Healthcare Technology

Background

Health technology context

Health Technology covers a wide range of apparatus, consumables, devices, equipment and instruments that would require many volumes of documents to cover effectively. This document, as part of the broader IUSS Norms and Standards project, aims to look at the key elements of Health Technology and its management as it manifests in healthcare facilities. The document specifically aims at framing the subject of Health Technology within the infrastructure development and operations domain.

The various definitions of Health Technology are listed in the Glossary but it is important to note that this document focuses on durable medical equipment and related consumables used in healthcare facilities. Hospital plant and machinery, normally associated with the building and most often installed as part of the building, are dealt with in various other documents in the IUSS document bouquet, either under the respective hospital engineering disciplines or under the respective clinical service area.

Application of the Guidelines

This document, published under the Health Facility guides, would be useful for practitioners of Health Technology Management both at the level of an individual facility and for groups of facilities (for example, in a district) and at any level of care. It would also be of great value for HTM practitioners and facility managers in general who might lack the first-hand experience of this relatively specialised field. In many cases the guidelines show the way towards developing specific and applicable solutions rather than being prescriptive. This approach is necessary to ensure that they remain sufficiently generic to be applied across a broad spectrum of scenarios. The document would also be of interest to health infrastructure professionals who might need specific insight into the domain of Health Technology and its management, recognising that technology and infrastructure are closely inter-related and will become ever more so in future healthcare systems.

Associated process and related documents

This document should be considered in the context of the solid platform provided by the Health Technology Policy and the Health Facilities Planning Directorates of the National Department of Health. This includes the Framework for Health Technology Policies which outlines the vision of a National Health Technology System; the draft Health Technology Management Policy document which inter alia outlines the organisational and structural requirements at all levels of governance pertaining to such a system; the Health Technology Strategy which outlines specific objectives and activities, with associated timeframes, for establishing a National Health Technology System; the Report of the Interim Steering Committee on Health Technology Assessment, which underlines the importance of having formal processes in place to assess issues of health technology cost-effectiveness, access, service-fit and social impact, amongst other “evaluative dimensions”; and lastly the draft Medical Device Regulations and associated background documents which – in their final form – will be promulgated under the South African Health Products Regulatory Agency (SAHPRA) Act .

Life cycle of Health Technology

Planning

Introduction

Planning and budgeting are often considered jointly since planning – for it to be effective – needs to take place within the context of policy, financial, and other constraints. Box 1 shows the overall process.

BOX 1: The planning and budgeting process (start-up)

