Healthcare companies depend on a host of well-maintained systems and equipment to manage business operations and deliver an optimal standard of care for patients. Enter healthcare asset management. As the operational function that tracks, maintains, and manages medical assets, it helps ensure that healthcare providers have the right equipment available when and where they need it—without breaking the bank in the process. This guide breaks down the core components of healthcare asset management, the common challenges involved, and the benefits of investing in asset management processes and technology.
What Is Healthcare Asset Management?
From the $300,000 CT scanner to the run-of-the-mill blood pressure cuff, healthcare asset management tracks the location and disposition of key medical equipment. Of course, patient-facing equipment is just the tip of the iceberg for assets under the care of healthcare organizations. Healthcare asset management also keeps track of all of the items necessary for keeping facilities up and running. This includes computer equipment and IT infrastructure, paper-based patient documents, furniture, and cleaning supplies. Even medical waste could be considered an asset to be appropriately tracked and disposed of.
Asset management helps healthcare companies keep tabs on aging equipment, order maintenance when necessary, arrange logistics to move items between departments or facilities, and coordinate asset replacement when equipment outlives its lifespan. Ultimately, healthcare asset management is tasked with getting the most out of assets with as little capital and operational expenditure as possible.
Key Takeaways
- Healthcare asset management is an important supporting function for healthcare operations.
- Healthcare assets include medical equipment, furniture, buildings, and consumable medical supply inventory.
- Asset managers at healthcare organizations need to track and document the details of each asset owned or rented by their business.
- Asset tracking includes maintaining records concerning asset location and maintenance history, ideally in real time.
- Asset management helps healthcare facilities manage costs and maintain compliance, while improving patient outcomes.
Healthcare Asset Management Explained
Ultimately, asset management allows healthcare companies to balance patient care with the bottom line. Asset managers ensure that their organizations avoid over-purchasing or unnecessarily stockpiling assets and that they keep up with preventive maintenance to avoid expensive emergency repairs, reducing the downtime of key machinery. They manage inventory to make sure assets are where they need to be as business and patient needs arise, and they work with procurement and business stakeholders to preemptively replace aging items that are contributing to rising maintenance costs. Additionally, asset managers can help healthcare businesses keep total cost of ownership at the forefront when making purchasing decisions. According to one recent study, roughly 61% of healthcare asset management professionals reported that their strategy improves their organization’s resilience and preparation when faced with unexpected events.
When done right, asset management helps healthcare companies manage costs and boost operational efficiency through disciplined recordkeeping, proactive maintenance, and optimized use of asset inventory. Much of the strategy revolves around the principles of asset life cycle management, which breaks down asset management activities into five cyclical stages: planning, acquisition, utilization, maintenance, and disposal. The trick, of course, is being able to orchestrate the management of potentially tens of thousands of assets, all in different stages of the life cycle, and all serving different purposes for the organization.
To that end, establishing visibility into the asset portfolio is foundational to healthcare asset management. The most effective programs categorize assets by business function, while also monitoring the estimated value and age of each asset, estimated replacement cost, physical location, asset custodian, usage, and current operational status. Some assets use Internet of Things (IoT) sensors that monitor variables in real time, such as system temperatures or average RPMs in a motor, which can alert asset managers to early indicators of potential failures or the need for preventive maintenance.
Most healthcare organizations rely on healthcare asset management software to help them appropriately log and monitor individual assets and classes of assets. Maintaining the accuracy of these records is important, both for financial recordkeeping and compliance purposes. Furthermore, healthcare companies often integrate asset management software into broader enterprise resource planning (ERP) systems to improve operational efficiency, decision-making, and financial and inventory management.
How Does a Healthcare Asset Management System Work?
A healthcare asset management system is a comprehensive solution designed to track, manage, and optimize medical equipment and other assets within a healthcare facility. The system begins by creating a detailed inventory of all assets, including medical devices, IT equipment, and facility infrastructure. Each asset is assigned a unique identifier, often using barcodes or RFID tags. This allows for easy tracking and identification throughout the asset’s life cycle. The system then collects and stores crucial information about each asset, such as its location, maintenance history, warranty information, and compliance status.
