How to Manage Medical Device Supply Chain Challenges
By Christopher Cheney
Medical devices are one of the most challenging facets of supply chain management at health systems and hospitals.
Medical devices include a range of equipment from monitors, to IV pumps, to million-dollar magnetic resonance imaging machines. Hospitals not only need to acquire medical devices but also need to keep track of them and maintain them in good working condition.
This equipment is high in the supply chain hierarchy, says David Klumpe, PharmD, president of clinical asset management solutions at Indianapolis-based TRIMEDX. “Medical devices are an important part of the hospital supply chain. On the capital side, medical equipment represents 20% to 25% of what the hospital is spending every year on capital equipment. It is a major driver of organizational spending for capital on an ongoing basis.”
He says there are four primary supply chain challenges related to medical devices:
- “The first challenge is gaining visibility to what you own. We find that many of our clients do not fully understand everything that they own. When we help them complete an inventory, there is a pretty big difference between what they think that they own and what they actually own—they can be off as much as 30%,” he says.
- “The second challenge is measuring device utilization. Hospitals own thousands of devices and they need to know how many they are using on a regular basis. Nearly every hospital struggles with this challenge because it is very difficult for hospitals without technology to monitor device utilization. A typical hospital is only using 40% to 50% of the equipment that they own on any given day. So, asset utilization can be far less than what they might expect,” Klumpe says.
- “The third challenge is that many hospitals lack comparative benchmarks—how much equipment does a hospital own compared to similar hospitals. For example, how many ventilators does a hospital own and how many IV pumps does a hospital own? Many hospitals do not have comparative benchmarks to gauge the level of investment they have made in their equipment,” he says.
- “Lastly, like a lot of things in a hospital, there are many stakeholders for medical devices—many people involved in decisions about clinical equipment. There is the administrative point of view, the frontline caregiver point of view, the finance point of view, the regulatory point of view, and the infection control point of view. So, because there are many stakeholders involved, there can be complex decisions that need to be made with input from many individuals,” Klumpe says.
There are strategies to rise to these challenges, he says. “The first strategy is to create and maintain an accurate single source of truth. A hospital should have a comprehensive inventory of all the equipment that it owns in one location, where they know everything about that equipment. There should not only be an inventory of equipment but also how much of it is utilized, and an accounting of how old it is and whether parts are available.”
The second strategy is to establish effective governance over medical devices, Klumpe says. “There is governance over pharmaceuticals and supplies, and there should be the same level of governance over the ongoing investment in clinical assets. You should get all of the stakeholders around the table, get alignment around goals, and establish accountability for who can make decisions and how decisions are going to be made.”
The third strategy involves technology, he says. “If you are going to try to do this work with manual processes, it is going to be very difficult. So, you need to seek solutions that can automate the collection and maintenance of the data. You need to automate the understanding of utilization. You need to automate infusion of benchmarks into conversations about medical devices.”
Managing medical devices
Hospitals need to establish the useful life of medical devices to help maintain the equipment in good condition, Klumpe says. “Many hospitals rely on the equipment manufacturers to make recommendations about replacement intervals, but there are many pieces of equipment that have useful life far beyond what the manufacturer may suggest through a robust clinical engineering program. Often, hospitals find a partner who can help bring insight to useful life beyond what the manufacturer might suggest is the useful life, which is a way for hospitals to stretch their capital.”
There are two primary strategies to extend the useful life of medical devices, he says.
“One approach is to have a quality clinical engineering program. You should have a team of highly trained, disciplined clinical engineers who are able to do repairs on the equipment in a timely way. These engineers can keep the equipment functioning past what the manufactures have suggested as the useful life of the device,” Klumpe says.
The other approach, which goes hand-in-hand with a quality clinical engineering program, is an advanced supply chain, he says.
“There are parts available for clinical devices after the manufacturers have stopped manufacturing parts. There are several firms that provide ‘aftermarket’ parts. You need to understand that market and be thoughtful about who you are going to buy aftermarket parts from. An advanced supply chain will conduct rigorous supplier management and make sure parts are coming from qualified suppliers. This supplier management ensures that the device is safe and continues to function as it needs to for the care of the patient.”
Christopher Cheney is the senior clinical care editor at HealthLeaders.