Presenting New Technology to Administrators

1. Presenting New Technology to Administrators Edward S. Sternick, Ph.D., M.B.A.

2. Dragon Boat Management –A Tale of Two Cities

3. What Is New Technology? • A new acquisition or expansion of an ongoing clinical program that requires an addition to existing staff, supplies, purchased services and capital equipment with an annualized cost of at least $100,000

4. Looking to the Future • The biology revolution is rapidly translating scientific discoveries and new technologies into improved patient care • An integration of genomics, proteomics and bioinformatics with new imaging modalities and novel radiotherapy delivery systems will support the rapid growth of comprehensive Image-Guided Radiotherapy (IGRT)

5. What the Medical Physicist Must Learn! • Radiation Oncology Physics • Imaging Physics • Nuclear Medicine Physics • Medical Health Physics • Information Systems Technology Management

6. How to Prepare for the Presentation • Form • Assess • Review • Create • Research • Institute • Evaluate • Set Up Technology Management

7. Technology Management • FormMultidisciplinary Team • AssessNeeds • ReviewEquipment Options • Create Model Specifications • ResearchVendor Alternatives • InstituteAcceptance Test Protocols • Evaluate Operations & Maintenance • SetUpQuality Program Structure

8. Form Multidisciplinary Team • Include medical physicist, administrator, appropriate clinician(s) • Responsible for weighing relative costs vs. benefits of alternatives • Minimizes unproductive adversarial relationships Technology Management

9. Assess Needs • What is present and projected caseload volume? • Why is current equipment inadequate? • What replacement equipment will benefit patients? Why? Technology Management

10. Review Equipment Options • Required capital available for installation, operation, maintenance and upgrading? • How much disruption during installation? • Sufficient space and access? • Environmental controls required? • Additional staff training or FTEs needed? Technology Management

11. Review Equipment Options (Cont.) • Vendor comparisons • Upgrade conditions? • Can lower cost system be acquired and later upgraded? • Warranty coverage? • Parts and service availability? • Downtime penalties? • User Group? Technology Management

12. Create Model Specifications • Written specifications contractually define level of performance required from equipment • Work with vendor on preparation • Specifications should accompany purchase order and be referenced as a condition of sale Technology Management

13. Research Vendor Alternatives • Product line, cost and “intangibles” important • Use life cycle costing analysis • Initial price • Installation and renovation costs • Training expense • Recurring supply costs • Preventive maintenance expense • Repair costs • Life expectancy Technology Management

14. Institute Acceptance Test Protocols • Procedures described in specifications attached to purchase order • Written protocols and data sheets form basis of acceptance or rejection Technology Management

15. Evaluate Operations & Maintenance • Document protocols • Accurate record-keeping of operational failures or service interruptions • Service considerations • Vendor-provided • Local service organization • In-house engineering • Combinations Technology Management

16. Set Up Quality Program Structure • Provides foundation on which clinically effective and safe procedures are built • Ensures that measured results are within acceptable limits or that necessary repairs and adjustments have been made • Requires documentation and ongoing revision Technology Management

17. New Technology Presentation- The Process • Become the program champion • Develop the business concept • Write the business plan • Defend the business plan ACMP

18. 1. Become the Program Champion • Review what has been done or is being done to identify the new equipment need • Identify gaps and areas to achieve desired outcome • Provide input and ideas • Write business plan • “Project manage” the process

19. 2. Develop the Business Concept “Define the value proposition that specifies the business rationale for the new technology acquisition” = Administrator-Speak for: Show me what you got!

20. Administrative Criteria Screens • Fit with Hospital strategic plan? • Market attractiveness? • Financial return and risk? • Operational feasibility?

21. 3. Write the Business Plan • Specify fit with Hospital Strategic Plan • Analyze market attractiveness and competitive implications • Seek help from hospital financial analyst to develop financial statements and clarify reimbursement issues • Identify risks • Define business goals/milestones to be reported

22. 4. Defend the Business Plan • Review reasonableness of market and financial assumptions • Show likelihood of achieving desired results • Demonstrate ability to fund the new technology – Income (P&L) Statement • Multi-year projections

23. Income (P&L) Statement - Revenue Gross Patient Service Revenue Less: Contractuals, Provision for Doubtful Accounts,Free Care, Other = Net Patient Service Revenue + Other Operating Revenue = Net Operating Revenue

24. Income (P&L) Statement - Expenses • Operating Expenses • Salaries and Fringe Benefits • Purchased Services • Supplies and Other Expenses • Depreciation • Interest • Pension • Community Initiative Contribution

25. Financial Yardsticks • Net Income • Net Operating Revenue – Operating Expenses • Internal Rate of Return • Interest rate equivalent to dollar returns expected from project. Can compare to rates hospital could earn by investing money in other projects.

26. “Not everything that can be counted counts and not everything that counts can be counted”