Strategies for success in purchasing medical technology.

Abstract

Randy Uttley, MBAHA, is director of operations at Pediatrix Medical Group in Phoenix, AZ. E-mail: randall_uttley@ pediatrix.com Emerging medical equipment and technologies (“medical technology”) offer the promise of improved patient outcomes, decreased labor costs, and increased operational efficiency and capabilities. Unfortunately, the allure of such benefits often lead well-intentioned healthcare leaders to make purchasing decisions without conducting a proper assessment of the resource demands, up-front costs (including integration costs), workflow impact, reimbursement potential, and other factors needed to fully understand the value added by new medical technology. One of the prevailing tenets of healthcare economists is that the continued development and dissemination of new technologies is a primary driver of increased healthcare costs in the United States. A recent study from Rice University of Texas hospitals between 2000 and 2007 concluded that technology costs, rather than hospital market power or cost shifting to private payers to compensate for the uninsured, was the largest contributor to the growth in hospital pricing. If healthcare leaders fail to conduct thorough due diligence prior to the purchase of medical technology, organizations run the risk of adding unnecessary costs to an organization’s budget without adding significant clinical or operational value. Admittedly, it is a challenge to find the right formula to accurately calculate the projected return on investment (ROI) for medical technology, as well as to decide which technical features and capabilities are best suited to meet to an organization’s strategic needs. The goal is to find an accurate measure of the medical technology investment and return in terms of patient care and safety and organizational efficiency. This article outlines practices for making financial and strategic decisions related to general medical technology purchases, and identifies factors that impede effective technology planning and decision making. This article does not discuss decisions related to electronic health records (EHRs) ROI.