Clinical Engineering at Bayhealth

Roy (JR) Anderson is a highly accomplished Clinical Engineering Director at Bayhealth with a successful track record of managing teams in both military treatment facilities and private hospital entities. His wealth of experience in clinical engineering, gained during his service in the Air Force, has honed his skills in building and strengthening bio-medical equipment service teams while prioritizing customer needs and patient safety. At Bayhealth, he oversees all aspects of medical equipment management, ensuring regulatory compliance and efficient budget moderation.

In an interview with MedTech Outlook Magazine, Roy (JR) Anderson, Director, Clinical Engineering at Bayhealth, shares his insights on the shortcomings of contract management in MedTech companies and the ways to manage them.

What are some of the issues that exist within the contract management industry that MedTech companies or healthcare facilities have to really overcome today?

In my experience, the major problem is the decentralization of contracts within healthcare facilities and MedTech companies. During my first civilian job after military service, I observed multiple vendors covering the same equipment, leading to redundant contracts and wasted resources. Without a centralized process, it was challenging to use the large volume of business from a single vendor to get better deals and discounts from them. Each section renewed contracts individually, resulting in unnecessary expenses.

Upon joining Bay Health, I recognized the need for a more efficient approach to contract management. I tried implementing a model inspired by the Air Force, embedding a Strategic Source Analyst within the clinical engineering team. This analyst's sole responsibility was to monitor and optimize contracts. By consolidating contracts under master service agreements and negotiating better deals, we achieved significant savings amounting to $3.5 million in two years.

“One of the major industry developments is the centralization of contract management under clinical engineering team by appointing a contract management expert who can benchmark contracts nationwide, securing better prices and preventing unnecessary payments”

In addition, the lack of integration between contracted services and our CMMS system caused disruptions and delays in equipment maintenance. To address this, our Strategic Source Analyst ensured that all contract details are uploaded into the system, providing technicians with instant access to contract information when handling work orders. Streamlining this process expedited equipment repairs and minimized downtime.

Speaking of the Medtech industry at large, are there any thoughts on some notable developments in the contract management space?

Contract management is a leading challenge even when we look at the industry at large. Decentralized nature of contracts results in poor visibility. In most cases, managers lacking contract management expertise are often responsible for poor negotiations, leading to suboptimal deals. One of the major industry developments is the centralization of contract management under clinical engineering team by appointing a contract management expert who can benchmark contracts nationwide, securing better prices and preventing unnecessary payments. Visibility and expert management of contracts are crucial issues faced by the healthcare industry.

What is your strategy when it comes to leading your team towards a holistic contract management?

My leadership strategy for holistic contract management involved gaining buy-in from all sections and instilling trust in our strategic source analyst's abilities. It took around six to 12 months to establish this trust and encourage teams to utilize her expertise. My role included promoting her services and ensuring she was involved in new equipment orders and contract expirations. As the results showed substantial savings, the momentum grew, and now we are sought out for various contracts, even those beyond medical equipment. We do not deal with anything other than medical equipment contracts and they are directed to appropriate departments. Our success speaks for itself, and having a dedicated contract expert has proven to be a tremendous advantage.

What according to you does the future really holds for contract management in the medical equipment space?

In the medical equipment industry, the future of contract management lies in centralization and integration. Hospitals should establish a dedicated office responsible for reviewing and negotiating medical equipment contracts, in close collaboration with clinical engineering team. This synergy will ensure efficient updates in the CMMS, preventing accidental breaches of contracts.

Building trust with customers is crucial to successfully negotiate contracts and achieve significant cost savings. Shifting from initial savings to sustained cost avoidance is the next phase. By leveraging the collective spend on multiple contracts, our strategic source analyst can pursue better deals through negotiations. It can lead to substantial benefits in the long run, enabling us to optimize expenses and streamline contract management effectively.

Is there a piece of advice that you would like to share with your peers in the market today?

My advice to peers in the market is to begin by assessing the spending under contracts for each section and identify opportunities for consolidation. It's essential to advocate for a dedicated strategic source analyst or contract management specialist who reports directly to clinical engineering department. This expert can address contract-related issues more effectively, digging into how much is spend on each contract, how often is it negotiated, and who negotiated. Leveraging the collective spend with vendors can lead to substantial discounts and cost avoidance, even from simple inquiries. Taking these steps can help combat industry changes and facilitate successful transformations.