Steps	People responsible	Actions
Plan and budget within the framework of guidance and direction from the national level.	Health service managers at national level in consultation with managers at other levels.	Framework requirements follow regulations and standards set by government; develop a Healthcare Technology Policy including decisions on standardisation, maintenance provision, finances for HTM activities, and the organisational structure for an HTM service; define the overall “Vision” for healthcare delivery at each level of the health service; develop “Standard Equipment Lists” which define the essential equipment stock for the healthcare to be delivered at each level; use “Generic Equipment cifications” for acquisition ofequipment; develop good policies for purchasing, donations, replacement, and disposal of equipment; and participate in the planning, equipping and operation of health facilities.
Increase the availability of planning skills for equipment at all service levels, by developing planning “tools” through one-off exercises.	HTM working groups and sub-groups. Finance officers.	Knowing where one is starting from establish an Equipment Inventory to keep up-to-date records of the current equipment stock; estimate the equipment stock values; define the usage rates of equipment-related consumable items so that realistic estimates can be made of the finances required for equipment accessories, consumables, and spare parts; and set up budget lines to record and monitor expenditure on all the different equipment activities.
	Health management teams. HTM working groups and sub-groups.	Knowing where one is headed develop a library of literature and resources which will help with equipment planning and budgeting; adapt the vision for healthcare delivery at their service level; adopt good policies for purchasing, donations, replacement, and disposal of equipment; adapt the Standard Equipment List for their service level; develop generic equipment specifications and technical and environmental data; and estimate human resource requirements and associated “acquisition” and capacity building.
Ensure realistic estimates are made for all equipment-related allocations at all service.levels, by using budgeting “tools” to calculate expenditures required.	HTM working groups and sub-groups. HTM managers and their teams.	Capital budget calculations calculate expenditure requirements for replacement items; calculate expenditure requirements for new purchases; calculate expenditure requirements for support activities linked to purchases and donations; calculate expenditure requirements for pre-installation work; and calculate expenditure requirements for major rehabilitation work.
Ensure realistic estimates are made for all equipment-related allocations at all service levels, by using budgeting “tools” to calculate expenditures required.	HTM managers and their teams. Heads of section. HTM working groups and sub-groups.	Recurrent budget calculations calculate recurrent expenditure requirements for maintenance; calculate recurrent expenditure requirements for consumable operating costs; calculate recurrent expenditure requirements for administrative expenses; and calculate recurrent expenditure requirements for ongoing training.
Use the tools to make long-term plans and budgets	HTM working groups and sub-groups.	Long-term planning establish an Equipment Development Plan covering the priorities for equipment needs across their service level over time; establish an Equipment Training Plan to cover the ongoing rolling programme of training required in relation to equipment activities; establish a Core Equipment Expenditure Plan which prioritises equipment spending across the facility over the long term; and establish a Core Equipment Financing Plan indicating possible sources of funds and related options.
Review the plans and budgets annually, and monitor progress in order to improve planning and budgeting.	HTM teams. HTM working groups and sub-groups.	Annual planning update the Equipment Inventory; update the Equipment Development Plan; update the Equipment Training Plan; cost the capital and recurrent requirements for the current year, and update the Core Equipment Expenditure Plan and Core Equipment Financing Plan; and prioritise across their service level to obtain the annual purchase activities, annual rehabilitation activities, annual corrective activities, annual training activities, and thus the annual equipment budget.
Review the plans and budgets annually, and monitor progress in order to improve planning and budgeting.	HTM working groups. Heads of department and HTM managers. Health management teams.	Monitoring progress ensure annual plans are implemented; study the implications arising from planning and budgeting; request help for any deviations from plans such as emergency purchases, maintenance and consumable contingencies; monitor actual expenditure against allocations; seek the funding identified; consider linking allocation of budgets to whether departments achieve their performance targets; monitor progress through establishing planning and budgeting tools and associated indicators; and ensure that the information generated is used to improve stock control, training, procurement, utilisation, etc.

Service and related technology planning

For healthcare technology to be managed effectively, a clear idea of healthcare delivery goals and targets is needed, as well as the context in which the technology is operating. Equipment should not be viewed in isolation – it is there for a purpose, and must be managed according to set objectives. For effective planning, access to a wide range of information and reference materials is needed, as well as a clear vision of the direction in which the health service is headed, plus identification of what equipment is required to help achieve the health service goals.

To inform the technology part of the debate, the HTM working group (at each level) should consider the equipment implications of the healthcare interventions suggested, and then offer technical advice to their health management team. Box 2 and Checklist 1 show some of the issues that the national, province/district- and facility level HTM working groups, respectively, should consider.

BOX 2: Baseline information on medical devices

Medical device situation	Considerations People responsible	ResultPeople responsible
Availability and condition of medical devices (including type, number, location and physical condition). Status of electrical, water, and waste disposal systems related to medical device use.	Medical equipment inventory including status and condition. Current health technology management infrastructure (or lack thereof).	Facility map. Medical equipment inventory (quantitative and qualitative). Outline of health technology management infrastructure.

