As the impact of healthcare reform on the U.S. delivery system comes into focus, there is little doubt that it is a “game changer” for clinical engineering and biomedical equipment technology. Carol will describe and discuss the future of the CE and BMET professions under new regulations and a new payment system. She will address why medical devices will cost much more, why equipment must have longer life cycles, why CEs and BMETs will and must have more involvement in IT-related activities, how CEs’ and BMETs’ responsibilities in regulatory compliance will expand and how you can prepare for this new environment. About Carol Davis-Smith, CCE Career Summary Carol Davis-Smith is a Director in Premier’s Consulting Solution Division with responsibility for the development and deployment of capital lifecycle management processes and tools to Premier staff and owners. Education and Affiliations Ms. Davis-Smith received a B.S. in bioengineering technology from the University of Dayton and an M.S. in engineering from the University of Arizona. She is a certified clinical engineer and a member of the Association for the Advancement of Medical Instrumentation (AAMI). Over the past 20 years, she has presented and published papers on a variety of clinical engineering and capital contracting topics. In 2009, Ms. Davis-Smith received the AAMI Clinical Engineering Achievement Award.

1. Healthcare Reform
and
What It Will Mean for Clinical Engineering
Carol E. Davis-Smith, CCE
Director, Premier Performance Partners
The Premier healthcare alliance
Intermountain Clinical Instrumentation Society
Salt Lake City, UT
November 3, 2011

2. “Unsustainable trends tend not to be sustained”
~ Herbert Stein
Economist & Presidential Advisor
STATE OF
HEALTHCARE
1

3. National Health Expenditures per Capita
National Health Expenditures per Capita and Their Share
$9,000
of Gross Domestic Product, 1960-2009
$8,086
$7,845
$8,000 $7,561
$7,198
$6,827
$7,000 $6,458
$6,098
$6,000 $5,682
$5,240
$ In Billions
$4,878
$5,000
$4,000
$2,853
$3,000
$2,000
$1,110
$1,000 $356
$147
$-
1960 1970 1980 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
NHE as Share of GDP
5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://w w w .cms.hhs.gov/NationalHealthExpendData/
(see Historical; NHE summary including share of GDP, CY 1960-2009; file nhegdp09.zip).
2

4. United States to Other Country Comparison
Health Expenditures Per Capita and Life Expectancy
Data submitted to the Organisation for Economic Co-operation and Development
U.S. ranks highest in cost per capita, at nearly 2.5 times the average, and ranks 20th in life
expectancy, 1.2 years lower than the average.
Total Health Expenditures Per Capita and Years Life Expectancy, 2008
$8,000 84
U.S.= $7,538
Life Expectancy (yrs)
$7,000 82
USD Purchasing Power Parity
Years Life Expectancy
$6,000 80
$5,000 78
$4,000 76
OECD= $3,010
$3,000 74
$2,000 72
$1,000 70
$0 68
Source: Organisation for Economic Co-operation and Development (OECD) Statistics
3

5. Additional Multinational Comparison
June 2010
a study by the
Commonwealth Fund
United States ranks last
Safe Care
Efficiency
Access
Equity
Healthy Lives
Costs
Source: The Commonwealth Fund, June, 2010
4

6. Healthcare Spending Concentration
Concentration of Health Care Spending in the
U.S. Population, 2007 97.0%
Nearly 50%
100% of U.S. health care spending
Percent of Total Health Care Spending
90% is concentrated in
81.2%
80% 74.6%
5% of the population
70% 65.2%
60%
50%
49.5%
97%
40% of U.S. healthcare spending is
30% concentrated in
22.9%
20% 50% of the population
10% 3.0%
0%
Top 1% Top 5% Top 10% Top 15% Top 20% Top 50% Bottom 50%
(≥$44,482) (≥$15,806) (≥$8,716) (≥$5,798) (≥$4,064) (≥$786) (<$786)
Percent of Population, Ranked by Health Care Spending
Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized population, including those without any health care
spending. Health care spending is total payments from all sources (including direct payments from individuals, private insurance, Medicare, Medicaid, and miscellaneous other sources) to
hospitals, physicians, other providers (including dental care), and pharmacies; health insurance premiums are not included.
Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey
(MEPS), 2007.
5

