UPMC's New Equipment Depot Reduces Rental Costs

By Marilyn Pfaff

UPMC will save about $1.5 million over the next five years after creating a depot where specialty beds and clinical equipment can be stored, cleaned and serviced instead of rented from multiple vendors.

The UPMC Equipment Depot, located in the South Side Distribution Center (SSDC), was created this year by UPMC's Supply Chain Management to help reduce expenses for rental equipment and better control inventory. Medical equipment offered by the depot includes low beds, bariatric beds, air mattresses and pumps, and bariatric air mattresses and pumps. 

The initial monthly savings calculations show positive results. When comparing the historic daily rental rates paid to outside vendors to the actual operating costs of the new Equipment Depot, the Equipment Depot generated $98,000 in savings in September 2012 and $129,000 in October 2012. The depot is expected to break even within 18 to 24 months.

In addition to promising financial results, the time from order placement to delivery has significantly improved. Previously, rental orders were fulfilled within four hours for emergency orders, and up to 24 hours for nonemergency orders. Now, many of UPMC’s larger hospitals have designated Equipment Depot storage areas where a set of equipment is kept, enabling turnaround times that are now averaging between 30 and 45 minutes per order.

The UPMC Equipment Depot team also tracks the locations of clinical equipment as it moves from one facility to the next. To accomplish this, the Equipment Depot Project Team has partnered with AeroScout to fit each piece of equipment with a radio-frequency identification tag. These tags emit a signal when entering or exiting the receiving dock at the hospitals or SSDC, and that signal will register on the network and update the location of the equipment in the tracking system.

UPMC Mercy and UPMC Shadyside were the first two hospitals to go live with the Equipment Depot in August 2012. The service was introduced to other Pittsburgh-based hospitals over a period of three months. As of early November, all of the Pittsburgh-based hospitals are now using the Equipment Depot. Approximately 300 Equipment Depot devices are being utilized by UPMC hospitals.