About two years ago, leadership at the William Osler Health System in Toronto, one of the largest community hospital systems in Canada, realized there needed to be a strategic, long-term plan in place for when it came time to replace the large fleet of mostly new diagnostic equipment at its 1.3 million-square-foot Brampton Civic Hospital site. Osler is also building a new wing at Etobicoke General Hospital in Toronto and opening a third site in Brampton in early 2017. “It’s going to have a huge financial burden on us, as all the equipment is going to need to be replaced at around the same time,” says Joanne Flewwelling, executive vice president of clinical services and chief nursing executive for Osler. “We’re going to run into this again and again with the new buildings.”

After putting out a request for proposal, Osler signed a $154 million, 15-year contract with Siemens Healthineers through the company’s new Enterprise Services offering. The program includes equipment management, stretching the system’s financial burden for capital costs across 15 years, but it is not limited to just maintenance and technology upgrades.

Like many companies that offer enterprise- wide asset management solutions, Siemens also provides advisory services focused on improving workflow and clinical outcomes, as well as facility design services, training and education, procurement, financing and overall managed departmental services. “There’s a wide range of services, all focused on managing assets for our customers in a cost-effective, high-quality manner,” says Lisa Collins, vice president of Enterprise Services for Siemens Healthineers.

Starting with basics
Equipment management is still a large piece of the puzzle for many facilities. The Remi Group sticks to the basics of managing equipment maintenance, with one-third of its business in the medical field, and the rest in government and higher education. For hospitals, instead of having more than two dozen OEM or ISO maintenance contracts, they will have just one agreement with the North Carolina-based firm, which will provide one point of contact when there are equipment issues.

The company can generally save a hospital 17 percent to 25 percent compared to a maintenance contract, says Dan Schuster, chief executive officer of The Remi Group. There are also intangible aspects of the arrangement. “There’s less aggravation,” Schuster says. “Someone else is facing down the vendor. Believe me, when our client is down, it’s a code orange for us.”

Aside from CT and MR equipment, The Remi Group can also cover laboratory equipment, as well as computer and security equipment. Schuster says some types of equipment, such as sterilizers and HVAC systems, receive better service and price under a traditional maintenance contract. “The decision really gets down to the end user of that contract,” Schuster says. “Yes, there are savings, but they might have their own reasons for why they want to keep it under a maintenance contract.”

RENOVO, which also focuses on just equipment management, generally starts off by helping the leaders of a facility figure out what they are spending fully on contractual agreements with an OEM or ISO, and service as needed without a contract, as well as the facility’s internal expenses within the clinical biomedical engineering department.

“We put into a database what it truly costs to maintain under a management program through RENOVO,” says Sandy Morford, RENOVO’s chief executive officer. “Ninety-nine times out of 100, that is going to generate a cost savings, generally north of 15 percent.” That savings comes from economies of scale. “Because of the large volume of business we do and the amount of equipment we take care of, we will get better rates for service or parts,” Morford says. “We just have better volume to bring to the table.”

Add-ons
Siemens, a longtime manufacturer of medical equipment, including imaging equipment and software, added its Enterprise Services offering over the past year. The division focuses on procurement, installation and maintenance of equipment, but also offers services related to other challenges that health care systems face. “It’s really understanding what their challenge is,” Collins says. “What is the problem they’re trying to solve? It is a very flexible offering.”

Flewwelling, of the William Osler Health System, says the transition to working with Siemens has been smooth over the first year. Within the last six months, it replaced a Siemens Avanto 1.5 Tesla MRI with a Siemens FIT 1.5 Tesla MRI at Etobicoke General, and with a portable MRI installed right outside of the emergency department, there was no downtime and the project management support from Siemens included planning on how to move patients through.