CHECKLIST 1: Equipment considerations for vision at national level

Issues	Example
What expansion of services is necessary or feasible?	What should be the role of a hospital (central, referral, district) in terms of the interventions and procedures to be carried out? What does this mean in terms of equipment availability? What type of care can be offered by rural, district or town health centres? Can any types of care be transferred over to them? What does this mean in terms of equipment availability? It may be best to locate certain specialised services (such as intensive-care units) only at certain hospitals. Some specialised services, such as radiotherapy, may only ever be offered at national level. With pressures to reduce costs, improve efficiencies, and possibly to reduce staff numbers, can service provision be rationalised? Is expansion based only on needs that can be realistically met?
What are the implications in terms of staff, skills, resources, patient referral networks?	Introducing a new service has knock-on implications for human, material and financial resources. For example, should eye instruments be bought for a facility if there is no eye surgeon, or prospects of one becoming available? Or if the referral system is such that dialysis is only undertaken and supported at a central facility, one should think carefully before placing dialysis machines at other further locations. However, if such expanded “satellite” services are required, then all the resources required to ensure effective service provision should be identified, provided and maintained.
Are desired expansions financially affordable?	Although many hospitals may ideally wish to have fluoroscopy facilities (for example), at a cost of approximately $500 000 per suite, is this a feature each hospital can necessarily invest in?
Do the services suggested fit into the overall health service in the country?	Is it possible to develop a vision which fits in with the other health service provider organisations?

Planning and budgeting when starting out

Box 3 shows the minimum requirements for a scenario for an HTM system in its infancy, where the initial focus is not on long-term forward planning, but concentration on planning and budgeting on a yearly basis. As the system matures, other elements for forward planning can be added.

Box 3: Minimum planning and budgeting requirements

Planning and budgeting element

If just starting out

1. Equipment inventory 2. Stock value estimates 3. Budget lines for equipment expenditures. 4. Usage rates for equipment-related consumable items. 5. Reference materials. 6. Developing the vision of service delivery for each facility type. 7. Standard Equipment Lists. 8. Purchasing, donations, replacement, and disposal policies. 9. Generic equipment specifications and technical data. 10. Capital budget calculations. 11. Recurrent budget calculations. 12. Equipment development plan. 13. Equipment training plan. 14. Core equipment expenditure plan. 15. Core equipment financing plan. 16. Annual equipment planning and budgeting. 17. Monitoring progress.

1. Essential to have. 2. Useful to carry out this exercise later on when rough estimates needed for long-term forward planning. 3. This alteration to budget layout can be done later, but it will help with analysis. 4. Useful to do this exercise as it helps with calculation of specific (annual) estimates. 5. These can be developed over time. 6. Should have an understanding of this, even if full exercise not undertaken. 7. Initially, list of urgent equipment needs drawn up by departments can be used. Later on, Standard Equipment Lists obtained elsewhere can be used. 8. Essential to have. 9. Initially learn from others. Later, develop own. 10. Initially learn how to make specific (annual) estimates; only learn the rough estimation methods when undertaking long-term planning. 11. Initially learn how to make specific (annual) estimates. Only learn the rough estimation methods when undertaking long-term planning. 12.  Use the basic equipment development planning process only, and only apply it to the short term. 13. Develop a straightforward one for the short term 14. Initially only plan annually (see below). 15. Initially only plan annually (see below). 16. Create annual actions plans and an equipment budget showing income and expenditure. 17. Undertake the basic elements only – progress with annual plans and tools, coping with emergencies, providing feedback.

Needs assessment

Standard lists of equipment

Once the vision for the direction of health service delivery has been developed, the healthcare interventions and procedures to be offered will be known. Based on this information, the Essential Service Packages can be developed; these will translate the vision into:

• human resource requirements, and training needs;
• space requirements, and facility and service installation needs; and
• equipment requirements.

The tool used in the process of defining what equipment is needed for each healthcare intervention is the Standard Equipment List. This is:

• a list of equipment typically required for each healthcare intervention (such as a healthcare function, activity, or procedure). For example, health service providers might list all equipment required for eye-testing, delivering twins, undertaking fluoroscopic examinations, or for testing blood for malaria;
• organised by activity space or room (such as reception area or treatment room), and by department;
• developed for every different level of healthcare delivery (such as district, province) since the equipment needs will differ depending on the vision for each level;
• usually made up of everything including furniture, fittings and fixtures, in order to be useful for planners, architects, engineers and purchasers, and
• a tool which allows healthcare managers to establish if the Vision is economically viable.

