On Wednesday, September 21st, Mike Schiller, CMRP, Senior Director of Supply Chain Management for the Association for Healthcare Resources and Materials Management (AHRMM), and Edward Hernandez, founding partner at Covalus led the latest broadcast in an ongoing education series aimed at improving the healthcare capital equipment procurement process. The broadcast recording is now available for viewing.

During the 60-minute broadcast, Hernandez—who was joined by OpenMarkets Co-Founder and Senior VP Tom Derrick—focused on successful equipment purchasing for new hospitals, as well as annual capital spending for U.S. hospitals and how that spend was broken down.   

In particular, the cost of healthcare construction projects has risen since the mid-1990s, said Hernandez. As time has passed, the level of complexity inside the healthcare environment has increased. With that level of sophistication, building, MEP Systems, and equipment costs per square-foot have all increased from $400/sq ft 15 years ago to nearly $1,000 sq/ft today.

“Because of this, the big picture is important,” said Hernandez. “The strategy business plan, facility master plan, budget and equipment plan all must come together…. Collaboration among teams and with supplier partners is critical.”

Schiller then discussed his experience as Corporate Director of Supply Chain at Children’s Memorial Hospital, where he led the entire coordination process of medical equipment procurement for the construction of the Ann & Robert H. Lurie Children’s Hospital in Chicago, a 23-story, 1.25 million square-foot facility.

He said the project was both exciting and challenging. “With a project of this magnitude, many factors had to be top-of-mind, most notably supply chain strategies. We made sure supply chain had a critical role in the project,” said Schiller.

During his presentation, Schiller highlighted the fact that communication and transparency are key for such projects. A significant challenge for providers is staying in sync with suppliers, as 75-100 equipment manufacturers can be involved in any new hospital procurement and bidding process. Each of these potential partners must stay in the loop on changing job site requirements, meeting Certificate of Insurance regulations and details regarding the contracting process. Schiller also walked us through how the Medical equipment procurement strategy must evolve from the start of construction to the opening of the hospital, as it’s crucial to conduct ongoing discussions about what advancements will be made during the time frame.

Lurie opened on-time, and was $15 million favorable to the FF&E process, said Schiller. “When I saw the lights turn on, I knew patients were being cared for. It was one of the hardest project I’ve ever worked on, but also one of most rewarding.”

OpenMarkets Healthcare Supply Chain Broadcast Series is aimed at educating healthcare providers on how new processes and intelligence can be utilized to save valuable time, better collaborate with suppliers and maximize their capital budgets. 

Click here to register for the next webinar in the series, Leading Practice in the Healthcare Supply Chain: Perspectives from Deloitte, which will broadcast Oct. 19 at 3 p.m. EST/12 p.m. PST. 

Tom Derrick

Tom leads a range of core functions for OpenMarkets, including strategic partnerships and marketing. Prior to OpenMarkets, Tom served as a senior communications director for... More about Tom Derrick