Business

A Look At How Kaiser Permanente Saved $8.6 Million

Dr. Ronald Loo, Kaiser Permenante Inter-Regional Chiefs of Urology and Co-Lead of Kaiser Permanente Health Innovation team, opened up on the medical device installation and health services company managed to save up millions without resorting to the usual techniques that most healthcare providers resort to.

The company has an old program, made about a decade in the past, when the company first started up with a procedure centre. As a practicing urologist, the centre needed a shock wave machine, a machine that breaks up kidney stones via sound waves. Each machine costs about half a million dollars, and typically only sees use once a week.

Finding that model to be wasteful, Loo investigated and found sister centres in the area that were renting the same equipment, and came up with the idea to share the machine that they own so taht each centre would have access to the machine on a given day. They even brought in logistics exports to handle medical device installation and relocation. The first year of operations, that system, dubbed the “Loo-Haul”, managed to save Kaiser half-million dollars in savings.

Following the initial success of the program, the company opted to improve on the program, changing into something akin to Amazon Prime; centres that need a device would order it for a specific date, then the centres will get them. The aim was to allow clinicians to be able go into a system and order it, easier than just picking up the phone and renting equipment.

To that end, Kaiser Permanente partnered up with Cohealo. The partnership started out with a pilot with several service areas with 5 facilities. Following the success of system, the program was then expanded, now including 4 million members and some 15 medical centres across several hundred locations.

The initial aims  of the medical device installation and scheduling program was to avoid rental costs and capital spending on new equipment, but, over the last two years of operation, the program managed to save Kaiser $8.6 million. On top of that, Loo says, the program made the company aware of how often medical equipment is used, where it can be used, and a lot of data on utilization and asset management.