The Standard Equipment List must reflect the level of technology of the equipment. It should describe only technology that the facility can sustain (in other words, equipment which can be operated and maintained by existing staff, and for which there are adequate resources for its use). For example a department could have:

• an electric suction pump or a foot-operated one;
• a hydraulic operating table or an electrically controlled one;
• a computerised laundry system or electro-mechanical machines; and
• disposable syringes or re-usable/sterilisable ones.

It is important that any equipment suggested:

• can fit into the rooms and space available. Reference should therefore be made to any building norms defining room sizes, flow patterns, and requirements for water, electricity, light levels and so on;
• has the necessary utilities and associated plant (such as the power, water, waste management systems) available for it on each site - if such utilities are not available, it is pointless planning to invest in equipment which requires these utilities in order to work; and
• can be operated and maintained by existing staff and skill levels, or for which the necessary training is available and affordable.

Usefulness of the standard equipment lists

A Standard Equipment List is an aid to the planning process. In order to plan what equipment to purchase, awareness of any shortfalls in equipment is needed. To determine such shortfalls, the Equipment Inventory needs to be compared with the Standard Equipment List. This will indicate whether any equipment is currently missing or needs to be purchased. Thus, the Standard Equipment List will assist in determining what equipment is:

• necessary;
• surplus;
• extravagant; and
• missing

in relation to the Vision for the service.

Responsibility for developing the Standard Equipment Lists varies from country to country. It is most important that this task is undertaken by a multidisciplinary team, so that decisions benefit from the skills and views of many disciplines, not just one or two. The health service planners at central/national level should consider developing Standard Equipment Lists in collaboration with staff from each level of the service, as indicated in Box 4 below.

Who/which level?	Takes what action?
HTM working group at each level	Organises special meetings of different types of staff to work on the Standard Equipment List. Then reports back to the Health Management Teams.
National level	Takes the first step and runs specific exercises to establish the Standard Lists of Equipment for each clinical and support area, at each operational level.
Province/district level	Takes the second step and adjusts the list on a regional/district basis to cover local variations.
Facility level	Takes the third step and assesses: - how they can provide the healthcare interventions; and - what numbers of equipment they require depending on how they organise their work. Organisational decisions influence the quantity of equipment. For example, the timing of clinics can reduce or increase the workload in the laboratory. Before ordering new equipment, its level of use will need to be assessed.

Equipment development plan

Especially for an HTM system that is not mature, it is essential to have important to have [BvR1] an equipment development plan; one suggestion for the development planning process is presented in Flowchart 1 below.

Flowchart 1: The basic equipment development planning process

Prioritising and appraisal of options

It is equally important, in the context of needs assessment, to critically examine the process and its outputs and outcomes. Checklist 2 below poses some key questions for consideration by the appropriate stakeholder/s.

Checklist 2: Key questions for prioritising and appraisal of options

Consumables

Consumables are a major contributor to equipment-related cost of ownership, and form a significant portion of recurrent and operational expenditure. It is therefore important to establish the consumables needs so that adequate provision is made and service delivery is not interrupted. Flowchart 2 below suggests a process to facilitate the needs assessment related to equipment-related consumables.

1.     Asset management

3.1        Inventory

It is essential that an inventory (asset register) of medical equipment is maintained. However, it is both costly and time-consuming to include each and every medical device in an asset register. For those items in an asset register, the following information should be captured and verified:

·       Equipment type (an international nomenclature system such as the Universal Medical Device Nomenclature System (UMDNS) should be used so that all institutions use a common name for the same type of device).

·       Make/manufacturer.

·       Model.

·       Serial number.

·       Date of acquisition.

·       Price paid (include any costly accessories).

·       Supplier details (name, address, contact person, contact details).

·       Location – department or ward where the unit is used.

The responsibilities, activities and role-players relating to equipment inventory are shown in Box 5.

