Surgical tech investment – It’s not just about the bottom line

Several years ago, when I was CEO of Beth Israel Deaconess Medical Center, I was having a conversation with my CFO on the topic of a potential major tech investment that was sitting on my desk and was awaiting a “go-no go” decision.

The vendor had made a persuasive case that bottom-line impact of the investment was likely to be positive, but the CFO – of all people in the C-Suite – wasn’t moved. “That’s great and all,” he said, “but I can’t plan for potential cost-savings in next year’s budget. So, thanks – but no thanks.”

He was absolutely right. Cost-savings from technology – despite the ROI forecasts or case studies – isn’t the type of line item that you can plan for in a strategic budget for hospitals. Whether or not a given technology actually saves the hospital money, the savings are very difficult to track, and nearly impossible, to plan for.

Contrast this anecdote with the all-too-often mistaken assumption on the part of medical technologists: namely, that hospital executives are concerned above all else with the cost-savings potential in their technology investments.

So, what actually moves the meter when it comes to technology investments?

Interestingly, the more tangible benefits may just be the top-line benefits. Here’s why:

Quality is king
As we transition to value-based healthcare reimbursement models in the U.S. and abroad, a hospital’s viability will be based more objectively on quality. Quality of outcomes, in the OR and after discharge, will translate to achieved reimbursements, and thus net revenue. So, your tech investments – and particularly those in the surgery department, which accounts for a substantial share a hospital’s net revenue – should be measured on their ability to improve quality of care and ensure reimbursement.

Top-line is made of top-talent
Fortunately, there is a symbiotic relationship between achieving higher value care and the motivation of top flight surgeons. If you’re talking about surgery – the front line of value-based care – there’s no greater asset to your hospital than a full bench of top-performing surgeons. Of course, your surgical team should ideally consist of acknowledged experts in their respective surgical sub-specialties. But, more than just technical service providers, your top surgeons are serious about quality and are eager to become champions of quality improvement initiatives. This brand of surgeons, especially younger ones looking to advance their careers or partake in advanced training programs, will be drawn to hospitals that embrace proven new technologies and employ those technologies to perform higher-profile cases.

Reputation counts
Taken in total, your hospital’s reputation, quality of care, and its ability to draw top-talent are directly impacted by your choice of tech investments and the degree to which you emphasize technological prowess as a hallmark of your institution. Of course, reducing both cost and resource waste is a necessary component of being an effective hospital executive. But when it comes to tech investments, keep in mind that the value of a given technology is not just measured in the bottom-line.


Paul Levy is a senior member of the advisory board of caresyntax, a surgical data, analytics and automation company. He previously served as Chief Executive Officer and President of Beth Israel Deaconess Medical Center, Inc. from January 2002 to January 2011.

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