What Works
Bed rental vs purchase:
Profiting from a capital purchase

with Tamara B. Owen

In 2005, U.S. hospitals posted their highest profits ever; approximately $26 billion with a 1% increase in margins over the previous year1. Kaleida Health System partnered with Stryker Medical, a division of Stryker Corporation, on a multi-million dollar capital purchase to improve patient outcomes while also advancing their financial health.

Kaleida set out to accomplish both with increased focus on the following three areas: reduction of specialty bed rentals, institution of patient and employee safety initiatives, and better outcomes with wound care. Nearly one year after the decision to go with Stryker, caregivers and executives at Kaleida say the results have exceeded their goals and expectations.

Kaleida Health is the largest health care provider in Western New York. More than one million patient visits are recorded annually at the Buffalo General Hospital, DeGraff Memorial Hospital, Millard Fillmore Gates Circle Hospital, Millard Fillmore Suburban Hospital, Women and Children’s Hospital of Buffalo, plus the health system’s 99 clinics and community health care centers. It also includes the Deaconess Center and Waterfront long-term care facilities, plus the nation’s oldest – and original - Visiting Nursing Association. Kaleida Health’s economic impact on Western New York exceeds $2.2 billion annually.

A results-oriented partnership

According to Kaleida’s vice president of physician contracting Tamara B. Owen, the relationship between Kaleida and Stryker has been extremely successful.

"Kaleida looked for a global solution to a multi-factorial problem. We were experiencing high workers’ compensation costs from caregiver injuries related to caring for patients, annual bed rental costs of more than $1 million per year, continuing rise of costs associated with nosocomial pressure ulcers and the need for new beds and patient room furniture throughout our five acute care hospitals and four long term care facilities," Owen said. 

"With such mounting concerns, it was absolutely critical that we not only choose the best products but also the best service in the market. Stryker competed in a very competitive process and was selected as the vendor to partner with by our selection team of nurses, administrators, biomedical and purchasing representatives. Since making that decision we have never looked back. Stryker worked with us through every step of this initiative and continues to support our needs, now almost two years following the outset of this initiative. Our nurses, physicians, therapists and patients have been very complimentary of the technology and service provided by Stryker. Kaleida and Stryker achieved a very successful partnership."

Pete Simonian, Stryker Medical account manager covering the Kaleida Health System, had a similar perspective. "It took three years to earn an opportunity to show our value as a partner to Kaleida. Based on three years worth of observing, I knew that Kaleida had patient fall and caregiver injury challenges. In 2004, new administration granted me the opportunity to conduct a system wide [five hospitals] equipment analysis and present Stryker’s solutions. I also discovered that Kaleida had significant challenges with wound and pulmonary care outcomes, and was doing a mammoth amount of rentals to address them temporarily," Simonian said.

A successful aternative to rentals

With Kaleida’s annual bed rental costs at nearly $1 million per year, executives and caregivers were searching for a solution that would help save money while continuing to provide superior care to patients.

In 2005, Kaleida’s rental rates ranged from $24 to $140 per day, per specialty bed product, resulting in an annual expenditure of $1,107,790. Kaleida primarily rented specialty bed products to address wound care, pulmonary and bariatric needs. About 26% of Kaleida’s total rental dollars were spent on patients’ wound care needs, about 63% on pulmonary needs and about 11% on addressing the needs of its bariatric population.

Like other hospitals nationwide, Kaleida’s vendor for specialty product rentals used the hospital system’s historical annual usage to determine the maximum payment amount per year. The vendor offered to cap Kaleida’s 2006 payments at 75% of 2005’s usage, or for a total amount of $825,000. This amounted to a monthly payment of $68,750. The vendor would require Kaleida to make the monthly payment regardless of its actual usage. Many executives and caregivers at Kaleida questioned the need to continue to rent such a large number of specialty products.

Kaleida determined the answer to helping curb these high rental costs was to purchase pulmonary sleep surfaces from Stryker. Stryker’s XPRT therapeutic pulmonary sleep surface combines wound care prevention and treatment with functions such as pressure relief and low air-loss, pulmonary capabilities and nurse-assist functions, in an easy-to-use package. The turn-assist and max inflate functions provide valuable assistance when positioning and tending to patients’ needs – helping reduce strain on caregivers and prevent potential injuries. Kaleida also purchased Isoflex pressure relieving mattresses.

Since the purchase from Stryker, Kaleida is on track to reduce its annual rentals by $800,000 – a 73% reduction in dollars spent on specialty bed rentals. Kaleida will pay back its entire purchase in 3.4 years and continue to receive a 29% annual return on investment. Although Kaleida still rents some products for the most specialized cases, it is on pace to save $4 million in specialty bed rental dollars over the next five years.

Kaleida’s "no-lift" policy

Kaleida has spent about $16 million annually on workers’ compensation injuries; 64% of the costs are directly related to strains from lifting or moving patients or residents. Kaleida’s internal statistics showed that during the course of a year, nurses and other caregivers lifted patients 2.2 million times.

In 2005, Kaleida initiated a corporate focus on employee and patient safety. A central component of this focus was making the entire patient care service a "No-Lift" environment. The goal was to introduce the use of new mechanical technology and eliminate the need for healthcare professionals to physically move patients and residents from one surface to another.

The "No-Lift" initiative consisted of two primary components:

1. The purchase of patient movement devices such as full-body lifts, sit-to-stand lifts, frictionless slide sheets and boards, hover mats and wheelchairs.

