VHES Presentation: Equipment Replacement Planning Raymond Forsell, CCE, PE, CHFM November 6, 2015
Clinical Engineering Outcomes 1. T o improve the quality of health care available to patients. 2. T o foster the successful use of health care technology. 3. T o reduce risk to patients, staff, visitors, and the facility. 4. T o contain and reduce costs associated with technology.
Health Care Without T echnology? Imagine trying to deliver quality 1 st world health care without the building systems and medical equipment which is used today. Loss of a system due to gross failure greatly jeopardizes organizational mission. Our facilities are a machine made up of standalone and interconnected systems and devices.
Replacement Planning Path TSP began offering replacement recommendations for medical equipment in late 1980s. The Equip Replacement Plan (ERP) report is one of the most requested engineering products that we offer. There is significant transference between the Facilities and Medical Equipment models.
Replacement Planning Path: Observations Equipment does not last forever Organizations do not adequately plan (fund) for routine replacement Competition for limited capital requires better justification of replacement Life cycle is surprisingly predictable based on the device type and use High technology reduces service life Emergency replacements cost more
Presentation Objectives Explain the TSP Med Equip Replacement process as applied to medical equipment Make connections from Medical to Facilities equipment Discuss the Capital Planning approaches which may improve effectiveness Discuss standardized approaches for justifying Facilities equipment replacement
Equipment Replacement Planning Vermonters use things up! Typical for hospitals to use devices past the point when they can be repaired. Costs of service can become very high as devices age. TSP has data from 42 years of service to aid in planning for the best time to replace devices. Too late: high costs; poor reliability; unsafe; unavailable; poor negotiation leverage. Too early: device not depreciated, poor cost containment; staff learning curve
Equipment Replacement Planning (ERP) Annual report produced Provided to primary contact + Multi-year projections of useful life of devices Flexible Can be produced at any time of the year Data used to assess the utility of mid-year repairs.
TSP Assessment Parameters Device Type Make/Model Age Purchase Cost Total Service Costs End of Production Date End of Support Date Risk Score Regulatory or Technological Obsolescence
TSP Recommendations Clear Identification of the Device ◦ Make and Model ◦ Control and Serial number ◦ Facility and Department Status of Device ◦ Age & Useful Life ◦ Production Status ◦ Support Status ◦ Obsolescence
TSP Recommendations ◦ Replacement Recommendation Year for Action Priority (High, Normal, Low) Action (Replace, Replace Capital, Track, Contingency) (future) Estimated Replacement Cost ◦ Reports typically cover 3 to 5 budget years ◦ Intended to arrive Jan-Feb of each year
Algorithm Age * 2 Risk * 3 Support *3 Cost * 1 Critical >=30 High >=20 Normal >=10 Low < 10
TSP Recommendations ◦ Key Guidelines 125% of estimated life 40% total cumulative service/purchase cost End of Manufacturers Support and Dwindling Alternate Parts Technological, Medical Obsolescence Regulatory Prohibition
Ideally Medical Equipment replacement would be distributed equally over an 8 to 12+ year period depending on life cycle For the normalized small hospital inventory (1500 devices, $ 10,000 avg price per device = $ 1.5M per year
Improvements Needed Better justification (persuasive) Replacement cost estimation Failure rate modeling over life of devices Modeling of how device reliability impacts clinical and organizational mission Integration with departmental budget planning and capital budget review process in many sites
Examples Full Data Report Report to Customer Reliability Curve
The Weibull Curve (Bathtub)
Regions of Device Life: 1 Region 1: Early Failure ◦ Defect in design ◦ Poor materials ◦ Poor manufacturing Prevention ◦ Burn in period ◦ Environmental Stress Testing ◦ Commissioning
Regions of Device Life: 2 Region 2: Service Life ◦ Random Failures ◦ Maintenance Based Failures ◦ Limitations of Design ◦ Operating Beyond Design Prevention ◦ Predictive Maintenance ◦ Use within Design
Regions of Device Life: 3 Region 3: Wear Out Period ◦ Increasing Failures ◦ Fatigue Evidenced ◦ Obsolescence (components or design) ◦ Systemic Failures Prevention (not really) ◦ Increased Preventive Maintenance ◦ Workarounds
The Weibull Curve (Bathtub)
Facilities Equipment Similar to that of medical equipment More mechanical in nature Similar Levels of T echnology (computers, electronics) Very transferable theories for replacement planning of both Building based systems may be more expensive and difficult to maintain/replace
We Must… Compile data for systems and components relative to life cycle (Use your CMMS) Document status of systems and publish life cycle projections on systems and major components Link systems to key values of the organization
Key Justifications Clinical Impact ◦ Necessity to specific patient care and safety Financial Impact ◦ Support of income stream functions Community Impact ◦ Market Share, Community Support Regulatory Impact ◦ Specific links to FDA, CMS, TJC, USP….OSHA, EPA
Establish Champions Clinical (MDs…) Organizational Leadership Long term knowledge of the needs Involve them with ongoing information as time ticks on Use photos and videos for justification Show change or degradation
Facilities Systems Illumination Electrical Power (Normal) Electrical Power (Emergency) Security / Observation Access Control Fire Alarm Fire Suppression Security Alarm
Facilities Systems Elevators Domestic Water Waste Water Waste Disposal Steam Chilled Water Heating Ventilation and AC Medical Gas
Facilities Systems Communications Building Operating Components (Doors, etc) Building Control System The Buildings (Structure, Envelope, Roof, Finish…)
Organize Facilities equipment within one of the systems just described Define its useful life and place in Weibull curve Use Key Justifications for each system to help to build your case for planned replacement
Exercise #1 T eams of T wo (Name your team) Take 1 or 2 cards with system names at top. For each: ◦ List major component devices in system ◦ What is your estimated service life of each? ◦ What are the ways they fail? ◦ What data can you collect on failures? ◦ When is end of life obvious? Round table presentations
Prep for Capital Cycle Enter data into CMMS Model life cycles for all systems and key components (reliability, finance) Extract data multiple times per year Present as part of facilities management reporting Justify using your facility’s capital budgeting process
Story Building Ideas System and Function Year installed Estimated Life Key Justifications that affect organization What happens if the device fails (minor and major) Cost of replacement Payback Period
Story Building Ideas T otal Service Costs Rate of Failure (esp if increasing) Cost per failure Lost Revenue per failure Delayed patient care per failure Alternatives Effect if not funded in request year Budgetary quote for replacement
Story Building Ideas Savings from replacement (energy…) Service cost savings Operating cost savings Regulatory factors Request or complaints by physicians or departments Renovations and project costs How the technology has changed
Discussion: Your Capital System Timing Format Submissions Review Competition Approval Pitfalls
During Capital Budgeting Process Use Key Factors in justifying requests Use story building skills Prepare to compromise (indicate consequences) Utilize Champions Plan for multi-year progress Care in prioritizing requests Be persistent
Exercise # 2 2 to 3 T eams T eam picks one system and piece of equipment to evaluate Ray will provide some initial conditions Discuss and present your case for capital replacement
T ools Your FM staff The CMMS system and its data Life Cycle modeling assistance Benchmarks and manufacturer data Clinical and leadership champions Persuasive, objective justification
Train Managers for Successful Equipment Acquisition Don’t shop hungry Don’t walk home alone Get comparative data Don’t Rush Justify. Justify. Justify Plan for Installation, Training, Service, Life Cycle Don’t be a hoarder
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