“This used to be very disruptive to our organization and the clinical staff was nervous because it was the first big replacement,” Flewwelling says. “It was absolutely seamless.” Beyond equipment maintenance and replacement, Siemens is also on hand to provide help with other projects. For example, the system is looking at expanding and enhancing its stroke program, and the contract includes consulting support. “We were really looking for more than someone who would replace or sell the equipment,” Flewwelling says. “We were really looking to a long-term partnership.”

Sodexo, a longtime provider of asset management services, also goes well beyond equipment repair and maintenance, to include capital planning as well as benchmarking against similarly situated hospitals. “Our customers are looking for something beyond repair and maintenance,” says Steve Cannon, a senior vice president at Sodexo. “They’re looking to take their programs to the next level. We’re helping them from a technology assessment side.”

Benchmarking may include, for example, a children’s hospital looking at the number of IV pumps it has, compared to a similarly sized or similarly situated facility. Sodexo has its own customer database and compares that against industry benchmarks.

A fit for every client
An asset management program generally isn’t one size fits all, and companies can work with a facility to include in-house biomedical engineering departments in the arrangement. “We have clients where the in-house departments take care of general biomedical patient care equipment and we cover the more sophisticated imaging and cardiology technology,”
says Morford of RENOVO.

“Not every program is fully managed.” Staffing arrangements differ by facility. In a managed equipment services (MES) partnership, such as the kind that Siemens has in place with the William Osler Health System, the company has an on-site team that includes an operations manager, who manages day-to-day operations on the assets; two support coordinators, who make rounds on the equipment and contact the OEMs; a clinical engagement lead, who provides change management throughout the procurement process; and an implementation manager, who manages installation and training. They are Siemens employees who become part of the hospital’s team.

Under an agreement with The Remi Group, if the company finds that a hospital’s in-house biomedical engineers are qualified to perform repairs on equipment placed on its program, the company pays the hospital for the work completed by its in-house staff.
With Sodexo, in most cases, the in-house biomedical group transitions to Sodexo and those workers become Sodexo employees. “We work with each client to determine the best staffing model for their respective goals and objectives,” says Cannon of Sodexo. “In most cases, we have biomedical engineers that are part of our team in almost every client location.”

Aside from its executive and senior management teams, asset management companies also employ back office staff, including accounting, information technology, human resources, sales and marketing.

Advice for facilities
Flewwelling notes that it is critical for hospitals and health systems looking into a similar arrangement to have buy-in from various stakeholders, including clinicians. The contract is set up so that 40 percent of the system’s equipment will be replaced with Siemens products, while the other 60 percent can be purchased from any vendor. “Clinician choice was very important,” Flewwelling says. Osler officials also made sure the service was standardized across the health system’s clinical services, with one point of contact.

The MES partnership did not disrupt staffing at Osler, because the biomedical engineers do not work on digital imaging equipment. “Osler’s employees and programs are pleased to have a ‘one stop shop’ and single phone number for support when requiring service on existing and new equipment,” Flewwelling says. “The MES contract has made the process more seamless and efficient, allowing Osler staff to have even more time to focus on the health and well-being of our patients.” The response of the biomedical engineering department to an asset management company depends on how open the in-house employees are to change, says Morford of RENOVO.

“When an outside asset management firm is brought in by the hospital’s executive team, the in-house biomedical employees’ biggest concern is their job security and compensation,” Morford says. “With RENOVO, once they know that their employment will continue and their compensation will not change, and that they will be supported by a nationwide organization solely focused on providing quality clinical engineering services, their concerns start to subside. We have to prove to them over time that we do what we say we’re going to do.

There will always be those one or two individuals who didn’t agree with their hospital administration’s decision to outsource their department, and oftentimes these technicians will leave for other in-house employment opportunities.” An asset management program can be a good fit for any facility, from small, rural facilities to academic medical centers, to large regional IDNs. “There really is no segmentation by size of the facility in a health care provider’s decision to outsource,” Cannon says. “The decision to outsource the clinical engineering function is based, rather, on the long-term goals and strategy of the respective health care provider.”