Clinical engineering and the science of the capital budget process

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Clinical engineering and the science of the capital budget process

May 24, 2019
From the May 2019 issue of HealthCare Business News magazine

Prime examples include items such as film-based X-ray units or older endoscopic systems. These may be less costly, but they are being superseded by more up-to-date systems such as digital X-ray or HD/4K endoscopic technology. Due to clinical necessity, their replacement may be dictated well before their useful life has expired.

In addition, totally new emerging technologies are changing the way healthcare is being delivered. Think how quickly real game-changing technologies such as smart/video Pills, light-based room disinfection, and soft tissue and orthopedic robotics have affected how a service line delivers healthcare.

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To help address this, clinical engineering has access to this information through professional organizations such as the Association for the Advancement of Medical Instrumentation (AAMI) and the American College of Clinical Engineering (ACCE), as well as blogs and networking with other clinical engineering departments.

Identifying obsolete systems
There are three primary types of obsolescence: technical, functional, and planned. Technical obsolescence, as mentioned above, occurs when a new technology supersedes the existing technology. One prime example is VHS or floppy disc recording media. This form of obsolescence can limit a technology’s performance within the healthcare environment.

Functional obsolescence happens when a technology has excessive downtime or can no longer be repaired due to parts or software incompatibility. This is a prime reason for replacing a technology. One key indicator is when repair costs start to approach a technology’s depreciated value. Even before a vendor declares a product line obsolete, a user may find it more cost-effective to replace rather than repair the system.

Planned obsolescence is dictated by the manufacturer. It is a business strategy used to increase sales. Technology, in general, has a planned life cycle. Vendors use planned obsolescence when a technology becomes either too costly to support or they intend to offer a new technology into an already saturated market.

The priority list of both planned and functionally obsolete technologies can be identified with the help of the equipment management system. Multiple data points within the software can be mined, such as useful life, service costs, historical downtime, vendor support, and equipment age. The methodology for combining these factors is based on the “Medical Equipment Replacement Score”. There are multiple published versions, but they are all based on a mathematical model that uses a quantitative approach. Each factor is ranked from 1 to 10, and technologies that have the highest numbers on the list are top priorities for replacement.

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