7. The Uninsured
Average Percent Uninsured by State, 2008 – 2009
US Average, 2009 = 16.7%
RI 12.1%
DE 12.2%
DC 11.2%
< 10.0%
10.0% - 14.9%
15.0% - 19.9%
20.0%
Source: Kaiser statehealthfacts.org - Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on the Census Bureau's March
2009 and 2010 Current Population Survey (CPS: Annual Social and Economic Supplements).
6

8. Healthcare Reform
Are we confused yet?
How „bout now?
7

9. Healthcare Reform
Patient Protection and Affordable Care Act
Public Law No: 111-148 – Patient Protection and Affordable Care Act
8

10. Payment Cuts
• Approximately $148 billion in
Medicare reimbursement cuts over
10 years.
• Market basket update reductions
and productivity adjustments begin
in FY2012.
• Medicare and Medicaid DSH cuts
begin in FY2014.
• Independent Payment Advisory
Board to recommend cost
reductions starting in 2020
9

11. Aligning Payment with Outcomes
• Value-based purchasing (VBP) to tie 1% of Medicare
reimbursement to performance on quality and outcomes
measures (scales to 2% in 2017); AMI, heart failure,
pneumonia, SCIP, patient satisfaction.
• Readmissions policy to cut up to 3% of all inpatient
Medicare reimbursement based on excess readmissions
(cuts payments by $7.1 billion over 10 years). Initially AMI,
CHF, PN; expands to COPD, CABG, PTCA and other
vascular in 2015
• Reduced Medicare payments by 1% for hospitals in the
highest quartile of hospital-acquired infections starting in
2015 (cuts payments by $1.5 billion over 10 years). HAIs,
CL-BSI, Cdiff, MRSA, CA-UTI, VAP, SSI
10

12. Delivery System Reforms
• Accountable Care Organizations (ACOs)
– Department of Health and Human Services (HHS) to
establish shared savings program that promotes
accountability and encourages high quality and
efficient service delivery
– Program must be in place by Jan 1, 2012
– Risk for a population’s health
– CMS may give preference to ACOs already
contracting with the private market
• Bundled Payments
– Acute care, physicians, post-acute
– Voluntary Medicare pilot bundled no later than 2013
– Episode of care: 3 days prior to admission and 30
days following patient discharge for 10 conditions
11

13. Healthcare Reform
Patient Protection and Affordable Care Act Timeline
12

14. The Pillars of Success in the Era of Reform
Address the Transforming
Align With Optimize
Value the System
Physicians Revenue
Equation of Care
Clinical Integration Reduce variability &
Clinical Excellence via employment & resource
virtual models consumption Revenue cycle
Medical Staff Reduce
Service Excellence
Education readmissions
Service portfolio
Physician lead PI
Operational
teams to address Lower LOS
Effectiveness
VBP
At the lowest cost Pricing strategy
EMR Implementation Care continuum
position
Accountability for Care
Move from transaction- Become “accountable” for
Coordinate episodes of
oriented to outcome- outcomes and costs for a
care and providers
oriented population
13

15. Accountable Care Organizations
CMS proposed rule – March 31, 2011
What is an ACO?
Accountable Care Organizations (ACOs), while still evolving, are expected to
connect groups of providers who are willing and capable of accepting
accountability for the total cost and quality of care for a defined population.
-- Premier healthcare alliance
“A group of providers and suppliers of
services (e.g. hospitals, physicians and
others involved in patient care) that will
Payer Partners work together to coordinate care for the
► Insurers Medicare fee-for-service beneficiaries
they serve.”
► CMS
-- CMS proposed rule definition
► Employers
14

16. Complete view of accountable care AC Leadership addresses the
strategic leadership and
operational infrastructure
necessary to support a successful
High Value Network delivers AC that is organized around Triple
ACO CEO
provider networks that will Aim goals.
optimize care delivery within and
across the continuum and COO CFO CMO CNO CQO
ensure that care is coordinated.
Health Home redesigns primary
care to create a new PCP model Population Health Data Management
that provides people centric care as facilitates the flow and analysis of
well as care guidance to the clinical, financial, and patient related data
practice population. and information across all components of
the AC system.
People Centered Foundation
will ensure that the first principle for Payer Partnerships - focused on the
AC design and ongoing operations is framework necessary for an ACO to
to enable all people within the AC develop and maintain mutually
community to meet their needs and advantageous relationships with AC
desires for good health. Payer Partners payer partners (plans and employers).
15

