It is estimated that in the U.S. alone 15 million flexible endoscope procedures are performed annually. Flexible endoscopes are expensive capital investments for a hospital and the service and maintenance agreements are equally as costly on an annual basis.
When was the last time you visually inspected your current flexible scope inventory and matched these scopes to your service and maintenance agreement? If you haven’t performed this audit and analysis in the last 12 months, you may have an opportunity to achieve immediate cost savings by closely looking at your inventory and assessing the repair dollars you are spending.
Recently, a hospital system conducted an independent equipment audit for their system’s flexible scope inventory. The bottom line results achieved over $215,000 in the current service and maintenance costs.
Prepping for the Inventory
Just as prepping for an endoscopy procedure, what you do prior to the event will lead to a successful case. Obtaining a complete flexible scope inventory including information such as model number, serial number, purchase date and total cost of consumption for repairs is the important first step. Additionally, it is essential to obtain a copy of the original service agreements and all subsequent addendums to the agreement to ensure that the baseline data is complete and accurate.
Visually confirming your on-site inventory to your master service agreement will provide you an assessment of how well the service agreement is being utilized, maintained and updated. It was here that an independent audit team identified flexible scopes in the following categories: with high utilization, out for repair frequently, scarcely used, unable to be located (“missing”) and those no longer owned by the organization but still being billed annually on the service agreement. Four unique examples include (1) a scope that one department considered lost had actually moved to another department and (2) scopes that were traded in for newer model scopes were still listed on the service agreement. (3) Most costly, were the scopes that were on site and used on a regular basis yet not covered under a service agreement. If not for this flexible scope inventory and service assessment, these costly “out of pocket” repair costs would continue to go unrecognized as “not on contract”, and as a result, costing the facility over $100,000 in additional expense. (4) Lastly, flexible scopes repair management was problematic. The tracking of scopes that were out for repair and what inventory was in-service on a daily basis was creating challenges for the department and as a result causing unnecessary repair expenses. Best practice is maintaining an organized and standardized “out for repair log” ensuring the tracking of a scope as it leaves and returns to the facility with an accountable point of contact to manage the process.
Recovery
Working with the flexible scope service agreement vendor will take some time. Validating the accuracy of the scope inventory by department, that the scopes out for repair are returned and back in-service and identifying scopes no longer in use is an intensive and continuous process. Also, caution needs to be taken when removing a potentially missing scope from the service agreement. The independent audit team worked in collaboration with both the end users and the service provider to assure all decisions were accurate and based on historical repair data—no guessing or estimating.
Reviewing scope purchase dates and repair consumption can be beneficial in addition to providing the data needed to justify the ROI to purchase or budget for new capital equipment. If you have an older scope that is not being utilized – remove it from the agreement. If there are older scopes being utilized with a high repair history, consider replacing it with a newer scope.
Scheduling Follow-up Appointments
Whether your inventory inspection is performed monthly, semi-annually or annually the process should be outsourced to an experienced strategic advisor who can perform a comprehensive assessment of your flexible scopes. This will ensure an accurate inventory is matched to the right service and maintenance agreement. No overspending on service agreements or overspending on repairs which are not on contract.
David Dean the Chief Administrative Officer at VIE Healthcare has been assisting hospitals and the US. Army’s logistics for the last 16 years.
