The way in which hospitals provide and manage their medical and diagnostic equipment is changing radically.
This has profound implications for NHS procurement. David Rolfe, Managing Director of Asteral, looks at a new model for healthcare sales: the Managed Equipment Service.
The NHS is under increasing pressure to focus more on patient needs, while at the same time improving its financial management. This double bind is similar to the pressures that healthcare companies face in an increasingly competitive global market.
One successful strategy employed by businesses to improve both financial management and customer satisfaction is to develop long-term partnerships with a small number of suppliers who really understand their business. This frees them to focus on their core activities of developing new products and looking after customers.
Pioneering NHS managers are adopting similar strategies, and looking for new ideas and methods to improve efficiency.
The procurement cycle
The traditional way of procuring new major items of medical equipment, from high-end MRI scanners through to theatre equipment and ultrasound, is through a series of one-off procurements governed by EU rules. Each purchase involves a number of timeconsuming steps – some of which add value, but many of which simply distract NHS staff from their role in treating patients, leading to poor morale and fewer patients being treated.
Typically, once an acute Trust had identified the need for a new piece of equipment, it would either have to embark on a fundraising campaign or have to find the money from its annual capital budget. Once funding was agreed, a beauty parade of providers would be assembled and procurement staff would advise and make recommendations to clinicians – usually based only on information provided by the sales teams of the prospective suppliers.
Due to the ad hoc nature of this approach, equipment was often used long after its correct lifespan, leading to patients being diagnosed or treated using technology that was obsolete. Once the equipment was installed, the Trust would pay for a service and maintenance contract, but would have little recourse in the event of poor performance and limited data on the equipment’s reliability. In due course, the equipment would reach the end of its useful life and the whole cycle would begin again.
A far more effective approach to equipment management has been devised by borrowing best practice principles from other industries.
Breaking the mould
Managed Equipment Service (MES) is just that alternative model, designed to address the shortcomings of the traditional approach to purchasing medical equipment. It takes the principle of outsourcing non-core activities that is common in business by transferring responsibility and risk to third-party specialist organisations with appropriate expertise.
The MES provider becomes a partner to the acute Trust, providing a single point of contact to handle procurement, maintenance, training, financing and other aspects of medical equipment management. The range of activities that can be outsourced to a single point of contact is shown in Figure 1.
Some equipment manufacturers provide MES solutions themselves, but MES really comes into its own when it is vendor-independent. Because companies such as Asteral procure large volumes of equipment from all of the major manufacturers, they are able to gather sophisticated intelligence on which products are most reliable and valued by clinicians. They also have no particular alliances with manufacturers or suppliers of medical equipment. This enables them to support the best purchasing decisions across all potential equipment suppliers, matching customer needs to the available technology solutions.
Having accurate data on reliability is essential. It enables MES providers to reduce maintenance costs and equipment downtime. Consequently, vendor-independent MES providers are able to provide guaranteed equipment uptimes for acute Trusts. As a result, waiting times come down and last-minute cancellations are reduced, leaving staff free to concentrate on diagnosing and treating patients rather than managing equipment failure.
A flexible friend
Other benefits flow from a managed service approach to procurement. From a financial perspective, MES is attractive because it offers a planned, long-term strategy. An MES can deliver predictable financial savings, as well as offering further savings through improved efficiency and the transfer of risk to the MES provider.
The MES model also helps to address the perennial challenge of how to support innovation in a sustainable way throughout the NHS and within individual Trusts. A managed approach to equipment means that early adopters with a clinical need can access cutting-edge products in a timely and planned way, thus genuinely improving the services they deliver.
MES can be introduced as a stand-alone contract or as part of a major hospital building programme such as a PFI framework. For example, Asteral is working in a pioneering partnership with Peterborough (Progress Health) PLC to provide managed diagnostic and theatre equipment services to three NHS hospitals in Peterborough: the new acute hospital, the Integrated Care Centre and the Mental Health Unit.
The Asteral team are working closely with the Trust to ensure that the new hospital building supports all of the equipment required and is suitable for any manufacturer’s equipment in the future. Asteral will project-manage the equipment installation and acceptance testing, ensuring that the new hospital is ready to deliver full services on schedule.
Asteral also provides an MES for all the equipment in the new imaging department at the Whittington Hospital, London, which opened in November 2006. The vendor-independent scheme has provided a broad range of new equipment, including six Philips Digital Radiography rooms, a 64-slice Siemens CT Scanner, a Philips Achieva 1.5T MRI Scanner, a GE Infinia Gamma Camera, six Philips ultrasound units, three Phillips Mobile C-arm Image Intensifiers and an Xograph digital dental unit.
Like all innovation, MES forces us to change how we do things – but these changes deliver real operational progress for NHS acute Trusts, to the benefit of staff and patients.
Another fine MES
Managed Equipment Service is an innovative approach to procurement that takes the worry and effort of managing the medical equipment supply and transfers it to a specialist. With an MES in place, availability of medical equipment is no longer an issue for clinicians or managers.
Like all innovation, MES forces us to change how we do things – but these changes deliver real operational progress for NHS acute Trusts, to the benefit of staff and patients. David Rolfe is Managing Director of Asteral. David has worked on developing asset services and solutions for the NHS since joining the Brook Henderson Group in 2000. Previously, David worked in structured asset finance for the Royal Bank of Scotland.
Asteral is the leading vendor-independent Managed Equipment Service provider to the NHS, with a 10-year track record of managing medical equipment for NHS Trusts. Its customers include University Hospitals of Leicester NHS Trust, Whittington Hospital NHS Trust, Whipps Cross University Hospital NHS Trust and Peterborough and Stamford Hospitals NHS Foundation Trust. For more information, visit www.asteral.com or contact David Rolfe on 0118 900 8100 or email@example.com.