Lecture 5: Equipment Management/ Inventory Management

Lecture 5: Equipment Management/ Inventory Management

Outline Equipment Control Program Inventory Control
Significant Program Components Computerized Maintenance Management and Information Systems Standard Information Included in any Equipment Control Additional Data Element Required for Services Computerized Database Information Inventory Control Existing Equipment Departmental Interaction New Equipment Medical Equipment Management Maintenance Activities Administrative Considerations during Initial Inspection Maintenance Schedules

Equipment Control Program
Structure for the clinical utilization of equipment in the hospital to apply technical competence, management techniques and organizational skills to the control and application of technology

Components of Equipment Control Program

Needs Acquisition of instrumentation from small, portable electronic thermometers to massive, fixed, radiological systems Preventive maintenance and repair: average of 5-15% of equipment cost Technical support in management of technology: minimize costs and help allocate resources to real needs. Financial, quality and hazard control to assure health and safety of patients Applicable Code Requirements Such as food and drug requirements, electrical requirements and accreditation standards set by the government authorities

Definition System employed by the hospital to ensure efficient and effective procurement and utilization of medical devices and instrumentation Significant Program Components Policies and Procedures Interdepartmental relationships Integration with other clinical engineering functions Communications

Significant Program Components
Policies and Procedures Policy may be considered as a formal recognition of an institution-wide set of desired behavioral objectives Formalized the expectations of management in order to legally protect the institution and the employees Provide the patient assurance of safety and quality care Provides a framework for common communication and disciplinary action

measure effectiveness of the policies and procedures in terms of the number of occasions ion which they are correctly implemented, as compared to the number of occasions on which they are not Policies and procedures that are found to be ineffective should be rewritten or eliminated

Interdepartmental Relationships Equipment Control Program Objectives Control cost, quality and hazards Establishment of a focus for the management of technology in the hospital Equipment exists in every department, is often shared by departments and is also often mobile Necessary to know how equipment functions, how and where it is used and its typical modes of failure

Normal Flow of new Equipment
Using department Identify equipment requirements Select best available products Develop specifications Obtain bids Select Vendor Receive and inspect Document Label Deliver to using department Train users Approve payment Use clinically Preventive maintenance or repair Start Stop Review of records for management information Review of records for safety information Modification and Upgrading QA on vendor support

Integration with other clinical engineering Functions Success in equipment control program relies on the ability to utilize the personnel, functions and data relating to other clinical engineering responsibilities Materials generated in one aspect of the clinical engineering program will be of great importance to the other aspects of the program

Communication Must gather information then communicate data and recommendations in a clear and forthright manner Communication channels Written memoranda and reports Scheduled meetings with administrative personnel Committee meetings and frequent informal discussions with department heads, unit managers and special-care nursing staffs

Computerized Maintenance Management and Information Systems
Produce maintenance schedules and track inspection and work order requests Produce reports to determine personnel productivity, notify departments with higher than average equipment repair costs, identify repeat repairs on the same device, and document potential user errors or equipment abuse Provide documentation for malpractice suits involving medical equipment

Computerized Maintenance Management and Information Systems
Demonstrate to accreditation inspectors that equipment is being properly maintained Support repair-versus-replacement decisions with historical data Forecast equipment replacement requirements Determine if and where recalled devices are located in the hospital Determine charges to user departments and prepare operating budgets

Standard Information Included in any Equipment Control
Equipment control number Unique number identifying a specific equipment item; individual equipment modules may also be given specific control-number Manufacturer Name of the company that manufactured the equipment Model number An equipment type identifier assigned by the manufacturer and labelled on the equipment.

Serial Number An identifier assigned by the manufacturer for a specific piece of equipment Manufacturer code A unique code identifying the company that manufactured the equipment Device Code A code indicating the type or class of the device Device code description An industry-accepted standard nomenclature for the device

Vendor The name of the company that sold the device Vendor code A unique code indicating the company that sold the device Department code The department to which the equipment was assigned Location The building or room where the device is normally located

Contractor code The equipment contractor if the item is under a maintenance contract or warranty Risk code The relative risk to a patient in the event of equipment failure or misuse Purchase date The date the item is ordered Received date The date the item is received

Installation date The date the hospital accepted the equipment for use Warranty/contract expiration date The date the device is no longer under warranty or contract Purchase price The total amount paid for the device

Additional Data Element Required for Services
Work order number A unique number to identify a particular maintenance request Includes date and time of request Requestor The name and department of the individual placing the service request Requestor’s telephone number A phone number for contacting the requestor Service required A narrative description of the perceived problem or the service that is required

Service source The provider of the service Service response time/date The time and date that the technician responded to the work order Service complete time/date The time and date that the work order was completed Work order action code A code indicating the status or completion of the work order

