First of all, good morning! Let me congratulate John, Ruth and the team on 10 years. It’s a fantastic achievement and it’s grown over the years, and this is the biggest and best exhibition I’ve seen so far, so well done John. So I’m Dal Jdali, I work for Althea. And I’ll be talking about managed services, the efficiencies and benefits of those, and how it affects you and affects the institutions that you work in and what you can do as part of that to help move things along.
We had a lot of questions on our stand and some people saying who’s Althea? So I’m just going to briefly touch on that before I can get into managed services. Althea’s a large group: 3000+ employees, we look after 1.4 million devices, and we’re world leader in multi-vendor independent services. You can read all the different stats, but what it tells you really is we’re a stable, reasonably large company. In the UK, you would have known us as TBS, Asteral, MESA, and these all merged last year to be Althea. In the UK, we’re in 330 healthcare institutions and we have over 300 employees.
When we think of managed services, some of you may remember managed services started off as catering being outsourced from hospitals, and that’s where a lot of that began. But over the last 15 years that’s changed and a lot more healthcare equipment side has moved into various types of managed service models. Why do they do it? Well, technology obsolescence is one of them. Think of all the changes that you’ve seen. We know the NHS was 70 years old last year. Think of all the devices, the technology advancement, all that comes at a price. Think of the costs of MRIs, CT scanners, how’s that going to be funded? So managed services allows those things to be implemented.
So, access to technology. Part of it is also asset management. The other part of it is actually how do you fund the capex? The biggest shortfall in NHS is capex funding. Through managed services, we can actually fund these through an operating model. The other part of it is long-term budget planning certainty, certainty of cost over the time period, and the streamlining of purchases. And one of our speakers is going to talk about purchasing in the next presentation and you’ll learn more about that in a second.
So what is managed services? It used to be asset management, servicing, financing, installing, and we’ll see that the model’s evolved from there. We started as a multi-vendor DI environment service, then we moved into endoscopy, but a lot of companies are doing managed services in a whole range of areas, and we’re going to explore some of the other ones in that. And these days managed services also include consumables and not just devices as we see them as biomedical engineers. Which is usually higher tech, I hope, equipment.
So, how do you develop a managed service? One of the key things is actually to define the concept with the clinical service you have in mind. Whether it’s DI, endo, what is it that they need? When we think of managed services as engineers we just think of the equipment element. It’s not just about equipment. What do they want to achieve, what does the trust want to achieve in terms of developing that service, enhancing that service? What do they need in terms of buildings, what do they need in terms of staff, finance? The whole package needs to be defined and quantified. Then of course it needs to be funded. The funding model now is very flexible. We could fund it or other managed services providers can fund it, but it can also come partly from the institutions funds, but also from charitable funds. So it’s a very flexible model to try and reduce the costs.
As I said, facilities and infrastructure is part of it, and also the replacement programme can be spaced over time. So you can actually replace products in year one but also year three. So it can be phased in over the life of the agreement. This is the bit of course we’re all interested in: the service and maintenance of all of that equipment over that lifecycle. But this is all tied to outcomes and KPIs and of course clinical use. At the end of the day what are we after? We’re after a safe and efficient service: patient safety and the highest professional care for the patient. So it’s really defining the concept at the top end and actually ending up as a safe and efficient patient service. One of the enablers of course is that once it’s a managed service for the trust, it allows a VAT rebate. This should not be the main driver, the efficiencies come from a lot of the other things that are involved, but this actually does become the icing on the cake.
Managed services, as we’ll see when we break down the actual tasks, or each section is based on an output-based agreement. So there’s milestones and penalties for the companies providing these if they don’t hit these, so that reduces the risk for the trust and transfers that risk to the provider. Of course the NHS as an institution is to provide the highest levels of patient care, with safety as its central piece. Patient safety is core. So that’s why these agreements are always based around patient safety and outcomes.
There’s been all kinds of procurement processes, Shared Business Services is one of the NHS institutions, and they’ve actually got a framework for managed services. This is from their website: why should you use it? It’s OJEU compliant. A detailed procurement process has already taken place. So you have safety, it’s approved. You know what you’re getting, these are trusted suppliers. These companies, not just us, these companies have expertise both in finance, they have expertise in technology. We are experts in radiology, experts in endoscopy, experts in terms of selecting equipment. We have financial modellers. We have asset companies that finance these things. So there’s a whole range of, whole teams behind this that if you had to replicate it yourselves would be a huge amount of money, but we can leverage those teams across a wide range of projects.