As assets move through the healthcare facility, the system continuously updates their status and location. This is often achieved through mobile scanning devices or fixed RFID readers at key points in the facility. The system also manages maintenance schedules, automatically generating work orders for routine maintenance or repairs. It tracks the usage of equipment, helping to optimize utilization and inform decisions about new purchases or the reallocation of underused assets. Additionally, the system monitors compliance with regulatory requirements, ensuring that all equipment meets necessary standards and that proper documentation is maintained. By providing real-time visibility into the status, location, and condition of assets, the system enables healthcare providers to improve operational efficiency, manage costs, enhance patient care, and maintain regulatory compliance.
Additionally, much of the data aggregated in healthcare asset management systems is enhanced through artificial intelligence and analytical capabilities that can quickly identify patterns or issues with assets and sometimes trigger automatic actions that could bolster operations and save money. For example, predictive maintenance analytics that schedules preventive tasks based on data like asset performance, IoT sensor information, and system age can help healthcare companies lengthen the lifespan of assets and save significant capital expense over time.
Why Is Asset Management Important in Healthcare?
Whether it’s to help hospitals hold on to their assets or to keep regulators from charging expensive fines for failing to properly track movement of controlled substances in pharmacies, asset management stands as a vital component of healthcare operations. According to a recent survey of healthcare asset managers, the top five drivers behind their work are to improve:
- Management of aging assets
- Savings in maintenance costs
- Assurance of compliance
- Equipment uptime
- Operational efficiency
While keen asset management is critical for financial discipline within healthcare organizations to ensure that money isn’t wasted on redundant or underutilized assets, it’s equally important for driving positive patient outcomes. Capable healthcare asset management teams put systems into place that make sure busy clinicians can easily locate and use operable equipment whenever it might be needed.
What Is a Healthcare Asset?
Healthcare assets run the gamut from everyday furniture to highly specialized clinical assets, like medical equipment and pharmaceutical inventory. Asset managers at healthcare companies are called upon to track and maintain fixed assets, while also managing the consumable inventories necessary for keeping both the nonclinical and clinical operations of their business running with minimal expense and disruption.
7 Types of Healthcare Assets
From bedpans to computers, healthcare assets fall into a range of operational categories. The following are some of the most common types of assets that healthcare organizations must track, maintain, and optimize.
- Medical equipment: Medical equipment comprises digital devices, such as X-ray or EKG machines, and low-tech apparatus, like stretchers and wheelchairs. This category includes some of the most specialized, fragile, and expensive assets in a healthcare business’s portfolio. And ready availability of these assets—in good operating order—is crucial for keeping patients alive and healthy. As such, preventive maintenance is a huge focus for managing this type of asset.
- IT systems: With so much healthcare equipment and documentation going digital these days, IT assets play an outsized role in keeping operations smoothly running. IT assets in healthcare environments include traditional servers, computers, and mobile devices, as well as the networking infrastructure, such as routers and switches, that’s necessary to keep everything connected. Additionally, IT systems include a growing contingent of IoT devices that do everything from monitoring foot traffic to tracking hand hygiene in healthcare facilities. In fact, studies show that 64% of healthcare organizations today have more IoT devices on their networks than computers.
- Facilities and infrastructure: Crucial fixed assets, like hospital facilities and building infrastructure, make up an important part of the healthcare asset portfolio. Asset managers track and manage not just the real estate and infrastructure that their organization owns, but also the assets that it leases. Careful documentation and contract management of these leased assets can help healthcare organizations understand the full range of their available resources and keep a lid on recurring costs.
- Furniture and fixtures: Healthcare companies depend on all kinds of specialty and ordinary furniture to keep clinics, nursing stations, and back offices functional. This category includes waiting-room chairs and the desks and cabinets that staff use at check-in stations; it also covers hospital beds, bedside screens, and washbasin stands. Asset managers must carefully manage all of these items to make sure they’re available, functional, safe, and sanitary.
- Medical consumables inventory: Even the smallest clinic goes through its fair share of consumable inventory, including bandages, thermometer probe covers, and latex gloves. Large hospitals, meanwhile, ratchet up the scale and scope of items that are in constant need of replenishment—everything from IV bags to suture kits. Unsurprisingly, then, healthcare asset management depends on strong inventory management practices. Asset managers need to ensure that clinical teams never run out of life-saving consumables, while also avoiding overstocking very expensive items.
