How does this happen? Surely the physician really thought the equipment would be a good investment. But where were the checks and balances? Who decided that this was a better investment than some other – possibly already approved – capital item? Did anyone actually investigate?

One answer to this problem is an emerging best practice: Establishing a technology assessment program for the institution.

What is technology assessment?
Here is my definition: Technology assessment (TA) is a process of reviewing new and emerging technologies to determine potential benefits and risks to a particular organization and basing purchasing decisions on those findings.

It includes these components:
• An objective review of any high-dollar equipment or supplies that are related to very new or emerging technologies
• Performed by a very high-level team within the institution
• To rationally decide if the supplies or equipment should be purchased at this time
• And what restrictions, if any, should be put on its use.

What it is not
Technology assessment is not an extension of the value analysis team. The TA team should use value analysis tools and techniques. But the TA scope is very specific and outside the normal value analysis team charter. Likewise, TA is not an extension of the capital equipment committee. The capital group considers replacement and mainstream technology equipment while the TA group only focuses on emerging, usually very high cost technologies. Further, TA is not limited to decisions around computer systems. In fact, the work of the TA team would probably not include most computer system decisions.

Suggested team members
One of the keys to an effective technology assessment program is the makeup of the team who will be making the decisions. This needs to be a very high-level team including the most powerful and influential leaders of the organization. Team members should be selected based on their titles as well as their ability to be objective, open-minded and thorough. They should be respected by their peers and the organization as a whole. The actual members will vary by organization. One suggested team would include:
• CEO (or possibly COO) – Probably as the team leader. TA decisions are strategic in nature and the leader of the organization needs to be involved.
• CFO – These decisions have significant financial impact and the CFO needs to be part of the deliberations. Not only will the purchase entail a large expenditure, but there are frequently significant revenue implications.
• Vice president, marketing – There are typically a number of issues around patient demographics, market share, positioning within the community, etc.
• Vice president, medical affairs – To represent the medical staff as a whole.
• Chief of surgery and chief of radiology – These individuals represent the two services that are most likely to be requesting the types of items that will go through the team.
• CIO – Because so much emerging technology now has a computer base.
• Director, clinical engineering – The resident expert on maintaining complex equipment, this individual usually has a good understanding of emerging technology and what else might be in the pipeline.
• Director, materials management – The resident expert on vendor relations and negotiations should be at the table.

A different outlook
To make an informed decision this team needs to gather a lot of information and answer some very difficult questions. Many of the questions are the same that should be asked before approving a regular piece of capital equipment. These are questions like: Where will we put it, will it require construction, what disposable supplies will it need and at what cost? But more important are the questions that go beyond the normal. The following is a partial list of the types of questions that have to be answered:
• Strategic - Does the proposed new technology enhance the organization’s mission? Does it contribute to the strategic plan?
• State of the art – How mature is the technology? Are there other similar technologies under development that may prove to be better? Where is it being used now (in the U.S./outside of the U.S.)? Is it FDA approved? If not, where is it in the approval process?
• Financial – Will the new technology be reimbursable immediately? If not, is it anticipated that it will be in the reasonable future?
• What other expenditures may have to be delayed or denied in order to purchase this? Will it ultimately have a positive or negative effect on the bottom line?
• Expected benefits – Is the technology an improvement over older technologies? More cost effective? Better patient outcomes? Less pain and suffering?
• Population – What is the target population? How large is it in our capture area? Would this technology effectively expand our capture area and increase the potential patient pool?
• Staffing – Does the equipment require specially trained or certified staff? How available are these staff members? How available and expensive is the training? Will staff compensation be higher than "normal" staff?
• Current technology – How is the function being provided now? What will happen with the existing technology? Can it be used elsewhere? Is it still needed in the present application? Can it be remarketed?
• Competitive impact – Will the new technology have a marketing impact? Will it improve the competitive position of the hospital? If we don’t acquire it, might the competition gain an advantage? Will it help us keep existing or attract additional physicians? Might physicians leave if we do not acquire it?