Medical, Lab & IT Equipment Benchmarking & Analytics

Medical, Lab & IT Equipment Benchmarking & Analytics

January 18, 2018

Blog

The Cost Containment Imperative for 2018: Is There a Silver Bullet?

There’s a common thread that runs through most published predictions regarding this year’s healthcare environment: 2018 promises to be an even more challenging year for hospitals. Experts predict that the pressures hospitals faced in 2017 – namely, uncertainty over healthcare reform, ever-increasing costs and declining reimbursements — will intensify this year.

A recent article in Healthcare Dive, Why hospitals will face greater cost containment efforts in 2018, caught our eye. Hospitals’ need to reduce spending is not news, but the current healthcare environment has created a heightened sense of urgency for managing costs and expenses. The implications for 2018 are clear; the cost-savings actions taken in 2017 simply aren’t going to be enough in the 2018 environment. But the good news is that hospitals willing to embrace change can have a meaningful impact on their cost-containment initiatives in 2018 and beyond.

The article outlines three categories that hospital executives are expected to focus on to drive cost savings this year, including clinical variation reduction, labor management and revenue cycle management. While these are important strategies, we believe there’s an overlooked opportunity that’s worthy of attention: medical equipment costs. While there’s no single silver bullet for controlling costs, managing medical equipment lifecycle spending is the closest thing to a silver bullet that hospital leaders have for reducing costs in 2018.

Although it represents over $95 billion in total annual spending according to U.S. Census Bureau estimates, medical equipment lifecycle costs are generally not on executives’ radar as a place to look for savings. We have seen hospitals across the U.S. realize savings of $13,000 per bed (or $3.9 million for a 300-bed hospital) by adopting a systematic approach to managing medical equipment costs and related expenses, such as service contracts, throughout the life of the equipment. To carry this example further, $3.9 million in bottom-line savings translates into the revenue equivalent of $195 million for a hospital operating with a 2% margin. Finding savings in your capital equipment budget can not only bolster the bottom line, but also relieve some of the pressure of finding new revenue sources in today’s challenging market.

This year hospital executives will need to find new levers to pull in order to drive down costs. As your hospital begins to execute on its 2018 plan, how will you address the cost-containment imperative?

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."