- Pharmaceuticals: One consumable asset class specific to healthcare that demands a high degree of asset management rigor is pharmaceuticals. The various drugs and compounds used by pharmacists to fill prescriptions are expensive, highly regulated, and perishable. This category requires meticulous documentation and process controls to ensure compliance, as well as careful inventory management to prevent overbuying and waste. Speaking of waste, asset managers must pay particular attention to how pharmaceuticals are disposed of, as this stage in the asset life cycle is also highly regulated.
- Transportation: Ambulances and other vehicles used for patient transport fall into this asset category; so do utility carts, facility trucks, and other nonclinical transportation assets. This is another category that frequently includes assets that are leased or otherwise on loan to an organization. Preventative maintenance is crucial here to keep these assets reliably operational and to lengthen their service life.
What Is Healthcare Asset Tracking?
Healthcare asset tracking is the process of inventorying assets and documenting information about their condition and operational status. The most basic healthcare asset tracking will create an inventory listing basic details for each asset, such as purchase date, depreciation, departmental assignments, and asset custodian. More sophisticated tracking will log ongoing activities related to an asset to create a detailed history that covers maintenance activities, check-ins/check-outs, and the physical location of any item at any given time through the use of barcode systems and/or location tracking technology like GPS and RFID.
Benefits of Effective Healthcare Asset Management
Effective asset management bolsters healthcare operations on many fronts. In a nutshell, understanding the whereabouts and maintenance status of important resources helps streamline workflows and makes it possible for companies to reach smarter financial decisions. Here are some of the most common benefits afforded by healthcare asset management, along with theoretical business scenarios of how these benefits commonly play out in the healthcare industry.
- Cost savings and budget optimization: Visibility and control over how and when assets are used can reap big cost savings and optimize budgets over the long run. For example, without effective asset management, a hospital system that’s experiencing shortages in available gurneys within some facilities may make the mistake of leasing or purchasing more, even though the system as a whole has a surplus. Asset tracking would show the company how to redistribute gurneys so they’re maximizing use of what it already owns.
- Improved operational efficiency: Asset management helps operational teams cut down on time wasted finding and retrieving equipment, unplanned downtime, and delays due to stockouts of consumable supplies. When asset managers use real-time monitoring of asset location or inventory levels, employees are always going to have what they need to do their jobs in the moment. For example, a hospital can use asset management software that keeps track of the location and status of surgical tools in real time to reduce delays between procedures caused by missing tools or equipment. This would increase surgical room turnaround time and, consequently, the number of surgeries the hospital can perform each day.
- Minimized downtime and errors: A well-recorded asset history, particularly pertaining to maintenance, can prevent unplanned downtime and disruptions of care. For example, an MRI machine prone to breakdowns and in need of emergency maintenance can disrupt diagnostic operations and require considerable patient rescheduling and delays. With tools like predictive analytics and alerting, asset managers can stay on top of predictive maintenance to cut down on outages and keep everything on schedule.
- Reduced theft: Hospitals lose tens of thousands to millions of dollars in stolen assets each year, as criminal rings and unscrupulous employees rip off these facilities’ valuable assets. Often, the most expensive equipment and medicine can fit easily in pockets or backpacks. Some widely cited industry statistics estimate that between 10% and 20% of a hospital’s mobile assets is lost or stolen during the assets’ useful life. Meticulous asset tracking, GPS location tagging, and other controls that monitor expensive and portable items can act as strong deterrents to theft and help trace items if they go missing.
- Optimized asset utilization: Healthcare asset management helps hospitals raise the usage rates of their resources. For example, it can help identify when common equipment, such as crash carts, needs to be redistributed among different floors based on actual usage. Healthcare asset management can also provide scheduling visibility into big-ticket diagnostic equipment so that these machines don’t stand idle for long periods of time. Similarly, for healthcare systems with multiple facilities, managing assets effectively can help arrange redeployment of equipment to facilities that need it most, thereby minimizing the amount of rental equipment needed to meet surges in demand.
- Robust compliance management: Numerous regulatory bodies require rigorous upkeep and sanitation of clinical assets, as well as meticulous documentation of when and how these assets are used and disposed of. Healthcare asset management is specifically tuned to keep up with these compliance demands. For example, a detailed asset history of medical devices provides all the evidence regulators may need during an audit, including notations about purchase dates, maintenance history, and decommissioning. Similarly, healthcare asset management systems can track and initiate maintenance and calibration of devices like ventilators and diagnostic machines in accordance with regulatory schedules.