Box 5: Inventory-related responsibilities, activities and actors

Body	Responsibility	Activity	People involved
HTM Service	Creates and updates the Equipment Inventory.	Organises the gathering of inventory data.	Either by: ·     facility staff for their own facility; ·     district staff for the facilities in their district; ·     central staff for the health service as a whole; and ·     using specialist help.
Inventory team	Carries out the Equipment Inventory at each facility.	Visits each department in the health facility, and: ·     looks in all rooms, cupboards, etc.; ·     physically checks all equipment for the details required; and ·     fills in the Equipment Inventory Record Sheets. If existing records are available: ·     modifies or expands the information as necessary to cover new items; ·     fills in any gaps; ·     corrects entries; and ·     updates data in order to make the Equipment Inventory as accurate as possible.	Due to the workload and knowledge required, it is useful for the team to be made up of: ·     two maintenance staff (from the relevant HTM team); ·     a senior equipment user from the facility; and ·     a member of staff from the department being assessed (who changes as team moves from department to department).
HTM teams	Compile the Equipment Inventory. Make hard copies.	·     Enter the data gathered, either onto an inventory card or a computer screen, for each individual device. ·     Create summaries, prepare and print out hard copies. ·     Provide a copy of the Equipment Inventory.to the Stores Controller for inclusion in the General Inventory held by stores.	Make use of trained technical staff and secretarial/computing support to assist with data entry.
Central-level HTM team	Develops the Equipment Inventory as an active (regularly updated) resource. Analyses the Equipment Inventory for planning purposes.	·     Uses computer-based tools required for this purpose (for example, word-processing spreadsheets or specific commercial inventory products which staff have been trained on.	Makes use of support from staff trained in keeping computerised records.

Asset management system

Proper asset management requires an appropriate information system which can be used to maintain data on those items that have been included in the asset register.

Equipment audits provide a snapshot of equipment status in a facility or groups of facilities, and can be aggregated to reveal the situation at national level. Audit data also serves to inform decision making related to needs assessment, asset management, maintenance strategies, replacement planning, and so on.

Also, once an inventory system is up and running, it will be necessary to periodically obtain estimates of total equipment stock values – this is used, for example, in benchmarking the total expenditure on maintenance. Flowchart 3 below shows the process for obtain such estimates.

Asset management software

It is essential to adopt and standardise on an appropriate asset management information system. There are a number of such systems available; serious consideration should be given to open-source solutions and/or or solutions which are cost-effective and sustainable, requiring minimal support.

Budgeting & financing

4.1        Estimates of budget lines for equipment expenditure

It is essential to have budget lines for health technologies/medical equipment in national, province, district and facility budgets. A process for developing budget lines is shown in Box 6.

Box 6: Process for developing budget lines for equipment expenditure

People responsible	Action
Finance officers, at all levels of the health service (central, province, district, facility)	Establish different budget lines (sub-divisions) as itemised below: a. capital funds to cover equipment replacement (depreciation); b. capital funds to cover additional new equipment requirements; c. capital funds to cover support activities which ensure equipment purchases can be used (installation, commissioning, and initial training); d. capital funds to cover pre-installation work for equipment purchases; e. capital funds to cover major rehabilitation projects; f. recurrent funds to cover equipment maintenance costs, including spare parts, service contracts, and minor works; g. recurrent funds to cover equipment operational costs, including consumable items and worn out accessories; h. recurrent funds to cover equipment-related administration, including energy requirements; and i. recurrent funds to cover ongoing training requirements.
HTM working groups	Start using these budget lines to analyse how money is allocated and spent for equipment purposes.
Health service providers	Ensure that budgets are presented by cost centre so that it is clear what allocations are made between national, provincial, district and facility levels. In this way, it can be seen what money is spent on equipment activities at each level of the health service. Lobby other bodies involved (such as Ministries of Finance, Public Works) to also show equipment expenditures to establish what is allocated by other agencies for equipment activities in the health service.

The high-level budgets thus obtained can then be “unpacked” into more detailed line expenditures, such as shown in Table 1 below, with projections covering 3-5-year budget cycles.

Estimates of maintenance costs for forward planning

An important – and often neglected – expenditure category is that of maintenance, be it for medical equipment or healthcare technologies and infrastructure in general. Box 7 unpacks the maintenance line item to indicate the various categories of maintenance-related expenditure for medical equipment, while Flowchart 4 suggests a process for estimating maintenance costs as part of planning.

