After more than 20 years of trying to form alliances and nurture trusting, win-win relationships with manufacturers and vendors, I’m starting to get cynical. We all know that we wouldn’t have jobs if technology companies didn’t develop, design, build, and sell medical equipment. But don’t they make enough money on the initial sale to keep the company going? Why do so many manufacturers do everything in their power to keep sucking money out of the hospital forever? I’m speaking of a relative minority of companies. For the sake of avoiding a lawsuit, I won’t mention any of the worst offenders here. We all know who they are. Curiously, the most uncooperative companies seem to be the most financially successful. Everything boils down to money—it’s the common denominator about which almost all things in life can be measured and compared. In a company, at the corporate level, it’s about profit and loss, market share, and margins. At the regional level, it’s about meeting sales projections. Begin thinking like a company and you’re halfway home. If you control (or at least strongly influence) the money that your organization (hospital or healthcare system) gives to a company, you control the company and how they act. If you have no effect on their money, you don’t exist. It’s as simple as that. A hospital can affect a company’s money in three distinct areas: 1) when it is purchasing new equipment, 2) when it is deciding support options for the equipment, and 3) when it is looking at the purchase of consumables for the equipment. Are you involved in all three of these areas? Are you a major player in all of these areas? You should be a major player in all three areas. As biomedical equipment technicians (BMETs) or healthcare technology management (HTM) professionals, we haven’t taken advantage of our growing influence. Let me share with you several ways in which I have found success in either managing uncooperative companies or avoiding dealing with them altogether. • Send your money to a friend, not an enemy. Don’t give your business to companies that have a history of poor performance or support. If they won’t cooperate with you or your hospital, that uncooperative attitude might offset the advantages of otherwise superior equipment. To influence purchases, you must have an active, ongoing relationship with your departments. If you are seen as the technical guru—the problem solver—then you’ll usually know when a purchase is being contemplated. • Build a legal framework to support your needs. Build in some really strict terms and conditions for new equipment purchases. The goal here is to withhold a significant portion of their money (more is better) until you receive everything you OBSERVATIONS AND INSIGHTS

Everybody believes that group purchasing organizations (GPOs) are the saviors of healthcare. Every hospital I know of brags about getting “a better deal than anybody else in the country” on their equipment purchases. Prices paid hover around 60% of the list price. Whoop dee doo! I pay in that same range when I go out to purchase a new car. Have you seen the ads on TV, promising a 15,000% reduction on a $35,000 vehicle? List prices don’t mean anything anymore. They are created artificially high so that everybody thinks that they are negotiating for a great deal. Everybody wants to think that they beat up the big company and walked out a winner. GPOs came along to offer group-buying power to hospitals in ways that they could never achieve individually. They can bundle purchases. Maybe 10 hospitals are going to buy new computed tomography scanners. They can bid all 10 together and make their choice in concert, hopefully receiving a better price than each hospital can individually. And the GPO can be the conduit for making it all happen. GPOs report huge savings on all sorts of purchases, from consumables to capital equipment. I believe that the cost savings we hear about are erroneous and vastly overreported, especially for capital equipment. As a clinical engineer who has been participating in the purchase of capital medical equipment for more than 40 years (and who worked for Premier for 21 years, from 1977 to 1998), I believe that the life cycle cost of medical equipment is largely unaffected (and may even be increased) by the GPOs. Vigorous bidding and multiple buys, as well as the lure of “preferred vendor” status, encourage large manufacturers to reduce the list price of medical equipment by an average of up to 50%. This looks amazing to a C-suite OBSERVATIONS AND INSIGHTS

Ever since the Centers for Medicare & Medicaid Services (CMS) restricted the ability of hospitals (and anyone else money receiving from the agency) to deviate from manufacturer-recommended procedures and schedules for the scheduled maintenance and care of medical devices, everyone is talking about the only way out of this myopic rule: the alternative equipment maintenance (AEM) program. AEM is a program whereby a logical and justifiable approach is made concerning the real-world maintenance needs of medical equipment. It has long been recognized by professional maintainers that the procedures and frequencies of maintenance that are called for by the manufacturers are, in many cases, not realistic, necessary, or beneficial to the patient or to the user or owner of the equipment. These procedures that appear in the service manuals are developed before the equipment is released for sale and before any data about how it performs in a live situation are available. The procedures and frequencies are usually written by the engineers who design and build the equipment. They are overly cautious and tend to err on the side of maintenance that is too rigorous and too frequent. This is done for a couple of reasons. First, they are trying to save the company from liability from lawsuits and the costs of equipment failures if the equipment should fail and/or someone should be injured. Second, too many planned maintenance (PM) inspections can only make the manufacturer more money, because they are the ones who are usually paid to perform them. This possible financial incentive for frequent PMs was noted by ECRI Institute in the 1980s. So how does one develop an AEM? It really isn’t too hard. First, we need to start with a really good inventory—one that has very consistent descriptions for all devices. Manufacturers and models help the process but aren’t as critical as device description. Second, we flag all items that are not eligible for the AEM program. This includes lasers, imaging devices, and ultrasounds. These are defined by CMS in its letter of Dec. 20, 2013. Third, we identify all items that are on a manufacturer’s service contract (with the manufacturer who made it). These do not need to be evaluated, because the original manufacturer is maintaining them, hopefully, to the original specifications. Fourth, we need to take the remaining items and subject them all, one at a time, to a risk analysis evaluation. The most popular is the OBSERVATIONS AND INSIGHTS

What happens to a healthcare technology management (HTM) department when a hospital is bought by a larger hospital system? All too often, the reason for the acquisition is to achieve economies of scale and reduce duplication of positions. So, for an HTM department in the acquired hospital, it often means being absorbed into a larger department. And often, these larger departments are not functioning as well as your small department. Also, the large system might have everything outsourced to an independent service organization, or its cleverly disguised twin, the multi-vendor service company. I have experienced several instances lately where a highly functioning department is threatened with extinction because the larger organization forces the newly acquired hospital to adopt their business model. How do you stop this? Actually, you have several options. You can give up and go along with whatever the mother organization decided to do. You can fight for your own autonomy, attempting to keep your part of the world intact and separate from the mother ship. Or you can make an attempt to take over the mother ship. It is this third option that we will talk about. If your independent hospital becomes a part of a hospital system, chances are that you will lose your autonomy and become a biomed supervisor for the bigger system instead of a manager for your independent hospital. To preserve your independence, or even mount a takeover of the larger system’s biomed department, you have to start preparing yesterday. When two departments combine, your goal should be to demonstrate that yours is the better department and that the role of corporate director of HTM should be yours. Here’s how: Get your inventory in order. Your inventory should be complete, including all medical devices, whether on contract or not. You should have a complete inventory. By the way, just having descriptions, manufacturers, and model numbers isn’t enough. You need acquisition dates, price paid, owner department and detailed preventive maintenance procedures for every device. You need to have all fields filled in completely. Document all work performed. Not only must your in-house techs document all of their work, but also work performed by outside vendors must be entered. The documentation must include total hours of in-house labor along with the hospital’s cost for parts and outside labor. Service contract costs must be distributed among the items covered. The reason for all of these data is so that you can engage in data mining and produce impressive reports, charts, and graphs for upper administration. The higher-level data analysis will demonstrate to them that you are more than a repair technician who supervises other repair technicians. You should know your inventory inside and out. What is the value of your inventory? What department OBSERVATIONS AND INSIGHTS