- Data-driven decision-making: Detailed tracking of healthcare asset history can lay the foundation for data-driven decision-making that results in better daily operational choices and long-term strategic planning. For example, usage data on diagnostic equipment across the organization could help executives realize that an expensive capital investment in new X-ray machines for one of its biggest departments may not actually be needed; instead, a timely transfer of underused machines from several adjoining departments would suffice, without incurring additional expense. In another example, as financial analysts forecast maintenance budgets for the coming year, historical maintenance data can reveal past repair costs, the frequency of preventive maintenance, and failure rates.
- Extended asset lifespan: Modern asset management’s focus on preventive maintenance helps healthcare organizations prolong the useful life of expensive assets, allowing them to maximize their initial capital investments. Additionally, the wealth of information regarding asset history—including depreciation, ongoing maintenance costs, and failure rates—can help an organization understand exactly when it would make financial sense to invest in new equipment. Drilling down further, asset data can pinpoint when mounting maintenance costs and downtime of aging equipment will outstrip the savings derived by deferring a purchase.
- Increased staff productivity: Research from the Healthcare Information and Management Systems Society shows that nurses waste up to an hour per shift searching for medical equipment. In fact, the study shows that the cumulative impact of this inefficiency costs the U.S. healthcare industry $14 billion in lost productivity each year. Asset managers that perform asset tracking through real-time location systems can help healthcare professionals cut down on hide-and-seek missions so they can focus on more productive tasks.
- Enhanced patient care: Clinicians that get their hands on working equipment when they need it are more equipped to deliver top-notch patient care. This is true both in emergency situations and for ongoing care. For example, using real-time location tracking on defibrillator devices in a hospital can shave seconds to minutes off response time, resulting in improved outcomes. Meanwhile, hospitals experiencing long wait times between surgeries, due to unavailability of anesthesia apparatus or sterilized surgical equipment, could minimize delays by streamlining the scheduling and sterilization process through proactive asset management.
- Sustained patient safety: Medical devices and diagnostic equipment require significant amounts of tuning and sterilization to operate safely. Without rigorous checks and management of these assets, patient safety could suffer. Asset management makes sure infusion pumps provide proper dosing, verifies that hospital beds are maintained, and guarantees that sterilization routines meet the highest safety standards. Additionally, asset management monitors facility maintenance to keep buildings and infrastructure safe for patients and staff alike.
Challenges and Solutions in Healthcare Asset Management
Asset management, when implemented carefully and thoughtfully, can go a long way toward solving some of the biggest healthcare operational challenges. The most common challenges include:
- Budget constraints: Rising costs for labor, drugs, and supplies, combined with underpayment for health services, are placing many healthcare organizations under significant budgetary constraints. Strategic asset management can help companies relieve some of the pressure by extending asset lifespans and better managing costs.
- Aging equipment: Hospitals and clinics faced with inflation and stagnant budgets need to find ways to keep their aging equipment running safely and in compliance with regulatory requirements. Asset management helps to coordinate preventive maintenance and tuning, which keep equipment running with minimal disruption, with backup plans established for those times when emergency downtime strikes key assets.
- Asset tracking: Dealing with lost and stolen assets—from medical supplies to expensive devices—is an ongoing battle for healthcare facilities. When an organization has tens of thousands of assets, the scope of tracking can quickly overwhelm even the best operational teams. Asset management puts systems in place to make it easier to scale tracking efforts and conduct audits to make sure systems are working.
- Staff training: Functional asset management often requires cooperation from the entire staff. For example, doctors and nurses need to appropriately scan equipment to check it in or out of the asset management system, and building maintenance staff must log their activities too. Asset management teams must ensure that staff is appropriately trained in workflows and procedures to keep documentation and management on track.
- Technology integration: The most effective asset management implementations integrate information about asset history with other enterprise data and analytics to help improve operational efficiency. This means contextualizing inventories with other data streams. For example, financial insights gleaned through ERP integration could help decision-makers plan maintenance budgets and capital investments. Arming maintenance staff with data from IoT sensors could help them detect signs of imminent failure, then trigger maintenance that could keep equipment from breaking down.