Equipment status code A code that indicates if the device was still serviceable upon initiation of the work order Priority The relative urgency of the work order Service time The actual labor time expended Repair parts cost The total cost of repair parts used

Contract cost The labor/travel costs of contract maintenance Technician code A unique code identifying a specific technician

Computerized Database Information
With a computerized database, it provides unique opportunities for managing and documenting activities within a department. The following information can thus be obtained: Computation of downtime: can be expressed as service completed, time and date – work order opened, time and date. Estimated time the equipment is not available for patient treatment Average time to repair: total service time / total service calls, which can be broken down by device code to determine devices that exceed the expected repair times, by manufacturer to identify poor-quality products or by technician to determine the need for training.

Computerized Database Information
Response time: service response, time and date – work order opened, time and date. Customer satisfaction is directly linked to responsiveness of service Operator error / no defect actions: use work order actions: codes to identify problems. Repeat repair: historical data are used to identify repeat repairs. Excessive repeats can indicate that a technician may need training, operators may abuse the equipment, or equipment has become unreliable.

Inventory Control

Existing Equipment First step in the effort to manage the variety and number of instruments utilized is to identify: What they are Where they are Who is responsible for ownership Use of device Orderly method for recording information related to the instrument must be established for existing and future data retrieval, analysis and application to future decisions and solutions to problems

Existing Equipment Steps in the control of existing equipment
Initial inspection; (manufacturer, model number, serial number, and description of the equipment must be obtain) General safety inspection – identify malfunction, damaged or worn instruments Acquire or develop test utilized for incoming inspection or preventive maintenance and apply these to obtain baseline data for future performance testing

Existing Equipment Add control number (acquisition number/ or institutional property control number) and place a tag bearing this number on the equipment Obtain items such as warranty expiration date, purchase order number, acquisition cost, owner, manufacturer's address and equipment location

Existing Equipment Problems or difficulties that may be encountered
Some of the information to be gathered, might not exists May no longer be possible to obtain documentation on older equipment Difficulty in determining whether maintenance contracts exists Who provides maintenance coverage and at what cost

Existing Equipment Points to Remember
Gathering information on existing equipment is not only time consuming but also frustrating Vendor is not often the manufacturer but a local sales representative Each clinical department may be responsible for the purchase and maintenance of its own equipment so it is necessary to deal with each department in obtaining the needed information

Existing Equipment Be alert to nuances of user satisfaction and dissatisfaction with the instrumentation in performing inventory, identifying such causes as instrument condition, vendor support and training Identify sources of user satisfaction so that in-house effort can replace external vendor services without loss of confidence or credibility

Departmental Interaction
Anticipate concerns on the part of the client departments when expressing an interest in their equipment Keep in mind that the hospital departments have traditionally owned and been solely responsible for the instrumentation

New Equipment As data is obtained on existing equipment, hospital organization and personnel is known and been known to them it is advantageous to initiate procedures for purchase of new equipment

Medical Equipment Management

Maintenance Activities
Initial inspection / acceptance testing Scheduled maintenance services Repair services Equipment disposition

Medical Equipment Management
Initial Inspection/ Acceptance Testing Verify that all components, accessories, and options listed on the purchase request were received Verify the safety and performance features of the device prior to its initial use for patient care within the facility. Safety and performance should be verified against the manufacturer’s specifications Record initial performance and safety values, which can be used for comparison during future inspections if questions arise about the device performance Satisfy the requirements of the Joint Commission on Accreditation of Healthcare Organizations. As a part of their Plant, Technology and Safety Management (PTSM) standards, JCAHO requires documentation of equipment testing prior to initial use

Administrative Considerations during Initial Inspection
Ensuring that the hospital identification tag or unique control number is affixed to the equipment Starting the equipment data file (EDF). This file should include a copy of the original purchase order, the initial performance and safety values, and any warranty/guarantee data Filing the manufacturer’s service and operator manuals

Administrative Considerations during Initial Inspection
Entering information about the device into the computerized maintenance management system and determining the appropriate scheduled maintenance frequency Stocking appropriate accessories and user supplies, including replacement parts Setting up training programs for users

Maintenance Schedules
Inspections that are not frequent enough may adversely affect reliability, accuracy and safety. A device should be scheduled for periodic inspection, maintenance, or performance verification only if there is a good reason to provide such support

Reasons: Reducing risk of injury to patients, staff or visitors Minimizing equipment down time Avoiding excessive repair costs by providing maintenance at appropriate intervals Correcting minor operational problems before they result in major system failures or inaccurate results Complying with codes, standards, and regulations or the strict recommendations of equipment manufacturers

