Buried in statistics for some 65,000 items, the medical equipment planning team for the new Northwestern Memorial medical center in Chicago is trying to squeeze out some $15 million in savings.
John Waters, director of medical equipment planning for Atlanta-based Heery International, was hired as a consultant in September 1994 to help manage Northwestern's inventory for the $580 million, 2 million-square-foot project.
The new medical center will include a 496-bed hospital and an ambulatory-care center, which will consolidate services currently offered at three different facilities. Clinical and office space for 400 member physicians and 200 affiliated doctors also will be provided.
On such projects, medical equipment planners, which operate independently or as divisions of larger architectural firms, perform a variety of services. They take inventories of existing equipment, plan for future needs, coordinate the purchase of new products, and relocate patients and equipment.
The task facing Waters is how to reconcile the medical equipment wish lists of the more than 80 medical departments involved in the move within the budget approved by executives. "The administrators want to keep the budget as low as possible, while the departments want as much as they can get," Waters said.
Heery got the opportunity to turn Northwestern's plans into reality through a competitive bidding process. Waters explained that Heery based its bid on an estimate of the length of the job and the number of people who would be involved.
The industry standard for a medical equipment planner's fee whose contract extends for the duration of a project is about 5% or 6% of the value of the new equipment, Waters said.
Heery came on board at the beginning of the procurement phase. It first subcontracted American Appraisal Associates, a Milwaukee-based accounting firm, to tag every significant piece of furniture and equipment in Northwestern's existing facilities.
Waters is now in the middle of sorting through a database of thousands of items to decide which ones can be reused and which should be replaced when Northwestern moves into its new digs.
"Northwestern is interested in how their budget will be affected," he said. "We're providing the information to Northwestern so they can make the decisions."
Waters estimated it would cost $300 million for Northwestern to start from scratch and purchase all new equipment. However, he said, about 75% of the existing equipment, or about $250 million worth, should be kept.
The catch is that while Northwestern has budgeted $60 million for new equipment, a total of $75 million to $80 million worth of new items has been requested by department heads.
Over the next couple of months, Waters said he hopes to reach a figure below $60 million by redistributing equipment among various departments and by identifying items that can be traded for new ones.
"We're anticipating that through the inventory reconciliation process we can get down to the target budget," he said. "We're making sure the design and accountant assumptions were correct, and we're trying to bring the costs down."
Meanwhile, another project in Downey, Calif., was wrapping up. Phoenix-based Facilities Development spent the past couple of weeks readying the new 150-bed patient tower on the Rancho Los Amigos Medical Center campus for opening day, Feb. 8.
As Ann Mowry-Hay, a program manager for Facilities Development, explained, a number of considerations have to be addressed once a hospital is ready to call in the moving vans.
"There can't be any downtime," she said. "But with healthcare costs as high as they are, you can save 30% to 40% by reusing equipment."
She said a smooth move can be accomplished by taking steps such as renting patient monitors and equipment for the operating room. Elective surgeries can be postponed and unoccupied beds can be moved to the new facility first. "You have to have contingency plans," she said. "At Rancho, the undercounter refrigerators weren't there, so we had to call Sears."