2. The purchase of new beds, stretchers and
furniture for patient rooms.

All the products place a technological emphasis on "ease of patient movement" for both caregivers and patients. Stryker’s hospital beds, equipped with ergonomic support features like in-bed scales and sleep surfaces with nurse-assist capabilities, were a perfect complement to the "No-Lift" program.

Kaleida purchased Stryker Secure II beds for the entire system. The beds allow caregivers to accurately weigh patients in any position, which helps reduce the need to reposition patients. In addition, the intermediate siderail position on the Secure II eliminates the need to boost patients up in bed. This is a key safety feature since, according to the Department of Labor, 40 to 50% of annual nursing back injuries occur when repositioning patients in the bed2.

Kaleida also purchased several Stryker Zoom motorized stretchers to assist in patient transport. The Zoom stretcher virtually eliminates the start-up and push force required for patient transport3. And for labor and delivery rooms, the Stryker LD304 birthing bed was purchased. The birthing bed offers a slide-off foot section, the Lock-Rite, which eliminates the need to lift the foot section off the bed, a motion that may compromise nurses’ backs. The Lock-Rite foot section has been proven to reduce the risk of a lower back disorder by 63% 4.

Though the "No-Lift" initiative has not been completely implemented at all of the facilities, it has already shown an impressive 68% reduction in lifting injuries. This is a reduction of 129 lifting injuries with associated lost workdays in 2004, to just 41 lifting injuries in 2005. This change is derived from data compiled at Kaleida’s four long-term care sites and three of its five hospitals. The other two hospitals will go live with "No-Lift" policies in the third quarter of 2006.

Since 54% of Kaleida’s workers’ compensation claims are a result of sprains and strains from lifting, this new policy aims to not only keep the employees safer, but also to significantly reduce the cost of compensation claims, which means a healthier financial future for Kaleida.

According to an article published in Safety and Health magazine in May 1996, the National Safety Council estimated that the average cost per employee back injury to a hospital is $24,000. This takes the following factors into consideration:

• Workers compensation paid and increased rates

• Replacement per-diem, overtime or additional staff

• Health-related costs, hospital rehabilitation

• Potential litigation

• Loss of productivity

• Reduced employee moral

• Equipment replacement or repair

Based on these nationally-accepted figures, Kaleida could save as much as $2.1 million by reducing lifting injuries 68% from 129 to 415.

Improving wound care outcomes

Wound care costs the U.S. healthcare system more than $20 billion each year6. Part of Kaleida’s cost to treat wound care patients came from specialty bed rentals. Since purchasing XPRT and Isoflex sleep surfaces to help prevent and treat pressure ulcers, Kaleida has experienced positive outcomes. Margaret Schlotterbeck, nurse manager of the Surgical Intensive Care Unit (SICU) at Buffalo General Hospital (part of the Kaleida Health System), was a proponent of Stryker’s surface solutions.

"In critical care, we knew we needed to replace our mattresses. The air mattresses we were using were ineffective and costly. We trialed both Stryker and [a competitor]; after evaluating both products, we chose the Stryker surface. The staff felt Stryker had a better product that was more user-friendly," Schlotterbeck said. 

"The Isoflex mattress met all the requirements our wound and skin expert felt we needed to help decrease skin breakdown. The XPRT mattress was chosen because its rotation range included rotating the hips and chest so patients could be off their backs the majority of the time. XPRT also offered superior wound care to our patients because of its pressure relief and low air-loss capabilities."

According to Schlotterbeck, cost was also a major driver in the decision to go with Stryker. "We knew we could save money because we will own our mattresses rather than renting surfaces, as we had done previously."

Schlotterbeck noted that Kaleida plans to redevelop a pressure ulcer measurement tool for use system-wide, and will pilot in the Surgical and Medical ICUs. This will help Kaleida capture more specific data about pressure ulcers. Even without this tool, Schlotterbeck already noticed the difference Stryker products were making in her unit. "Overall, the patients’ skin in my unit has improved and I have even had patients comment on how comfortable the beds are, which is amazing since most patients don’t remember much of their stay," she said.

Progressive vision

Having similar progressive visions in the improvement of healthcare helped pave the way for, and will continue to strengthen, the partnership between Kaleida and Stryker. Kaleida is on course to continue to fulfill its mission of delivering exceptional care, education and research throughout the communities it serves and caregivers at Kaleida will be able to focus their time and energy on their ultimate priority – caring for patients. HPN

References:

1. American Hospital Association, Modern Health Magazine, January 2006.

2. U.S. Department of Labor, Bureau of Labor Statistics, 2000.

3. Anderson, Gary and Alexian Brothers Hospital Network, "An Evaluation of the Stryker® Motorized Zoom® Stretcher vs. Standard Transport Stretchers," St. Alexius Medical Center, October 2003.

4. Fredericks, Tycho K., Steven E. Butt, Anil R. Kumar and Supreeta Amin, "Biomechanical Analyses of Nurses using the Foot Section of Birthing Beds of Different Designs." Proceedings of the 10th Annual International Conference on Industrial Engineering – Theory, Applications and Practice, December 4, 2005.

5. National Safety Council, Safety and Health Magazine May 1996.

6. Jackson, Stuart and Jeffrey Stevens, "The Future of Wound Care." Business Strategies for Medical Technology Executives, January/February 2006.