6 Key Components of Healthcare Asset Management
Mature healthcare asset management programs are composed of a number of key practices and technology components. Each piece adds another dimension of documentation, analysis, and control to deliver the maximum benefit from an organization’s asset portfolio. Here are some of the most crucial components of healthcare asset management.
1. Asset Life Cycle Management
Each healthcare asset follows a distinct life cycle, from initial purchase through decommissioning and disposal. Asset life cycle management optimizes practices during all five stages: planning, acquisition, utilization, maintenance, and disposal. In the earliest stages, asset life cycle management helps define objectives for asset acquisition and procurement processes. During utilization and maintenance, this process tracks usage patterns and coordinates preventive maintenance. At the end of the process, asset life cycle management ensures that equipment is disposed of in a compliant manner, even potentially recovering value through resale or recycling.
2. Asset Tracking and Inventory Management
Without meticulous asset tracking and inventory management capabilities, a healthcare asset management system is dead in the water. Organizations need the documentation and visibility of asset and inventory tracking to meet compliance requirements and to feed more advanced analytics capabilities that will drive decisions about maintenance, procurement, and redistribution of underused assets. Additionally, inventory management is essential for keeping consumable stock replenished without overbuying.
3. Maintenance and Repair Management
One of the most important functions of asset management in the healthcare industry is to direct maintenance and repairs of medical equipment and essential infrastructure to keep services running smoothly. Asset managers keep track of maintenance history and, through proactive analysis and the help of predictive maintenance algorithms, guide maintenance schedules to increase the lifespan of assets and meet regulatory standards.
4. Asset Valuation and Depreciation
Recording accurate valuation of assets, such as medical equipment, furniture, and IT infrastructure, is central to healthcare asset management as it supports the business’s financial reporting, acquisitions, divestitures, and more. Additionally, keeping track of equipment depreciation can help a healthcare organization with tax planning and appropriately budgeting for maintenance and asset replacement.
5. Compliance and Regulatory Adherence
One of the unique functions of asset management within the healthcare industry is to keep track of all the regulatory factors that must be accounted for across the asset life cycle. Asset management teams have to be prepared to ensure that maintenance and procurement follow strict healthcare regulations for equipment and infrastructure. And they need scrupulous equipment records and asset histories to prove to regulatory auditors that this work is being done.
6. Technology and Data Analytics
Healthcare organizations deal with assets that can number well into the tens of thousands. The only way to deal with that scale of tracking is through smart use of technology and data analytics. Real-time tracking and monitoring of assets provides data to feed algorithms that analyze usage patterns and facilitate regulatory compliance. In the meantime, cloud-based systems provide centralized data storage and improved accessibility, enabling more efficient inventory management, maintenance scheduling, and compliance monitoring across multiple locations.
Stay Ahead in Healthcare With NetSuite
Strong execution of healthcare asset management takes the right balance of technical investment and process improvements. NetSuite can help healthcare organizations with both. Tuned to the needs of the healthcare industry, NetSuite’s comprehensive cloud-based business management suite gives companies the required visibility into assets to proactively manage inventory, cost management, and compliance reporting.
NetSuite also integrates financial reporting with maintenance activities and inventory management, documenting all the activity related to individual assets. Additionally, the solution’s analytical capabilities provide asset managers with the insights they need to forecast maintenance budgets and plan for capital investments when new or replacement assets are needed.
For complex healthcare organizations that manage vast troves of medical assets, healthcare asset management is a nonnegotiable function. These companies need solid asset management to help them optimize operational efficiency, control costs, and ensure patient safety. Through the use of robust tracking systems and preventive maintenance scheduling, healthcare organizations can maximize the lifespan and usage of their most valuable assets. And as they document these activities, they generate artifacts to prove compliance and fuel data-driven decisions for financial sustainability.
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Healthcare Asset Management FAQs
What are fixed assets in a hospital?
Fixed assets in a hospital are long-term tangible assets, such as medical equipment, diagnostic machines, furniture, vehicles, and buildings.
Is medical equipment an asset?
Yes, medical equipment is one type of healthcare asset. This can include everything from expensive equipment, like MRI machines, to small-ticket items, like surgical clamps.
What are examples of health assets?
Healthcare assets run the gamut. Some examples are sterilization equipment, ambulances, hospital beds, medications, and filing cabinets.