By George M. Vunovic BSEE, CBET, CCE, Vice President Medical Equipment Management, OC Reilly, Inc.
(Jan. 16, 2024)—Memorial Healthcare System has been a leader in providing high-quality health care services to South Florida residents for more than a half-century. As part of its executive team’s ongoing drive to achieve top efficiency and cost-effectiveness, clinical engineering – the maintenance and performance of medical equipment across the system – drew special attention and eventually took shape as a key initiative.
Initially, a single outsourced vendor employed a team that worked on-site at Memorial’s facilities, managing nearly 100% of clinical engineering services. An early analysis identified two essential areas requiring immediate attention. First, these clinical engineering services had become somewhat decentralized, suggesting there was room for meaningful improvement and an opportunity to save millions based on industry metrics. The outsourced provider had about 40 full-time employees working on-site across six hospital sites and numerous outpatient locations, alongside four Memorial internal clinical engineering managers. This created a mixed bag of management styles and areas of authority and responsibility. Second, the decentralization of clinical engineering had a potential impact on IT and cybersecurity issues related to Memorial’s medical equipment inventory.
Considering these issues, it was identified by the OC Reilly team in support of Memorial that insourcing this program could improve performance, ensure patient care standards were met, enhance cybersecurity oversight and simplify budgeting, making it more predictable by establishing fixed costs. Our initial assessment estimated a range of savings from $3 million to $4 million, with $3.6 million as the target. The first-year savings actually totaled $3.7 million – roughly a 20% reduction from what Memorial had been spending annually under the former vendor relationship, and with enhanced control of the clinical engineering operations.
It is important to realize that this represented only the start of additional operational improvements and the corresponding cost savings at Memorial. Memorial centralized its clinical engineering staffing and asset management database to reach the desired end goal. Each health system is different, with potentially different ways to achieve its own notable improvements.
Flexibility and remaining open to fresh thinking will always be the key, and our knowledgeable supply chain professionals at OC Reilly stand ready to provide our insight in each unique situation. Read the full story of how OC Reilly collaborated with Memorial to achieve a 20% cost reduction in clinical engineering services in the Q4 2023 issue of Supply Chain Strategies and Solutions by clicking here.
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