Conflict of Interest Ronald Loo, M.D. Has no real or apparent - PowerPoint PPT Presentation

$ 8.6M in CapEx Savings: A Case Study on Sharing Medical Equipment Session 23, February 12 th , 2019 Ronald Loo, M.D., Physician Co-Lead, Health Innovation Team, Kaiser Permanente Todd Rothenhaus, M.D., Chief Executive Officer, Cohealo 1

Conflict of Interest Ronald Loo, M.D. Has no real or apparent conflicts of interest to report. 2

Conflict of Interest Todd Rothenhaus, M.D. Has no real or apparent conflicts of interest to report. 3

Introductions Ronald Loo, M.D. Todd Rothenhaus, M.D. Physician Co-Lead, Health Chief Executive Officer Innovation Team Cohealo, Inc. Kaiser Permanente, SCPMG 4

Introducing the sharing economy to healthcare • Learning objectives • The imperative to share • Equipment sharing at Kaiser Permanente • Overcoming objections to equipment sharing • The return on investment from sharing 5

Learning Objectives • Discuss the supply chain challenges that Kaiser Permanente faced around equipment management, budgeting and access and how they were inspired by companies like Uber and Airbnb to solve those challenges by sharing medical equipment between facilities • Identify the internal resources needed for a health system to implement an equipment sharing pilot, including the criteria for selecting the service lines, equipment and facilities for participation • Analyze the ROI model developed by Kaiser Permanente and Cohealo on the value of sharing equipment, including how financial outcomes such as rental reduction and capital expense avoidance from sharing/collective purchasing can be factored into calculations 6

The growing sharing economy In the past decade, the sharing economy has exploded: Share your car Share your home Share your office Airbnb WeWork Uber 7

A massive imperative to share Reimbursement Surgical is decreasing, procedures but fixed costs moving outside remain the hospital 8

A massive imperative to share Reimbursement Surgical is decreasing, procedures but fixed costs moving outside remain the hospital Hospitals must improve utilization of space, equipment, and personnel 9

Mobilizing idle equipment improves operating margin

About Kaiser Permanente (KP) SoCal • 15 hospitals • 231 medical offices • 7,421 physicians • 70 years of innovation 12

Why equipment sharing at KP? Value for the Facility Value for the OR • More efficient than renting • KP as good steward of members’ funds • More requests than budget • Improve asset utilization • Newest equipment = happy surgeons • Data-driven investments • Non-payroll savings • Expand service lines independent of inventory • Not rentable? Maybe location shareable 13

The path to “Dark Green Money” Savings or revenue that is immediately quantifiable $ $$ $$$ Prevent Sharing Collaborative equipment- instead of purchases related case renting or delays buying 14

It all began with “Loo Haul” Started with a Shockwave Lithotripsy Machine – a $450K purchase shared between 5 hospitals Program Goals  Prove sharing is feasible  Reframe equipment as network resource  Eliminate rentals  Net payback – 1 year 15

Grassroots innovation to scaled pilot program 5 5 Urology Urology Facilities Facilities 1 1 Service Service Lines Lines 16

Scaled pilot program to a sharing ecosystem Head & Neck Head & Neck General Surgery General Surgery Orthopedics Orthopedics 9 9 Urology Urology Facilities Facilities 4 4 Service Service Lines Lines 17

Growing the sharing ecosystem across KP SoCal Head & Neck Head & Neck General Surgery General Surgery Orthopedics Orthopedics 9 9 Urology Urology Facilities Facilities Gynecology Gynecology 9 9 Ophthalmology Ophthalmology Plastics Plastics Service Service Podiatry Podiatry Lines Lines Vascular Vascular 18

Year 1 KP Exchange results Growth Efficiency Scaling Savings $4.2M 2/3 9 49% Facilities & Decrease Identified Identified service lines in rental volume capital requests network savings for sharing 19

Overcoming resistance to sharing “Sharing will be a lot of work.” “Patient will be negatively impacted.” “Equipment won’t be available when “I might have to cancel a case.” I need it.” “Equipment won’t be returned to “What if equipment is damaged?” my operating room.” “Will my equipment be constantly moving?” 20

Basic human values at work Trust Willingness to Share 21

Sharing requires minimal work KP leveraged automation to make sharing easy. Phase I: “Loo Phase II: Phase III: Haul” Milk Route On-demand 22

How sharing works Scheduling platform Equipment analytics Moving Logistics Adopted by KP biomed and OR directors 23

20% of equipment = 80% of value $90K Expensive Maximum value Cases covered equipment with minimal per move moves 24

Proper planning reduces risk Risk Factors Plan for Success • Insurance of $1M+ • Damaged equipment • Movability risk analysis • Sharing highly risky assets • Identify non-sharable assets • Efficiently tracking & returning equipment • Systematic moving process KP’s Outcomes Outcomes  In 3 years, only two damages  Repair costs covered  No cases cancelled or delayed 25

The KP Exchange today 22 $11M Facilities $4.4M 24% 4,875 9% $4.2M Equipment in platform 91% 76% 18% 91% 10 82% Service lines 2017 2018 2019 Requests (%) Requests Met by Sharing (%) 26 Identified Savings

Collaborative purchases $1M invested with 3-5X in returns AcuPulse Duo VersaPulse 100W EuroNav 27

The next frontier of savings Specialty bed management Radiology equipment 28

Continued areas for growth New equipment ASCs, Medical Office types & Buildings, etc. service lines New care New venues regions 29

Questions? Ronald Loo, M.D. Todd Rothenhaus, M.D. ronald.k.loo@kp.org todd.rothenhaus@cohealo.com cohealo.com kaiserpermanente.org @cohealo @kpshare 30