One of the things we’ve seen is funding. Over the 70 years of the NHS, you’ve seen population growth. You’ve seen life expectancy increase. Of course that’s just two of the factors. One of the other factors is innovation. Innovation in technology, the products that we talk about; innovation in procedures, there’s a lot more procedures that go on these days; innovation in pharmaceuticals, you think of all the oncology-based treatments. And there’s a huge cost to all of this and this is what creates this funding gap. And the question for us is how do we fund that gap? So, these are the reasons why you would use a managed service. As I say, the companies on that list are quality companies that have been tried and tested and proven.
That framework shows the kinds of managed services that are available. You can see diagnostic imaging, cardiology, cath labs - those ones that are highlighted we represent, but you can see pathology is one of them - point of care, renal clinics and home services. So there’s a wide range of services. Now this is not definitive, it is actually growing, and we’re in discussions with various people who actually want to do managed services in theatres and a number of other areas. So this is not definitive and ending, it’s actually growing because people are looking for innovative solutions on how to enhance and grow their clinical service.
We talked about patient safety, of course everything needs to be centred around that, so all these managed services need to comply to these three things that I’m sure you’re totally familiar with: Medical Devices Directive 2015, CQC - anybody ever heard of those people? Every couple of years they’ll come and see you - and of course the trust’s own medical device management policies. These are things that you would be familiar with on a day-to-day basis.
So, what is a managed service in terms of its core steps? It’s really two phases. You’ve got planning and design, which we talked a little bit about. You’ve got enabling works if you require buildings, temporary buildings, enabling works for MRIs, power, all kinds of things, IT systems. Technology selection, how do you choose the best products? We’re an independent company, vendor independent, so we don’t really mind, we help and advise, but it’s up to the clinical service to choose what’s best for them, and then the capital investment, the implementation, so all the way down to implementation is phase one if you like, it’s the implementation phase, and we’re carrying the risk for that, and phase two which is actually the operating phase. And this is where we, as engineers, would get involved in terms of both the equipment selection and equipment management.
So phase one can be anything from six months to a year depending on the service, depending if you want a new building built or you want temporary buildings or whatever your requirements are. So you’ve got the implementation phase and then you’ve got the operating phases. That can be seven to 15 years depending if you want to sweat the assets or you want to actually replace. Now part of this you can actually build in, as I say, phased introduction of products and services, but also you can actually have a replacement long before the end of that. You’re not tied in to the end of that period. You can actually, if there’s a new technological innovation, we can buy those products at book value and then replace those with the latest products, so it allows continuity. So, in the operating phase, you’ve got equipment management, maintenance, inventory management, user trading of course, the dreaded KPIs, which I hope you all report regularly, and then the end of the lifecycle decommissioning of the devices.
When we talk about design - and this is just a quick slide to show you one of the concepts, this is something we did for endoscopy - design is just not about the products and offerings, it’s really about patient experience: what does the clinical service want to achieve? This sort of diagram shows patient flow, how the patient comes in, where they go, what they do. The design would also include things in terms of gender, male/female rooms, IT systems. So its patient flow, dataflow as well is important. What data are we going to generate during the patient flow? Where is it going to go? Does it need to just go to HIS and patient records or does it actually also need to be seen by other people during that process? So there’s a whole number of factors that need to be built in to the design of the service.
As we said earlier, if you’re looking at holistic service enhancement or improvement, you can have brand new buildings, you can have temporary buildings, you can have cath labs on the back of a lorry, there are all kind of options that are open to you either on a temporary basis or a long-term basis. The key thing is actually enabling the service to grow and improve and provide the service to the patients that you want to do.
Of course in the implementation phase we have project managers that work with estates. They work with the finance teams within your trust. Backed up with that we have authorised building companies that are authorised to work in that space. So we carry all of that. We have key project managers in our project management office that would actually manage that project all the way through. Now, if we say it’s going to start on the first of September, it has to start on the first of September, if it doesn’t we have financial penalties, so that risk has been transferred to us. So whatever is discussed and agreed has to be implemented and we’re carrying the risk. It’s not like the Spurs football stadium which only recently opened after three months of delays.
As I say, everything’s aligned to what the NHS or the organisation we’re talking about wants. You’ve got operating metrics for the NHS whether it’s A&E departments and four-hour response time or whether it’s the 16 days for refer to treatment. These are the kind of things that you’re trying to achieve as an organisation. And these managed services that we offer are aligned fully with that. They’re designed to actually support that and achieve that. Just as an aside, this is anecdotal and not backed up by any facts, in terms of retention of staff, we’ve found a lot of people are a lot happier when they’re in new buildings, new equipment. And it’s not just the newness of it. If you actually help manage demand and the supply, you know, they’ve got enough kit, they’ve got enough people to actually provide the service that they want to provide, they’re a lot happier, they’re not under the duress that they’re normally in because there is actually so much demand and not enough capacity to provide it.