17. Models of Accountable Care
Premier healthcare alliance – Accountable Care Implementation Collaborative
“Early Adopters”
As of 1/27/2011
WA
MT ND ME
MN
OR VT
NH
ID WI MA
SD NY
WY MI RI
IA PA CT
NV NE NJ
OH
IL IN DE
UT
CO WV MD
KS MO
MO VA
KY DC
CA
NC
AZ TN
OK
AR SC
NM
MS AL GA
TX LA
FL
16

18. Models of Accountable Care
Premier healthcare alliance – Accountable Care Readiness Collaborative
“Building for the Future”
As of 1/27/2011
WA
MT ND ME
MN
OR VT
NH
ID SD WI MA
NY
WY
MI RI
IA PA CT
NV NE IL NJ
IN OH
UT DE
CO WV DC MD
CA KS MO VA
KY
NC
AZ NM TN
OK
AR SC
MS AL GA
TX
LA
FL
17

19. Healthcare Reform
In the long history of humankind (and animal kind, too)
those who learned to collaborate and improvise most effectively
have prevailed.
~ Charles Darwin
www.brainyquote.com/quotes/authors/c/charles_darwin.html
Photo: Carol Davis-Smith, CCE
18

20. What it means for Clinical Engineering
Hospital & Health System Administrators
Physicians
Nurses
Clinical Technologists/Technicians
Therapists
IT Engineers/Technicians
Facilities Engineers/Technicians
And yes,
Clinical Engineers / Biomedical Equipment Technicians
19

21. A System of Systems
Human anatomy & physiology
– A system of systems
– Independent actions resulting in interdependent reactions
Image from http://needfornurse.wordpress.com/2010/03/16/all-about-human-anatomy-and-physiology/
20

22. A System of Systems
Health care
– A system of systems
– Independent actions resulting in interdependent reactions
• Federal & Local government and regulatory bodies
• Public & Private payers
• Acute & Non-acute care centers
• Clinicians & Non-clinician caregivers
• Ancillary support services
• Medical supply & device industry
• Patients & Families
Image from http://partnersinexcellenceblog.com
21

23. Clinical Engineering & Technology Management
Appropriate application of technology
• Preventive care (e.g. prenatal care, screening exams)
• Primary care
• Acute care
• Outpatient care (e.g. surgery centers, rehab centers)
• Long-term care
© 2011 Premier, Inc
A Systems Approach
to medical technology and healthcare delivery
22

24. The 5 “rights”
... of Medication Mgmt ...
Right patient ... Right time and frequency of administration ... Right
dose ... Right route of administration ... Right drug
... of Technology Mgmt ...
Technology is used in the right PLACE, at the right TIME, in the right
MANNER, with the right PEOPLE, COMMUNICATING in the right
way.
Just because we can, doesn’t mean we should.
23

25. Technology‟s Impact – financially & operationally
Old Technologies Old Applications
New Technologies New Applications
Introduction of Medical Devices and Rise of Healthcare Spending
20% Drug-eluting stents
18%
Healthcare Spending as a % of GDP
Neuro
16% Less-invasive
14% surgery
ICDs
12% MRIs Biventricular
pacing
10% Hips and knees
Insulin pumps
8% Stents
Open-heart
6% Prefabricated Surgery Balloon angioplasty
4% Bandages Sutures
Pacers
2% Kidney
0% dialysis
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2009
Source: Adapted from Futurescan, Healthcare Trends and Implications, 2007-2012; % GDP Data From CMS, Office of the Actuary, January 2011.
24