Although risk alone does not define the scheduled maintenance frequency, it is an important factor. High-risk devices are those life-support, therapeutic, and diagnostic devices whose failure or misuse is reasonably likely to cause injury to patient or staff or whose absence or failure could have an immediate or serious impact on patient care Medium-risk devices are those devices whose failure, misuse, or absence is not likely to cause serious injury to patients or staff but may have an impact on patient care Low-risk devices are those devices whose failure, misuse or absence is unlikely to result in injury to patient or staff and will have minimal impact on patient care

Simple scoring system can be established to determine whether scheduled maintenance should be performed and at what frequency. Three factors to be considered in order to arrive at an equipment management (EM) number Equipment function Physical risk Required maintenance

Equipment Function Categories Therapeutic – applies some form of energy to the patient and hence has the highest risk score Diagnostic Analytical Miscellaneous Physical Risk Considers what the possible consequences might be to the patient or operator if the equipment fails or malfunctions

Equipment Function categories and its associated risk scores

Physical risk scores associated with device malfunctions

Maintenance requirements and associated scores

Equipment Maintenance Numbers Computed for Included and Non-included Devices

Maintenance Checklist: Universal Inspection Form

Devices Usually Undergoes Walkthrough Inspection

EM number computation example of a Ventilator
Equipment Function Score: 10 Physical Risk Score: 5 Required Maintenance Score: 5 Total EM Score: 20 ONLY those items with an EM number of 12 or greater are included in the equipment control program.

Required Maintenance Equipment that is predominantly mechanical, pneumatic, or fluidic usually requires the most extensive maintenance Ex. Ventilators, intra-aortic balloon pumps and hemodialysis machines Devices requiring only performance verification and safety testing are classified as average maintenance level Ex. Physiological monitors and infusion pumps Devices that require only a visual inspection are assigned a minimal maintenance level Ex. Water baths, light sources and otoscopes

Scheduled Maintenance Services
Preventive Maintenance Periodic procedure to minimize the risk of failure and to ensure continued proper operation. (ECRI, 1990) Includes cleaning, lubricating, adjusting, and replacing certain parts but exclude operational maintenance normally carried out by the user Functional Testing, Performance Verification and Calibration (AHA,1988) To verify that the equipment is fully operational and performing within reasonable, previously specified limits Safety Inspection Leakage current and ground integrity should be tested in accordance with NFPA 99, Standard for Health Care Facilities. A visual Inspection for mechanical safety should also be conducted to ensure both the patient and operator are safe from possible harm

Repair Services The bread and the butter of every clinical engineering program Repair can be defined as trouble shooting to isolate the cause of device malfunction and then replacement or adjustment of components or subsystems to restore normal function, safety, performance, and reliability (ECRI, 1990) Repair Services are offered by manufacturers, shared-service organizations, third-party service organizations, and in-house departments, with the extent of the repairs varying from circuit board exchange to component-level repairs (Betts,1987)

Repair Services Requests for repair services
Identify the device requiring the repair, usually by use of the hospital identification number or equipment control number Provide as much information as possible regarding the problem Identify the operator of the device at the time of malfunction Give the time and date of malfunction Provide the equipment location, the department, a point of contact, and a phone number

Types of Maintenance Services
In-house Equipment Services Advantages: Immediate availability of service technicians to troubleshoot and repair equipment, Facilitation of other aspects of equipment operation and provision of prompt, ongoing support for clinical personnel Disadvantage: relative costs associated with operating an in-house clinical engineering service

Manufacturer Service Services offered Full-function service contract Includes all labor-related costs and may include all or certain parts-related costs Demand service agreement in which the hospital pays on a time-and-materials basis for each service call, as needed A combination of the two basic methods Disadvantages Cost may be greater Response time is dependent on the location of the manufacturer’s service center Technician experience and qualifications may be suspect if subcontractors or dealers are used Clinical engineers must closely monitor the contractors to ensure acceptable performance and to ensure that the terms of the contract are met

Third-Party Services Services from a third-party organizations Disadvantages: Requires at least as much as management oversight as does manufacturer service May be particularly difficult in fulfilling the hospital’s needs for support functions beyond narrowly defined equipment repair, and it may be at a serious disadvantage, especially for servicing high-tech equipment, if the manufacturer is unwilling to provide needed parts and diagnostic equipment

Cost Analysis for In-House Services
One way to determine costs is to set a price or value on services provided to users Establishing the price of services Determine actual hourly labor costs Evaluate cost-volume-profit relationships Establish pricing options and service contract rates

