Call for action on ‘wasteful’ procurement

Healthcare organisations are facing an enormous wave of technology challenges on the horizon, for which they are currently unprepared, and many will be inundated with large volumes of inappropriate technology. One of the problems is that the way in which we have historically purchased medical equipment is flawed – resulting in wasted resources and compromised patient care. Furthermore, there are now system-wide changes occurring in healthcare delivery and technology that will exacerbate this problem – prompting a need to re-evaluate the way in which we approach healthcare procurement.

How do we buy technology?

Hospitals are filled with thousands of medical devices, but how did this equipment actually arrive at our hospitals? The process for many hospitals resembles the following: physicians heading departments tell administrators what tools (equipment) they need to do their job, in the form of “wish lists”; administrators then combine all of the various wish lists into one definitive “hospital wish list” and proceed to ask for funding to fulfill these wishes. The total budget provided usually falls short of what was requested, resulting in many wishes remaining unfulfilled. While one would assume that this would result in a situation where there is a shortage of technology, the reality is that there is a glut of it. Unfortunately, this is not a glut of equipment that is needed – instead, hospitals end up owning a large volume of equipment that was not required in the first place. It is important to point out that, during this process, each department will be acting independently of the others, while the equipment on their wish list will be focused on, and dedicated to, their department. Furthermore, this equipment will not be shared or integrated with any other department’s technology. Hospital administrators rely on these physician wish lists, as they understand little about the technology that is being requested and depend on the perceived professional expertise of the medical staff to make equipment selection decisions. They assume that these physicians are keeping abreast of what is currently available in the market, and what will soon be available. Unfortunately, this is a flawed assumption. Our research shows that this reactive model has resulted in hospitals having more technology than they actually need, operating at a higher total cost of ownership per unit. Often this technology is under-utilised, does not fit the needs of the organisation, performs poorly and, at times, compromises patient care. The situation is worse in areas that have a high number of expatriate physicians and department heads that come from different countries, who were trained on and familiar with differing types of technologies. This is a reactive, department-driven, short-term focused, silo purchasing model, and it is both wasteful and risky.