In the face of mounting financial pressure on hospitals, capital planning for imaging and laboratory services has become more crucial than ever. Making informed decisions about major capital acquisitions and fully utilizing equipment is essential for maintaining financial stability and sustaining high-quality patient care.
ECG embarked on a comprehensive research initiative to determine how organizations make capital decisions. By conducting in-depth interviews with key stakeholders—including C-suite executives and service line leaders (imaging and lab) from large-, medium-, and small-scale community hospitals and integrated delivery networks—we sought to create a checklist for effective capital planning decision-making.
Findings
Our engagement revealed that organizations and vendors cannot afford to view capital planning as a one-time transactional process. Instead, forging strategic partnerships creates long-term success through optimizing operations, improving margins, and enhancing the quality of care.
To foster robust and enduring partnerships, organizations must embrace transparency when communicating their overarching strategic and operational priorities to vendors. This open exchange of information serves as a cornerstone for establishing mutual understanding and aligning objectives.
Developing a capital planning framework can help ensure negotiations and relationship building move forward effectively. Adhering to the five key principles below will inform capital planning decision-making and help promote lasting, productive partnerships between hospitals and vendors.
Identify essential, nonnegotiable vendor offerings.
To ensure a thriving and enduring partnership, encompass these pivotal elements within any offering.
- Efficient installation and support
- Seamless integration of equipment and services with downstream core platforms
- Equipment that consistently meets testing an d service requirements
- Reliable ongoing maintenance and technical support
Determine additional vendor value offerings.
These elements can undoubtedly enhance the value proposition. But it’s important to note that they alone do not hold the power to make or break a partnership.
- Provision of on-site personnel to support platform integration/installation, staff training, optimization of equipment features, and workflow efficiencies
- Inclusion of dedicated, trained staff to operate equipment and address staffing constraints
- Enhanced automation to enable less staffing demand without compromising quality standards
- Financial transparency tools for accurate assessment of financial performance
- “At risk” models for achieving service standards and costs (e.g., at-risk reagent contract model)
- Advisory support for operational assessment and performance transformation
- Trial periods for software and option packages to create a price negotiation strategy
Execute the elements of strategic capital planning.
When engaging in strategic capital planning, incorporate key elements that facilitate the development of a well-structured approach.
- Define the scope.
- Engage key stakeholders.
- Build a prioritization model.
- Utilize successful RFP elements.
- Conduct comparative analysis across vendors.
- Prioritize value-adds and negotiations.
- Consider vendor relationships.
Ask the right questions.
By addressing the following questions, organizations and vendors can cultivate a transparent understanding of each other’s needs and objectives.
- Are we planning for traditional department-level equipment only, or will we incorporate equipment on a system level?
- Should we look for a single vendor solution for enhanced standardization and negotiating strategy versus a more “best of breed” approach?
- Does the strategy account for the impact and demands of system-wide and programmatic clinical and strategic plans?
- Have we assessed the local and regional market dynamics?
- Have we considered and reviewed imaging industry trend data (nationally, regionally, and locally)?
- Do we have recent and/or do we require any additional third-party assessments of our equipment inventory?
- Should we consider delaying any acquisitions to allow for enhanced technology, system consolidations, and/or potential price decreases?
- Who are the key stakeholders to actively involve with planning efforts?
Remember the keys to success.
Capital planning is a multistep process that requires consistent effort to move forward effectively.
- Start capital planning early.
- Align incentives and goals.
- Involve the right stakeholders.
- Establish clear criteria and plans.
- Establish a baseline.
- Account for total cost of ownership.
- Be open to hearing from all vendors and products.
- Prepare for negotiations.
- Continue proactive review and planning.
- Seek value-adds.
- Think strategically.
Organizations must prioritize meeting checklist items and establishing a framework for successful vendor partnerships and decision-making during the capital planning process. This is crucial for the long-term success of the organization. The ultimate objective is to optimize decision-making and resource allocation and forge long-lasting partnerships that ensure financial stability and deliver high-quality patient care.
Organizations contemplating capital planning should seek an external consulting partner with experience in enterprise strategy, performance transformation, and managed care, along with an understanding of the unique demands of imaging services.
Edited by: Matt Maslin
Published August 2, 2023