26. Electronic Health Record Incentive Program
CMS/HHS final rule – July 28, 2010
Implementation of electronic medical records
(EMR) and electronic health records (EHR)
EMR = The electronic record of health-related
information on an individual that is created,
gathered, managed, and consulted by licensed
clinicians and staff from a single organization who
are involved in the individual’s health and care.
EHR = The aggregated electronic record of health-
related information on an individual that is created
and gathered cumulatively across more than one
health care organization and is managed and
consulted by licensed clinicians and staff involved
in the individual’s health and care.
National Health Alliance for Health Information Technology (NAHIT) – Organization disbanded in August 2009, stating “mission accomplished” as HIT had moved to the forefront to reinvent and
reinvigorate the US health system.
25

27. Electronic Health Record Incentive Program
CMS/HHS final rule – July 28, 2010
 STAGE 1– Data Capture & Sharing, effective 2011
• STAGE 2 – Advanced Clinical Processes, to be published in 2013
• STAGE 3 – Improved Outcomes, to be published in 2015
CMS / HHS Electronic Health Record Incentive Program – Final Rule Federal Register / Vol 75, No 144 / Wednesday, July 28, 2010 / Rules and Regulations
26

28. Interoperability:
A popular buzz word with many interpretations
• A good definition for interoperability is…“the ability of a system or a product
to work with other systems or products without special effort on the part
of the customer.” -- Bridget Moorman, CCE (Bmoorman Consulting, LLC)
• Successful implementation of interoperability requires defined objectives and
measurable goals as well as a complete and well maintained physical
inventory of the applicable equipment items to include networking, device
driver and infrastructure environment characteristics for each device.
FACILITY:
Facility Excellent Good Avg Poor None
A 0.00% 100.00% 0.00% 0.00%
B 100.00% 0.00% 0.00% 0.00%
C 0.00% 12.86% 57.14% 30.00%
D 13.43% 28.89% 15.64% 42.04%
Grand Total System 12.22% 26.06% 14.80% 46.92%
DEVICE CATEGORY:
Device Excellent Good Avg Poor None
AED 0.00% 37.35% 46.99% 15.66%
ALARM/CENTRL/PATIENT 4.00% 12.00% 84.00% 0.00%
ALARM/REMOTE/PATIENT 1.46% 94.89% 2.55% 1.09%
ANALYZER/BLOOD 0.00% 1.64% 10.66% 87.70%
ANALYZER/BREATH 0.00% 0.00% 100.00% 0.00%
ANALYZER/GAS/ANESTH 0.00% 0.00% 0.00% 100.00%
ANESTHESIA 98.15% 0.00% 0.00% 1.85%
27

29. How can you find out how Interoperable you are?

30. Medical Device Interoperability:
Standards Promulgation Organizations
• The Continua Alliance
– Focuses on personal health and wellness market
• Use of IEEE 11073 PHD standards; IHE-PCD-01 for WAN
• Integrating the Healthcare Environment
– Patient Care Devices Domain (IHE-PCD)
• Use of IEEE 11073 standards; several profiles defined in healthcare
environment using medical devices

31. IEC 80001 – October 2010
IEC 80001 - Application of risk management for
IT-networks incorporating medical devices -
Part 1: Roles, responsibilities and activities
Consideration of the potential safety impacts in the design & implementation
of IT-networks incorporating medical devices
 AAMI 2011 annual conference educational sessions
http://www.aami.org/meetings/aami2011/sessions.html
 ANSI/AAMI/IEC 80001-1:2010 standard document
http://www.aami.org/publications/ITHorizons/2010/18-20_StandardsRegs_Cooper.pdf
 AAMI IT Horizons (2010)
http://www.aami.org/publications/ITHorizons/2010/18-20_StandardsRegs_Cooper.pdf
 AAMI IT Horizons (Fall 2011)
30

32. Alarm Mgmt & Remote Alerts
• Integrated communication via integrated communication devices
• Data/Alarms distribution (e.g. mobile devices)
• Closed-loop technology
thenerdynurse.com
© Vocera
AAMI
Medical Device
Alarm Mgmt
keepintech.com Summit
sdnn.com http://www.aami.org/hott
opics/alarms/index.html
newsitem.com -- Geisinger Health System
AAMI LinkedIn discussion - Clinical alarms --- What are hospitals doing for primary and secondary
alarm management ? And what role does CE/BMET have in it? Please share your experiences.
31