Table 1: Example of a core equipment expenditure plan

Capital expenditure	Short term		Medium term
	2012	2013	2014	2015
Replacement	Use calculations for rough estimations (see Note below)
New equipment
Support activities linked to purchases
Pre-installation
Rehabilitation
Sub-total
Recurrent expenditure
Equipment maintenance	Use calculations for rough estimations (see Note below)
Consumables
Administration
On-going training
Sub-total
Total expenditure

Note: Initially, rough estimates are used for the short- and long-term overview when preparing this Core Equipment Expenditure Plan. During annual planning the estimates are revised, using calculations for specific requirements, to obtain the Annual Equipment Budget. The experience gained from that annual revision process may mean that the long-term estimates in this Core Equipment Expenditure Plan may have to be altered, so that they are more realistic.

Box 7: Elements of annual maintenance budgets

I. Planned budgets: These allocate funds for anticipated maintenance costs, which can be derived from the following main areas of expenditure: a) spare parts – which are required regularly, determined from previous experience and any planned remedial work; b) spare parts – which are required according to planned preventive maintenance (PPM) schedules and timetables; c) maintenance materials – which are required regularly, determined by previous experience and any planned remedial work; d) maintenance materials – which are required according to PPM schedules and timetables; e) service contracts – required for any planned remedial work; f) service contracts – for breakdowns which are likely to be required, determined from previous experience; g) service contracts – required for PPM of complex equipment; h) calibration of workshop test equipment; i) replacement of tools at the end of their life; j) office material; and k) any increased maintenance requirements brought about by planned new equipment purchases under the capital expenditure budget. Note: there will be other elements which may fall under other budgets. These could include: ·       other administrative costs which are included in budgets held by other departments; ·       major repair works – in some cases the planned rehabilitation of equipment which requires major work with the purchase of substantial amounts of materials or contracts (the large sums of money required for such projects may have to fall under the capital budget); and ·       pre-installation work (such as site-preparation); this often falls under capital funds as it is linked to specific purchases.

II. Contingency budgets: In addition to planned budgets, contingency budgets also exist. These allocate funds for unplanned maintenance work, such as emergencies, or sudden breakdowns which could not be predicted.

[See Section 10.2 for further discussion on maintenance-related issues].

Estimates of consumable operating costs for forward planning

In Section A2 (Needs assessment) the importance of consumables for proper functioning and utilisation was highlighted. Since medical devices cover such a wide spectrum, the related consumables require insight and good management. A number of alternative approaches are suggested:

i. Consumption depends on the type of equipment used, the service provided, and how many patients are seen. Therefore, a rough estimation of consumable operating costs can be obtained by evaluating past usage rates/expenditures, and comparing these with expected patient loads and specific equipment usage rates per intervention.

ii. If the equipment is part of a “closed” purchasing system, the consumables are only made by one manufacturer and one is limited to a single supplier; this monopoly often increases the consumable costs. If the equipment is part of an “open” purchasing system, anyone can supply the consumables and different manufacturers’ consumables could be used; this competition brings down costs of consumable. Costs can also be kept down by using items which can be sterilised/re-used.

iii. Consumable operating costs vary according to equipment type, and can be expressed as a percentage of purchase cost or stock value, as shown by the examples below. But as the majority of equipment is likely to be technology that has low to medium consumable costs, one could use averages of 3% of the stock value for equipment with low consumable usage rates, and for others as shown in Table 2.