So, in terms of support, we have a customer care centre that is 24/7, as we said. We have a reactive team, call centre, field service engineers that are dispatched, response times, KPIs and all that. KPIs and product availability, our target which we overachieve on is 98% availability of the devices. So in the operating phase these are the elements: the reactive team, the PPM team - as you all know as engineers, PPM is just as important if not more important as the reactive side - and then we have an after-care team. The after-care team is really about other elements, making sure that we’re performing, not just from KPIs but relationship management, we have key-account managers, and also ongoing training to ensure that everything is running to the high levels that you expect. It’s all about output-based agreements. We really want the highest levels of service and this is what we have to provide. And the training element on this particular slide is endoscope handling to reduce damage, and this is a key factor.
Not all clinical services require it, but one of the elements in endoscopy is actually load equipment support. To give you an idea, we have 1,200 scopes and electro-med devices in our loan pool for endoscopy. So it gives you huge confidence that if there is something that is required in terms of loan because of a fault that we can’t fix immediately, we can do that. It can be short-term loan, it can be 10 days, or sometimes customers actually find that they need more equipment than they originally planned and that loan becomes a semi-permanent loan. It’s hard to get our equipment back.
So, one of the governance elements of this is actually having regular meetings, there’s quarterly reviews, when doing performance reporting everything is transparent. There is a web portal where you can view these things, but we have a quarterly review meeting with the client to make sure that we’re performing, and again there’s financial penalties if we’re not. But it would never actually get to that point because we’re trying to make it interactive. It’s a partnership model at the end of the day. There’s no sort of win-lose; it has to be a win-win. As I say, training and education is a key element of it. One of the problems we have in all organisations is staff turnover, so ongoing training for staff that’s there, but also new training for staff that’s just arrived or just joined.
So a lot of those things that we discussed all involve devices to some degree, whether it’s MRIs, CT scanners, endoscopy or any other kind of actual hardcore medical device that you as engineers would be involved with. Managed services is not just about that; there’s managed services on consumables. We’ve worked with Leicester for a long, long time and they asked us to get involved in their cardiology consumables. In cardiology consumables, we’re talking about guidewires, stents, valves, those kind of things. Now some of these things are £50 to £100 and some of these are £8,000, £10,000 consumables.
Now, one of the key benefits that came out of this, because at the moment they were managing themselves so we put in a team of admin staff and asset management system, asset tracking system, I mean everything, those kind of things need to be tracked and traced. Where did that stent go? What patient was it used on? If there’s a recall, it all needs to be tracked and traced. So clinical staff are looking after that. When we took it over, we saved 5,000 hours of clinical staff time so they can actually be refocused to looking after patient care, which is the core directive. There was a £2m stock reduction. You can imagine what that could be if that kind of thing was rolled out across the whole range of institutions. And this is something that’s a growth area for us. There’s £980,000 in service delivery savings. And as I say the VAT concession is not the core thing, or it might be for financial controllers who are losing their hair just like me, £5m is nothing to be sneezed at. So for them it’s a good thing. The VAT thing shouldn’t be the core driver, but this gives you a flavour for managed service in a consumables setting.
So, in summary, why should you use it? It’s a custom offering that’s actually designed to your particular service and need. Depending on your institution, depending on your clinical service, what is it that you need? We sit down. We spend a long time on the design and concept phase. We have teams of people, as I said to you financial planners, design consultants, people all there to help, technology experts, to ensure that not only is your service going to be raised or enhanced but also the patient experience has actually improved. And that’s what it’s all about at the end of the day so your actual performance is a higher level.
It gives you an opportunity to upgrade when you don’t have the capital budget. The funding gap is big and is growing, because those demographic trends we talked about earlier continue to grow, and they will grow. And if you look at some of the technology coming through, both on devices and on pharmaceuticals, some of the crisper DNA editing stuff, it’s £100,000 per patient per treatment, who’s going to fund that? So this funding gap is going to grow, and we have to be innovative to try and continue to provide high levels of services. There’s a huge transfer of risk, which again financial controllers love. We’re vendor neutral. If you want Siemens you can have Siemens; if you want Philips you can have Philips. We don’t try and drive it to a particular manufacturer; it’s all about providing the right service to your needs. And as I say it’s a long-term partnership model. We work in partnership with what you want to achieve and we only win if you win.
Before I get on to that I just wanted to say also, as engineers, we fit in the central part of the organisation. We see all the devices. We see all the departments, we see all the users. We’re in a unique position to see if services are being delivered or not being delivered to the level that is expected or needed. So you’re in a great position to be advocates for other types of solutions. I know we’re involved in technology equipment selection, but we also sometimes have to voice our opinions and say look there is another way. So you’re in a unique position to actually say there is an alternative.
Dal Jdali's presentation at the EBME Expo Managed services, efficiencies and benefits