Why Your Hospital Should Use a Centralized Asset Management Model to Face COVID-19 Challenges

by Scott Hondros, MHA, SCPM, SVP of Professional Services

The COVID-19 pandemic revealed massive deficiencies in healthcare supply chain processes. As I work with hospitals across the country, I have seen that healthcare systems operating in a Centralized Asset Management Model are much more successful in efficient deployment of their resources. What is more striking is that all of them leveraged a Real-Time Location System (RTLS) as part of that model.

Here are the top 3 reason why deploying a Centralized Asset Management Model supported by RTLS makes sense as we continue to face COVID-19 challenges:

When dealing with pandemic outbreaks such as COVID-19, what you really need is to immediately find the proper equipment necessary to help a patient. In a perfect world it should not matter if the piece of equipment, such as a respirator, is owned by the ED or some other department in the organization. What is important is that you find its availability as efficiently as possible. For this reason, it makes sense to NOT assign general use equipment to a specific department. In order to accomplish this, you need to have a system and associated processes in place that make it convenient and reliable to match current patient needs to a pool of available equipment. Unfortunately, the process shortcut many hospital systems take is assigning specific equipment to individual departments, which does not solve the core problem, and instead causes hospitals to over-purchase equipment and promote an unhealthy “it’s mine” mentality. In worst case scenarios it puts patient safety and outcomes at risk as equipment is not available when and where it is needed the most.

Healthcare organizations which have made the change to a centralized asset management strategy, and who leverage real-time technologies to make it work, admit that it required a cultural shift, but it paid large dividends. The reason RTLS systems make a centralized asset management strategy possible is that people will continue to claim ownership of or hide equipment UNTIL they have full confidence that what they need is actually available when they need it – and that’s what RTLS provides. Until that happens, hoarding and over-spending on mobile assets will continue.

The natural benefit of a centralized asset management structure is that a single pool of equipment is available for use by anyone in the organization. When properly functioning, everyone can access the equipment they need. This central pool also enables a smaller inventory of equipment to serve the same or even increased needs. This is especially important when facing a large influx of patients due to an epidemic such as COVID-19. To optimize the utilization of each type of equipment, accurate data is required, and staff need to trust that they can get what they want when they need it. In general, utilization rates of every asset type will increase, yet overall management costs will go down because there should be less equipment to maintain and/or hold service contracts on. At the healthcare system level, annual replenishment spends typically see a significant reduction in the first few years and then it stabilizes to maintain a more forecastable and manageable level over time.

This process works so well that healthcare organizations we work with are even creating centralized control centers (sometimes referred to as “Mission Control”). These teams can respond immediately to equipment needs and replenish inventory stock based on projected demand. They also look at utilization rates in detail and are able to understand by whom and in what areas equipment is most utilized. This insight allows process improvement teams to focus on processes, and not on doing laborious and painful data gathering.

A great example of the benefits an RTLS system can provide is a success story the Director of Equipment Distribution for a large medical academic center recently shared with me:
“Using RTLS data allowed my staff to better define par levels and as a result make smarter and more efficient “milk runs” to round up equipment from around the facility – all with less staff than was previously required.”
Having real-time visibility into the current location and status of all available equipment is even more important as healthcare systems operate surge sites to manage additional patient volumes.
That visibility is possible with Real-Time Location Systems that are now capable of operating in surge environments such as tents, convention centers, and other sites designated to treat patients during spikes in patient volumes due to situations such as infectious disease outbreaks, natural disasters, or other emergency events.

Our healthcare clients who have made the switch to centralized asset management have seen a significant reduction in rental spend. This has happened by making sure equipment is only rented when the hospital doesn’t have an available and appropriate device already in inventory. These systems also ensure that they don’t continue to pay rent on equipment after it is no longer needed, due to an inability to locate and return the rented device.

For example, since using RTLS to locate several thousand mobile assets, a major hospital in the Dallas/Fort Worth area has experienced significant, quantifiable reduction in their rental spend. The Director of Clinical Engineering and Sterile Processing stated that “we have not rented any of the asset types we placed RTLS tags on.” Given the significant savings and the well documented results, Senior Leadership readily provided additional funding to expand the scope of the RTLS system to tag several thousand more items.
These savings are critical as healthcare organizations face financial turmoil due to lower revenue levels caused by canceled or postponed elective surgeries and other non-emergent services.

IN SUMMARY there is no doubt that a centralized asset management program in a complex healthcare environment reduces costs and ensures patient safety. Likewise, there is no doubt that making a centralized management structure work successfully can be very daunting. However, with support of real-time visibility through Real-Time Location Systems (RTLS), it delivers significant financial, operational, and care benefits that cannot be disputed, including:

– Equipment is where it needs to be so it can be accessed easily.
– Efficient and effective preventative maintenance programs that experience a 90% reduction in the time it takes to round up equipment.
– Reduction or even elimination of rental spend
– Social changes and reduction in silos within the hospital as everyone sees the value of collaboration and sharing equipment and resources.

If your organization is considering a move to a centralized equipment management structure – let’s talk. We’d love to support your organization in making that transition successfully so you are ready to face COVID-19 challenges.