Table 2: Rough estimates of consumables’ operating costs for forward planning

Description	Consumable cost per year (relative to original purchase cost)
Equipment with high consumable operating costs, such as: ·       Haemodialysis machine ·       Automatic biochemical analyser ·       Automatic haematology analyser ·       Electrolyte analyser ·       Blood gas analyser	70-120%
Equipment with medium consumable operating costs, such as: ·       Conventional x-ray machine ·       Anaesthesia machine	30% 20%
·       ECG recorder, three-channel ·       Ultrasound, medical/obstetric ·       Ventilator, ICU ·       Physiological monitor ·       EEG machine	15-25%
·       Autoclave, steam ·       Incubator, baby, ICU	10-15% 5-15%
Equipment with low consumable operating costs, such as: ·       Centrifuge, electrical ·       Suction pump	5% 2-5%
·       Delivery bed ·       Operating theatre lamp ·       Slit lamp ·       Operating microscope ·       Water bath	1-2%

A different calculation is required when making specific or annual estimates. Annual operating budgets should be based on more exact estimates. These are not always easy to predict since epidemics, outbreaks, or surges in workload cannot, in most cases, be anticipated.

Generally with experience, and where standardisation of equipment is in place, the projection for equipment consumables and spare accessories becomes more predictable.

Specific or annual estimates of consumable operating costs

It is equally important to make provision for consumables on an annual basis. Flowchart 5 suggests how this could be done.

Estimates of equipment replacement costs

Equipment replacement needs to be provided for, especially in the case of complex and expensive equipment, to ensure that adequate resourcing is available at the appropriate time to ensure continuity – or at least minimal disruption – of service delivery. Flowchart 6 below suggests a process to establish estimates for replacement costs.

Rough estimates of equipment-related administrative costs for forward planning

The administrative costs associated with medical equipment are also seldom considered separately, since they are hidden within general overheads. Different countries suggest alternative approaches:

i. Administrative costs are a small percentage of any operating budget; for example:

• the biggest percentage expense is for staff, taking 50-55%;
• supplies/spares take 35-45%; and
• administration takes only 10-20%.

Thus an equipment-user department could use an average of 15% of their its total operating budget for administrative costs.

ii. For HTM teams and clinical engineering service maintenance workshops, their administrative needs are not much higher than other administrative units in health facilities. Therefore, a reasonable estimate for the administrative costs[1] for HTM teams could be calculated by taking 10-20% of their total operating budget.

iii. A starting point is to use 5% of the equipment stock value to cover equipment-related administrative costs.

1.     Requisitioning

The following checklists cover three commonly encountered scenarios:

Checklist 3: Request to purchase new equipment that is not yet in use at the institution

a. Why is it essential to have this equipment and how will it enhance the present patient care. How was this function performed before and up until this request?

b. Statistics of the patients who will be treated with this equipment.

c. Is this equipment in line with the norms of the service delivery – level of care –of the institution?

d. Accessibility to similar equipment or services in a close proximity to the Institution.

e.  Is suitable accommodation available to install the equipment (building and facilities). Is the structure suitable to carry the additional mass? This to be confirmed by the Engineering Services Manager, in writing.

f. Are there engineering services available to operate the equipment and has the availability of the service been confirmed in writing by the Engineering Services Manager, for instance:

• sufficient water pressure and flow (hot and cold);
• sufficient water pressure and flow (hot and cold);
• medical gas and compressed air (at the correct pressures and flow);
• sufficient power at the correct voltage and current levels;
• if required, a UPS system with a sufficient capacity;
• a power line-conditioning unit for sensitive electronic equipment;
• if required (for example autoclaves), is steam, condensate return and drainage available; and
• if required, is the ventilation and air-conditioning sufficient.

g. Are proper specifications available from the HTM unit or is suitable equipment available from an approved period tender?  State the tender and the item numbers.

h. Confirmation must be obtained from the Institution that they have a budget (sufficient funds) to pay for a service contract (where called for), as well as consumables and preventive and corrective maintenance of the new equipment.

i. Will not having the equipment in any way compromise patient care or safety?

