Waste in healthcare is defined by The New England Healthcare Institute as “healthcare spending that can be eliminated without…
A hospital redesigns its distribution and management processes using a real-time location system.
Waste in healthcare is defined by The New England Healthcare Institute as “healthcare spending that can be eliminated without reducing the quality of care.” U.S. healthcare waste totals around $700 billion annually, according to a 2009 Thomson Reuters report. Given the current climate in healthcare, where hospitals are feeling pressure to reduce waste by improving processes and doing more with less, healthcare systems are finding it necessary to look at ways to optimize what they currently have while still providing the best care possible and protecting patient safety. In fact, a recent ACHE study reported that 80 percent of CEOs in healthcare settings recognize this and include the reduction of operating costs as a priority on their agenda.
Mobile clinical assets are an indispensable part of healthcare delivery. Whether it’s an IV pump, a bedside telemetry unit or a wheelchair for transport at discharge, virtually every patient depends on one or more mobile assets during a hospital stay. However, despite its key role in patient care, the effective management and distribution of mobile equipment remains an ongoing challenge for many hospitals striving for efficiency. As a result, hospitals nationwide are overspending billions each year – usually unknowingly – on mobile assets that are not used effectively.
According to industry research performed by GE Healthcare, hospitals average two IV pumps per bed, and the utilization rate of this equipment is only 42 percent. The remaining 58 percent of the pumps (which can cost up to $15,000 for specialized infusion systems) can be found in a variety of settings outside patient care including idle, in storage, in transportation or being serviced.
Despite this significant percentage of pumps not in direct use, the same studies report that hospital staff were able to find pumps when needed only 36 percent of the time, resulting in nurses spending 10, 20 or even 30 minutes per shift searching for clean, working IV pumps. Additionally, healthcare facilities reported that 10 percent of this equipment is not only unavailable but seems to simply disappear – lost in the system due to underutilization and inadequate tracking.
In an effort to ensure that staff has the necessary equipment to provide care to patients and minimize the amount of time spent searching for it, a common but costly solution for hospitals is to overstock these items, hoping this will increase the chances of equipment being on hand when needed. Although it’s a quick fix, this strategy not only lowers the overall utilization rate of existing equipment but also increases a hospital’s capital and operating expenditures. The real solution lies in the following: assess the current inventory and utilization; redesign workflow processes based on that assessment; educate staff to understand new processes; and integrate appropriate technology to monitor, sustain and improve asset distribution and usage.
In 2004, staff at Bon Secours Richmond Healthcare System recognized the need for optimization and decided to implement new technology to better utilize the use of mobile equipment in their hospitals. Decision makers elected to adopt a real-time location system (RTLS) to better manage the assets of the system’s four hospitals: St. Mary’s, St. Francis, Memorial and Richmond Community. To make the best use of its RTLS, Bon Secours selected the GE Healthcare AgileTrac asset manager system, which uses workflow methodologies and automation technology to manage mobile equipment.
Once Bon Secours selected AgileTrac, GE Healthcare worked with the system to assess and optimize its equipment workflow, resulting in the design of new processes to better utilize mobile equipment. The newly identified processes were then fed into the AgileTrac system and reinforced by the system’s RTLS to manage more than 11,000 products, from IV pumps to wheelchairs, to enable hospital staff throughout the 850-bed system to locate equipment immediately, even across facilities.
In addition to helping staff focus on patient care rather than spending unnecessary time locating equipment, Bon Secours Richmond realized a savings of more than $5 million through reductions in equipment costs since adopting the AgileTrac system. Additionally, the system noted a significant decrease in lost equipment along with improvement in the use of staff time and resources.
Eighty percent of Bon Secours’ savings were attributed to better utilization, which resulted in a reduction in unnecessary equipment. For example, St. Mary’s was able to reduce its IV pump inventory from 520 to 392 – a 25 percent reduction. This reduction also improved the facility’s utilization rate. Prior to its use of AgileTrac,
St. Mary’s was at approximately 60 percent utilization of IV pumps. After, it was raised to 92 percent. Additionally, the fees paid by Bon Secours to a third party for equipment management services have decreased by nearly 50 percent per hospital bed.
In 2008, after seeing such tangible success, the health system elected to promote further efficiency by expanding its use of tracking technology beyond asset management. Using the same infrastructure that was used to track equipment, Bon Secours initiated a system focused on the flow of patients from the operating room. As a result, operating room staff was better able to manage their workflow and the movement of both patients and equipment.
Through this expanded effort, St. Mary’s was able to reduce staff calls for missing equipment by approximately 50 percent. Additionally, the hospital was able to reduce the time needed to prepare a room for surgery from 45 to 20 minutes. Now, six years after installing AgileTrac to manage assets and almost two years of tracking patients in operating rooms, Bon Secours Richmond is realizing a savings of approximately $2 million each year.
Bon Secours Richmond recognized the need for an innovative approach to address a challenge faced by healthcare systems around the country. As shown by the results, breaking the cycle of ineffective management of mobile assets offers a significant opportunity for healthcare organizations to make serious gains in achieving their patient care and cost management goals. By redesigning a hospital’s distribution and management processes using tracking and utilization solutions such as AgileTrac, healthcare facilities are able to reduce inventory, avoid capital purchases, lower or eliminate rental and lease expenditures and decrease maintenance service costs. Meanwhile, on the care delivery side of the equation, ensuring that mobile clinical assets are always in the right place at the right time and in good working order contributes to improved patient care and staff satisfaction.
Fran Dirksmeier is managing principal, GE Healthcare’s Performance Solutions, and general manager of the AgileTrac technology platform.
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