Medical, Lab & IT Equipment Benchmarking & Analytics

Medical, Lab & IT Equipment Benchmarking & Analytics

May 24, 2017

Blog

Finding Capital Savings: Wringing Water from a Stone?

If your boss asked you to wring more savings out of an already squeezed capital budget, would you be able to do it?

Faced with an unexpected budget shortfall, a community health system did just that by finding $3 million of untapped savings for a multi-year facility remodel. With construction cost overruns that left insufficient funds for the required capital equipment purchase and installation, the hospital’s supply chain leaders were tasked with finding a way to cut an additional $3 million, or 13 percent, from the more than $23 million approved budget. The team had already worked hard to trim unnecessary costs so this seemed like an almost impossible task.

The supply chain team began to work with clinical staff to rethink the problem and develop new options for addressing the budget challenge.

Here are three strategies that helped this hospital shave $3 million from its capital budget:

 

  1. Reshape the asset list

This team got buy-in on a revised capital budget by convincing stakeholders that they couldn’t fit “10 pounds in a 5 pound bag.” As simple as this may seem, this basic principle was extremely critical to getting their options off the ground. And while easy to say, it was very difficult to do. The supply chain team was armed with information about how the various departments could get their clinical needs met without compromising patient care, and worked with vendors to agree to greater savings on the equipment purchases. For example, one vendor reduced its pricing because the department agreed that it would reconsider the decision to purchase additional modalities from the vendor.

  1. Get over new versus pre-owned

The supply chain team helped the other departments across the hospital recognize the significant savings that selectively purchasing pre-owned refurbished equipment could bring. They reassured department physicians of the quality of pre-owned equipment and importantly, the faster implementation. When the team presented objective quality and cost information to the physicians, they supported the pre-owned options and allowed the group to re-prioritize what would be purchased new.

  1. Supplement the in-house team with external resources

The very tight time frame and many other competing priorities had already stretched the supply chain staff.  Fortunately, the CFO recognized that the hospital could accelerate negotiations with suppliers by bringing in a third-party expert with knowledge of specific vendors’ negotiation strategies and tactics. These supplemental negotiating services added bandwidth at a critical time and allowed the team to stay on schedule.

 

Using these strategies, this hospital was able to do what initially seemed impossible. By finding more than $3 million in hidden savings, the supply chain team addressed an unanticipated budget shortfall and kept this critical expansion project on track.

To learn more about find hidden savings in your capital equipment budget, visit the Miga website.

Know the right price.

And get it.

Having the right information saves hospitals time and money on medical equipment lifecycle costs.

Scott Bosch

Manager of Clinical Engineering

Park Nicollet Health Services

“The groups responsible for managing technology in our healthcare organization need data and analysis to manage costs and make informed decisions. Miga’s EVMS platform is an important and valuable resource that helps us make the right decisions for both our clinical priorities and budget.”

Matt Werder

Chief Technology Officer

Hennepin County Medical Center

“Miga’s data is key to helping us be good financial stewards and validates we are using our resources wisely. The market intelligence provided by Miga’s EVMS platform has allowed us to save substantial amounts of money.”

"Miga’s ability to match equipment donated by their customers with the needs of our medical projects has been a most valuable and welcomed resource."

Jim Tierney

CEO

Suburban Radiology

“Miga’s data, analysis and expertise – in particular related to the fair market value of clinical equipment – is a critical resource we need to support strategic acquisitions, divestitures and joint ventures.”

Eric Hoag

Director, Corporate Strategy & Development

Allina Hospitals and Clinics

“Miga’s proprietary data and expertise was critical to our ability to close an acquisition deal quickly and with a high level of confidence in our valuation.”

Bill Barta

Corporate Director, System Imaging

Fairview Health Systems

“Miga’s objective information-based approach and understanding of the needs of hospitals makes them a valuable resource and helps us make the most cost effective spending decisions.”

Matt Blashill

Enterprise Director of Supply Chain

Lake Region Healthcare

"There’s a personal touch that sets Miga apart from their competitors. They don’t just offer great insights. They always take the time to provide additional analysis that is meaningful and actionable."

Dan Bazinet

Director of Clinical Engineering

Southcoast Health

“In all my years in health care, I’ve used a lot of benchmarking tools. Most simply repeat information passed along from others; Miga’s information tells me what’s really happening.”

COO

Community Hospital

"Miga's negotiating skills save us time and money. And their unique understanding of the market means we’re always playing from a position of strength."

Supply Chain Director

Regional Healthcare System

“All suppliers claim to have excellent customer service. Miga actually walks the talk and always has our best interest at heart. We love working with them."