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Acquiring capital equipment through shared-risk agreements.

C Louie1

  • 1University of California, San Francisco, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|October 4, 1997
PubMed
Summary

A shared-risk agreement for infusion therapy management at UCSF improved pump utilization and reduced costs. This innovative vendor partnership offset capital expenses by avoiding significant interest payments.

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Area of Science:

  • Healthcare Management
  • Medical Technology
  • Health Economics

Background:

  • The University of California, San Francisco (UCSF) faced challenges with an aging infusion pump inventory.
  • Managing the costs associated with infusion therapy equipment is a critical operational concern for healthcare institutions.

Purpose of the Study:

  • To evaluate the effectiveness of a shared-risk vendor agreement for managing infusion therapy costs.
  • To assess the impact of upgrading infusion pump technology on operational efficiency and financial outcomes.

Main Methods:

  • A 60-month agreement was established with a vendor for infusion pump replacement and comprehensive management.
  • UCSF agreed to a fixed payment rate based on admissions, with reassessment clauses for pump utilization.
  • The agreement included the provision of 750 new infusion pumps, software upgrades, warranty, and maintenance services.

Main Results:

  • UCSF experienced a reduction in the number of required infusion pumps and associated consumables (infusion sets).
  • Operating expenses saw a slight increase, which was outweighed by the avoidance of substantial interest charges (7-10%) from potential capital borrowing.
  • The partnership facilitated appropriate utilization of infusion pumps, optimizing resource allocation.

Conclusions:

  • Shared-risk vendor agreements can be a viable strategy for healthcare facilities to manage capital expenditures and operational costs for medical equipment.
  • This model demonstrates that strategic partnerships can lead to improved efficiency and significant financial savings in infusion therapy management.
  • The UCSF experience highlights the benefits of vendor collaboration in technology upgrades and equipment lifecycle management.

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