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4 Key Takeaways From A Recent Hospital Procurement Study

By CME Corp Staff | June 13, 2014

Medical procurement can be a complex, multifaceted endeavor with many options and factors to consider.  One area to think about is delivery: you need to know where your products will be sent and how they will be setup and installed once they are received at your building.

In order to get the best sense of how your hospital or medical facility should handle this aspect of procurement, consider the results from a recent direct-to-site delivery study conducted by CME (formerly Hospital Associates) that involved an IDN medical clinic with multiple specialties in California.

This study examines the costs of a direct-to-site equipment delivery in the five areas of Warehouse Handling, Storage Fees, Deployment, Assembly and Installation, and Trash Disposal.  It then compares these costs to what the cost would be if the client had either subcontracted the work or handled it in-house.  Based on the study, your facility would be well advised to take into account these tangible cost considerations as well as the added intangible costs of your procurements.  These will also allow you to more easily manage the logistics of medical procurement.

Here is a summary and four key takeaways from that study:

1. How Will Your Equipment Be Stored And Received

This concern is especially important for facilities that plan on ordering on a large-scale.  According to the study that was published, the average cost of receiving a pallet or carton and staging it for deployment is $6 per unit.  The cost of storing a pallet without direct-to-site delivery was estimated to be around $15 per pallet per month.  Make sure that you consider the quantity of equipment that you will be buying so that you will know how to account for storage and receiving costs.

2. Equipment Delivery And Workflow

There is not only the cost of the equipment purchase, storage and delivery to be considered, but also the costs resulting from interruption of workflow and patient care to be considered.  This is where the direct-to-site delivery program really shines even though these are represented as intangible costs. 

3. Equipment Installation And Setup

Medical equipment often involves a lengthy process where it needs to be brought to a specific location and then configured. The cost of the assembly process was projected at $35 per hour, while the cost of delivering the product was estimated to be $2,280 per delivery.  Also, you need to ensure that you have assistance from a well-qualified installation or assembly company that has done a plentiful amount of medical work in the past.  If you are not going to be contracting the work out, you must be able to spare the manpower to assemble and configure the equipment.

4. Trash Disposal

You might not think about it at first, but getting rid of trash leftover after your procurement is an important concern.  Not only will there be boxes and packing materials left over, you also have to consider the products you will be removing or changing to install new equipment.  This particular study estimated the disposal fee at $125 per delivery.  Your cost may vary depending on how much trash you need to remove or how many products you are getting rid of.

Medical procurement can cost more than just the price of the items and the shipping charge.  There are several other factors to think about and consider when you analyze the costs involved with buying and installing new equipment.  Be sure to keep these four elements of medical procurement in mind so that you can keep your costs under control whenever you need to replace your current equipment or add new pieces to your hospital, practice or facility.

About CME: CME Corp is the nation’s premier source for healthcare equipment, turnkey logistics, and biomedical services, representing 2 million+ products from more than 2,000 manufacturers.

With two corporate offices and 35+ service centers, our mission is to help healthcare facilities nationwide reduce the cost of the equipment they purchase, make their equipment specification, delivery, installation, and maintenance processes more efficient, and help them seamlessly launch, renovate and expand on schedule.

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