have seen an increase in healthcare administration challenges, including supply chain disruptions, labor shortages and burnout, and cybersecurity risks. These challenges have provided an unprecedented opportunity for innovation in the healthcare industry, where change has traditionally been slow and inconsistent. The industry’s skepticism about change is not without merit – new technologies, processes, and approaches must be carefully vetted when lives are at stake. Healthcare organizations also have limited flexibility to change because of high fixed costs. They need to identify creative but viable opportunities to cut costs and improve efficiency while maintaining a standard of care.
While significant progress has been made in advancing digital solutions in healthcare – like staffing, revenue cycle management, and care delivery – a key area is still lacking: managing capital assets. Aside from facility construction, capital assets are some of the most expensive purchases for healthcare organizations, and yet there has never been an operating system designed to manage capital in the same way health systems manage staff and patients. With technological advancements driving so many other aspects of healthcare forward, capital asset management has been left behind. Many disjointed point solutions exist, but the industry has traditionally lacked the data-driven, end-to-end capital operating system it desperately needs. Without a unified solution, there are a few common myths about capital management that many health systems are falling prey to.
Myth #1: My existing data is accurate.
Reality: In the average health system, more than 60% of their capital data is inaccurate or incomplete. Additionally, a rise in merger and acquisition activity results in different data sets and nomenclature, and construction project equipment lists are frequently disconnected from existing fleets.
Myth #2 I know how long I should keep an asset.
Reality: While the American Hospital Association has a great starting point to estimate asset life, no two organizations follow it exactly the same. Health systems also frequently do not have full visibility into various opportunities to generate additional revenue by trading in or selling assets they no longer need.
Myth #3: I know the risks associated with my asset fleet.
Reality: Because of disparate systems and point solutions, most health systems are missing key information like what cybersecurity risks exist within their fleet, how long an asset’s life can safely be stretched, and which assets need to be prioritized based on clinician input. Risk points related to cybersecurity, patient safety, and recalls are either unknown or not visible in a centralized, unbiased system.
Myth #4: I have a good grasp on the best way allocate budget dollars for capital spend.
Reality: Disparate systems are used across supply chain, finance, and biomedical engineering functions. Inconsistent capital request formats are used throughout organizations. Without accurate data, supply chain decision-makers don’t have visibility into current utilization metrics and bulk purchase opportunities.
The industry is ready for a disruption of the status quo, with a new set of tools to help providers of all sizes eliminate financial blind spots, aggregate strategic sourcing opportunities, create transparency and collaboration in the budgeting process, drive clinical and contractual standards, and enhance revenue upon disposition. There is still significant room to generate cost savings and ROI in the capital asset lifecycle, but to do this, health systems need to manage and share data differently.
2023 will, without a doubt, be the most transformative year yet for healthcare capital management. There are significant opportunities to help address some of the biggest challenges in the healthcare supply chain, including closing the communication gap between health systems and leading OEMs to provide the highest quality data about their capital products, empowering healthcare leaders to make informed decisions about asset management. The industry is undergoing a paradigm shift, and there are opportunities to integrate innovative solutions to problems health systems didn’t even know they had. Partnerships between GPOs, academia, OEMs, and tech companies can provide a way to share expertise and collaborate to overcome the biggest challenges in healthcare capital management.
Healthcare deserves quality technology that reflects the high stakes in budgeting, risk management, and patient outcomes. With mergers and acquisitions on the rise, prudent budgeting trends, and cybersecurity risks at an all-time high, it’s more important than ever for health systems to have visibility into and confidence in the accuracy of their capital asset data. The more time goes on without intervention into archaic capital asset management approaches, the more irreparable damage can be done.
We are at the beginning of an exciting shift in the healthcare technology landscape. There is so much opportunity to bring together health systems, OEMs, vendors, GPOs, and more to bring capital asset management into the future. The healthcare industry can finally become the innovative leader that other industries look to as an example, rather than the other way around.
By Taylor Jackson, Director of Marketing at HANDLE Global