Checklist 4: Request to replace existing equipment

a. Inventory of similar equipment available in the Institution.

b. Inventory of how many pieces of the type of equipment are functional.

c. Inventory of how many pieces of equipment are not functional and the reason thereof.

d. Is this equipment in line with the norms of service delivery – level of care – of the institution?

e. Reason for the condemning of the equipment, supported by a Condemning Certificate.

f. Where the replacement is a fixture for instance an x-ray machine or processor, what engineering or structural changes will be required?

g. Does the Institution have sufficient funds to purchase the equipment requested?

h. Does the Institution have a budget, sufficient funds to pay for a Comprehensive Service Contract for the equipment requested?

i. Is suitable accommodation available to install the equipment (building and facilities) and is the structure suitable to carry the additional mass? This to be confirmed by the Engineering Services Manager, in writing.

j. Are there engineering services available to operate the equipment and has the availability of the service been confirmed in writing by the Engineering Services Manager, for instance (as for above scenario – Checklist 5)?

k. Can this equipment be standardised for the reasons previously stated above?

l. Statistics of patients to be treated with the equipment requested.

m. Are there no other procedures available to treat the patients?

n. Will not having the equipment in any way compromise patient care or safety?

o.  Are there proper specifications from the Health Technology Unit available, or is suitable equipment available from an approved period tender?   State the tender and the item numbers.

Checklist 5: Request to purchase additional equipment similar to equipment already in use

a.          Inventory of similar equipment available in the Institution.

b.          Inventory of how many pieces of the type of equipment are functional.

c.          Inventory of how many pieces of the type of equipment are not functional and the reason therefore.

d.          Is this equipment in line with the norms of service delivery – level of care - of the institution?

e.          Reason for requesting the additional equipment backed up with patient statistics.  Has the function or status of the Institution changed?

f.           Does the institution have sufficient funds to purchase the equipment?

g.          Does the institution have a budget, sufficient funds to pay for a comprehensive service contract for the equipment requested?

h.          Can this equipment be standardised for the reasons previously stated?

i.           Are there no other procedures available to treat the patients?

j.           Will not having the equipment in any way compromise patient care or safety? Are there proper specifications available from the Health Technology Unit or is suitable equipment available from an approved period tender.   State the tender and item numbers?

2.     Procurement

6.1        Introduction

Procurement, from a healthcare service perspective, is probably the most important activity within the medical equipment life-cycle. If the right (competent) people are driving a transparent, criteria-driven (not interest-driven) process, it is likely that the healthcare system will avail itself of the technology that is most appropriate to the intended application, while addressing issues around effectiveness, cost-of-ownership, institutional fit, technology maturity and compatibility, user competence, maintenance and so on. In many countries, procurement is being placed in the hands of generic supply-chain management personnel with little specialised knowledge of medical equipment specifically, and health technologies in general. It is therefore essential to ensure that a supporting environment is created to minimise the possibility of sub-optimal procurement outcomes.

Procurement (for capital equipment as opposed to consumables) should be seen as a process with two phases: one that commences with planning and needs assessment and ends with commissioning, and the other that extends over its operational lifetime and ensures that the equipment is provided with the necessary accessories, consumables, maintenance support, and so on.

There are four reasons for procuring equipment, each of which provides a different goal which will dictate when to acquire equipment. These can be placed in the following order of priority (see Box 8 below). Within each of the four categories shown, priorities will have to be set, and these can be based on appropriate indicators.

Box 8: Example of valid reasons and order of priority for purchasing of equipment

1. To cover depreciation of equipment.	Equipment is replaced as it reaches the end of its life and is taken out of service. This is necessary in order for the level of healthcare that is currently delivered to be sustained. [Note: This means that the size of the existing equipment stock remains the same, and does not imply an expansion of the health service.]
2. To obtain additional equipment items which are missing from the basic standard requirements.	Additional equipment may be required in order to provide a basic standard level of care. [Note: Missing items are identified by comparing the Equipment Inventory with the Standard Equipment List for the facility.]
3. To obtain additional equipment items beyond the basic standard.	This is done in order to upgrade the level of health service provided by the hospital. For example, new equipment may be needed to provide a new service, build a new special unit, or increase the level of care offered.
4. To obtain additional equipment items outside the facility’s own plans.	This will only be applicable if the additional items have been called for by directives from the national or provincial ministry, and cannot be stopped/refused for political reasons, such as “out of the ordinary”, high profile, or political projects.

Of course, procurement is not a self-contained, isolated process but links up with many other equipment-related processes; these are shown in Box 9 below.