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

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$8.6M in CapEx Savings: A Case Study on

Sharing Medical Equipment

Session 23, February 12th, 2019 Ronald Loo, M.D., Physician Co-Lead, Health Innovation Team, Kaiser Permanente Todd Rothenhaus, M.D., Chief Executive Officer, Cohealo

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

Conflict of Interest

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

Conflict of Interest

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Introductions

Ronald Loo, M.D.

Physician Co-Lead, Health Innovation Team Kaiser Permanente, SCPMG

Todd Rothenhaus, M.D.

Chief Executive Officer Cohealo, Inc.

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• Learning objectives
• The imperative to share
• Equipment sharing at Kaiser Permanente
• Overcoming objections to equipment sharing
• The return on investment from sharing

Introducing the sharing economy to healthcare

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• 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
• n 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

Learning Objectives

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The growing sharing economy

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

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A massive imperative to share

Surgical procedures moving outside the hospital Reimbursement is decreasing, but fixed costs remain

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A massive imperative to share

Surgical procedures moving outside the hospital Reimbursement is decreasing, but fixed costs remain

Hospitals must improve utilization of space, equipment, and personnel

Mobilizing idle equipment improves

• perating margin

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About Kaiser Permanente (KP) SoCal

• 15 hospitals
• 231 medical
• ffices
• 7,421 physicians
• 70 years of

innovation

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Why equipment sharing at KP?

Value for the Facility

• KP as good steward of

members’ funds

• Improve asset utilization
• Data-driven investments
• Expand service lines

independent of inventory location

Value for the OR

• More efficient than renting
• More requests than budget
• Newest equipment =

happy surgeons

• Non-payroll savings
• Not rentable? Maybe

shareable

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The path to “Dark Green Money”

Savings or revenue that is immediately quantifiable

$ $$ $$$

Sharing instead of renting or buying Collaborative purchases Prevent equipment- related case delays

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It all began with “Loo Haul”

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

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Grassroots innovation to scaled pilot program 5

Facilities

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Facilities

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Service Lines

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Service Lines Urology Urology

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Facilities

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Facilities

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Service Lines

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Service Lines Head & Neck General Surgery Orthopedics Head & Neck General Surgery Orthopedics

Scaled pilot program to a sharing ecosystem

Urology Urology

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Facilities

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Facilities

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Service Lines

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Service Lines Gynecology Ophthalmology Plastics Podiatry Vascular Gynecology Ophthalmology Plastics Podiatry Vascular

Growing the sharing ecosystem across KP SoCal

Head & Neck General Surgery Orthopedics Head & Neck General Surgery Orthopedics Urology Urology

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Year 1 KP Exchange results

Facilities & service lines Decrease in rental volume Identified network savings

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Scaling Efficiency Savings Growth

9 49% $4.2M

Identified capital requests for sharing

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Overcoming resistance to sharing

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

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Basic human values at work Trust Willingness to Share

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KP leveraged automation to make sharing easy.

Sharing requires minimal work

Phase I: “Loo Haul” Phase II: Milk Route Phase III: On-demand

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How sharing works

Scheduling platform

Adopted by KP biomed and OR directors

Equipment analytics Moving Logistics

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20% of equipment = 80% of value

Maximum value with minimal moves Cases covered per move Expensive equipment

$90K

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Proper planning reduces risk

• Insurance of $1M+
• Movability risk analysis
• Identify non-sharable assets
• Systematic moving process

Risk Factors Plan for Success

• Damaged equipment
• Sharing highly risky assets
• Efficiently tracking & returning

equipment

Outcomes

 In 3 years, only two damages  Repair costs covered  No cases cancelled or delayed

KP’s Outcomes

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2017 2018 2019 Requests (%) Requests Met by Sharing (%)

24% 76% 91% 82%

The KP Exchange today

Identified Savings

$11M 9% 18%

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Facilities

4,875

Equipment in platform

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Service lines

$4.4M $4.2M 91%

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Collaborative purchases

AcuPulse Duo VersaPulse 100W

$1M invested with 3-5X in returns

EuroNav

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The next frontier of savings

Specialty bed management Radiology equipment

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Continued areas for growth

New regions New care venues New equipment types & service lines

ASCs, Medical Office Buildings, etc.

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Questions?

Ronald Loo, M.D.

ronald.k.loo@kp.org

Todd Rothenhaus, M.D.

todd.rothenhaus@cohealo.com

kaiserpermanente.org @kpshare cohealo.com @cohealo