Hourly Labor Costs Represents the total effective hourly cost of doing business and becomes the hourly labor rate at which the department’s services are billed Reasons of use It permits direct comparisons between the costs of the clinical engineering department and those of the equipment manufacturers, other clinical engineering departments, or third-party service providers It represents the single best aggregate measure of overall department efficiency by acknowledging all department costs and the effects of staff productivity It becomes a useful measure of clinical-engineering management effectiveness It serves as the basis for all service cost estimates or contracts

Hourly Labor Costs Hourly Labor Rate
Variable costs (direct, incremental or marginal) Costs that are assumed to vary with production volume or service output Cost that would not exist if there were no labor force Examples: Salary and wages of the active service staff Employee benefits Continuing education expenses Office supplies and forms Liability insurance costs All variable telephone charges Repair parts and service supplies Other costs that would vary with department workload: travel and fuel costs.

Hourly Labor Costs Hourly Labor Rate Fixed costs (overhead or burden)
Costs that do not fluctuate with the level of activity Examples: Effective cost of hospital floor space and associated utilities Capital depreciation Fixed telephone charges Administrative and clerical labor costs Repair parts inventory carrying costs Chargeable hours Maximum number of labor hours the department can realistically expect to charge, or bill out, in the fiscal year

Hourly Labor Costs Total Chargeable Hours Number of employees
Combined number of full- and part-time staff whose time will be charged out Available Labor Hrs. / Employee Only regular and overtime hours Does not include sick time, breaks, vacations and holidays Productivity Number of chargeable hours divided by the number of available work hours for a given fiscal period Throughout the service industry: the range is from 75-80%

Repair Parts Management
Required to prevent overstocking or accumulation of rarely needed or unusable repair parts Repair parts maintained should be classified as bench stock

Parts and Quantities to be Placed in Bench Stock
Critical nature of equipment If the hospital can function safely without the equipment for a short period of time, minimize or eliminate bench stock levels for repair parts Cost of downtime If the item is out of service, will patient appointments be cancelled and hospital revenue significantly affected? The loss of revenue may be more than the cost of maintaining repair parts in inventory

Number of units on hand The greater the number of units on hand, the greater the probability that repair parts will be required and should be in bench stock. However in some cases, the urgency of repair may be lessened since there may be sufficient items for exchange. Consumption rate If the repair part is being used on recurring basis , it should be considered for inclusion in bench stock

Lead time If the time from when the repair part is ordered until it is received is excessive, some should be kept in stock Cost of repair parts Three factors that determine the overall cost of repair part Monetary value of the part Administrative cost of processing the purchase order Minimum order level of vendor When ordering low-cost items, it is reasonable to stock a one-year supply since it is less costly than ordering the item several times during the year

Shelf life Low levels should be kept on items that deteriorate while in storage to ensure that they are used before they deteriorate Age of equipment As equipment gets older, breakdowns normally increase, resulting in greater demand for repair parts. Increasing bench stock to meet these demands can result in large money losses if new equipment is purchased

Objective of Initial Inspection and Acceptance Testing
Verify that all components, accessories, and options listed on the purchase request were received

Mini-Case

Mini-Case: get a host hospital and do the following:
Get the equipment control program by identifying these details: Fundamental objectives Policies and Procedures; Create a flow diagram Interdepartmental relationships Integration with other clinical engineering functions Communications Computerized Maintenance Management and Information Systems Standard information included in the equipment control program

Based on the identified information: make an analysis by identifying specific problems and weakness in the hospital’s current equipment control program. Make recommendations as well. Based on the gathered information on Computerized Maintenance Management and Information Systems: evaluate how efficient is the computerized system; how accurate and fast it generates the report; get the users feedback. Explain how the equipment control/management program may be integrated with other clinical management activities

Inventory control program Know the fundamental objectives of their equipment Identify the steps in the control of existing equipment. Analyze the process and significant components of their equipment management and inventory control program: Enumerate the problems or difficulties that may be encountered, made recommendations on how to solve these problems or difficulties

Inventory control program Gather and explain possible resistances from other departments when gathering information for an equipment control file

Medical Equipment Management Identify the process or steps in the hospital’s maintenance schedules Identify the important factors being considered in the medical equipment management Find out if there are risk scores being employed by the hospital. Determine how they assign risk scores and analyze the process.

Medical Equipment Management Know how do they compute cost and basis for their costing in their equipment management program Common problems being experienced in medical equipment management program.

Reference Bronzino, J.D. (Ed.). (1992). Management of medical technology: a primer for clinical engineers. Boston: Butterworth-Heinemann Webster, J.G. & Cook, A.M. (Ed.). (1979). Clinical engineering: principles and practices. Englewood Cliffs, N.J..: Prentice-Hall, Inc.

Lecture 5: Equipment Management/ Inventory Management

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