33. Advancing (Disruptive)Technologies
Everything is changing. Are you changing too?
Mini MRI
Utilizing nuclear magnetic resonance
spectroscopy, German researchers
have developed a magnet that could
lead to a pocket-sized MRI machine.
This technology could revolutionize
medical testing and research in other
The Skin Gun scientific fields.
Dr Jorg Gerlach has developed a www.smartertechnology.com
spray-on skin gun that operates
much like an airbrush. Healthy Withings Blood Pressure Monitor
stem cells from the victim’s skin The cuff connects to an iPhone
are combined with a solution and charge/sync port and the app gives the
sprayed directly onto the wounds. BP and pulse rate. The app can also
The new skin begins growing store readings to be compared over
(healing) almost immediately, time and/or shared with a physician.
eliminating the need to grow http://www.slashgear.com/witlings-
sheets of skin prior to application. blood-pressure-monitors-plugs-into-
http://www.slashgear.com/skin- your-iphone-05123278/
gun-is-star-wars-level-medicine-
02130324/#entrycontent
32

34. Partnership for Patients
Department of Health & Human Services (HHS) initiative – April 12, 2011
Partnership for Patients is aimed at improving the quality, safety
and affordability of healthcare for all Americans
• At any given time, about 1 in 20 patients has an infection related to
their hospital care.
• On average, 1 in 7 Medicare beneficiaries is harmed in the course of
their care, costing the government an estimated $4.4 billion annually
• Nearly 1 in 5 Medicare patients discharged from the hospital is
readmitted within 30 days – approx 2.6 million seniors at $26 billion
annually
HealthCare.gov Implementation Center – Special Programs – Partnership for Patients... ... http://www.ceoconversation.com/
33

35. Partnership for Patients
Department of Health & Human Services (HHS) initiative – April 12, 2011
• Hospitals joining the partnership are asked to ...
– Make achieving the harm and readmission goals a priority among senior leaders and the board
of directors
– Support clinicians, staff, patients and families in efforts to make care safer, improve
communication and increase coordination by implementing proven systems and processes
– Learn from and share successes with others
• GOALS to achieve by the end of 2013:
1. Reduce preventable harm in hospitals by 40%
• ~1.8 million fewer patient injuries
• 60,000+ lives saved over 3 years
2. Reduce 30-day readmission rates by 20%
• Preventable complications during a transition from one care setting to another
• 1.6 million patients would recover without preventable complications
• Over the next 10 years ...
– Reduce costs to Medicare by ~$50 billion
– Could provide billions more in Medicaid savings
34

36. The C-Suite ... and all your other customers
... Communication is key
“The mind of an executive is going in multiple directions simultaneously. They have to think about
all of the stakeholders involved, not just one set.” --Tony Montagnolo, EVP/COO at ECRI
Know Your Stuff
• Prepare ... Then prepare for the unexpected
• Know the benefits & challenges – technical, clinical, & business
Know Your Audience
• Tailor your presentation – language & interests
Know Your Organization
• Collaborate with other departments – healthcare is a team sport!
• Exhibit leadership, not arrogance or indifference
Know Your Finances
• Know the financial impact
• Leverage the expertise of your CFO and other Finance department resources
AAMI News: August 2010, Vol 45, No 8 – Sharpen Skills Before Meeting C-Suite ... http://www.aami.org/publications/AAMINews/Aug2010/c.suite.html
35

37. Healthcare Reform
We can’t solve problems by using the same kind of
thinking we used when we created them.
~ Albert Einstein
http://www.brainyquote.com/quotes/authors/a/albert_einstein.html
Photo: Carol Davis-Smith, CCE
36

38. Premier healthcare alliance
www.premierinc.com
Premier Performance Partners
Carol Davis-Smith, CCE - Director
carol_davis-smith@premierinc.com
Special thanks and acknowledgement to the following Premier staff members who
assisted with the development and delivery of this session.
Brent Hardaway, FACHE, Vice President, Premier Performance Partners
Sonia Greer, Sr. Consultant, Premier Performance Partners
Premier Advocacy Team (Washington, DC)
Premier Corporate Communications Team (Charlotte, NC)
37