In the past three years, China's medical device industry has undergone a major reshuffle. The continuous price reduction of medical consumables has led to hospitals in every province being taken over and reducing the number of suppliers. Nowadays, hospitals are not only lowering the ratio of drug prices but also the ratio of consumables. They are implementing payment based on disease types. What is more serious is that the two-invoice system for medical consumables will increase the concentration of commercial distribution. The replacement of business tax with value-added tax and the third phase of the Golden Tax Project will lead to over 80% of small and medium-sized medical consumables and enterprises facing transformation or being directly eliminated. Under the harsh market environment and the influence of policies, where is the next growth point for medical devices? The answer is - after-sales maintenance service for medical device tubes.
Redesign, with profits pushed back
Since 2002, due to severe product homogenization and fierce market competition, the transaction prices of products have continued to decline. To change this situation, well-known foreign large-scale medical equipment manufacturing enterprises represented by GE, Siemens and Philips have keenly noticed that due to the core technology and the supply control of spare parts being in the hands of the manufacturers, the manufacturers have the initiative in the after-sales maintenance control of medical equipment. The maintenance costs quoted by the manufacturers have no way for hospitals to bargain, because the CT purchased at a cost of tens of millions MRI cannot just be left idle. As a result, the teams of maintenance engineers from GE, Siemens and Philips have been growing larger and larger. Wang Qiang, the author, believes that the hospital equipment department is constrained by a lack of manpower, funds, staffing, low pay and weak technical strength, which has gradually marginalized it in the medical equipment maintenance market. It is precisely because of the existence of the above elements that the after-sales maintenance of well-known foreign large-scale medical equipment consumption enterprises represented by GE, Siemens and Philips once became the main source of their profits.
The current situation of the after-sales maintenance market for medical devices in China
At present, the capacity of the after-sales maintenance market for medical devices in China is 100 billion yuan. 70% of the market share is occupied by consumer manufacturers, especially for large medical equipment. The remaining 30% of the market share is occupied by hospital equipment departments and third-party medical device maintenance companies.
"Emphasizing procurement while neglecting prevention and maintenance" is a notable feature of China's medical device after-sales maintenance market. The hospital is troubled by problems such as the complexity of the grade evaluation work, the shortage of manpower in the equipment department, and the high cost of maintaining large equipment. At the same time, the safety inspection of medical equipment is not thorough. Operating equipment while faulty or with distorted performance can lead to 17% of medical accidents.
At present, there are over 20,000 hospitals in China. In most top-tier hospitals, the number of staff in the equipment department is generally around 10. From the repair of small items like computers and printers to the reporting of malfunctions of high-priced and complex instruments such as four-dimensional B-ultrasound, CT, linear accelerators, and digital gastrointestinal machines, as well as the liaison for after-sales service, all fall within the purview of the equipment department. Taking a hospital with equipment assets of around 500 million yuan as an example, the average amount of equipment managed by each equipment department staff member exceeds 50 million yuan, and the number of equipment units exceeds 1,000.
Under the circumstances of a shortage of manpower, limited funds, weak technical skills, time and efficiency (fixing the same problem, professional companies have complete spare parts and tools, and it only takes three days, while the entire process from purchasing spare parts to customizing tools in the hospital's equipment department takes at least a month), 80% of the hospital's money can only be invested in the maintenance and repair of 20% of high-end and large-scale medical equipment. The remaining 80% of medical equipment is fundamentally not cared for or maintained and is left unattended. Especially in small and medium-sized hospitals, if medical equipment is not maintained for a long time, it will increase the surgical risks for patients and lead to 17% of medical accidents. This is the reason why the drug Administration implemented Order No. 18 on February 1, 2017.
In the 1970s, many European and American countries began to manage the after-sales service of medical equipment in various ways and through multiple channels. In the United States, 50% of hospitals entrusted the overall management to third-party medical device maintenance service companies. The direct benefit this measure brings to the hospital is a significant improvement in management efficiency, an extension of the service life of medical equipment, and an increase in efficiency. Hospitals can then "travel light" and focus on their medical services without being "distracted" by these trivial matters. A large number of medical equipment maintenance professionals provide professional services in hospitals. They perform maintenance, upkeep and inspection on hospital machines every day to ensure the smooth operation of medical equipment to the greatest extent.
At present, the maintenance channels for medical equipment in hospitals are as follows: one is for the hospital's equipment department to carry out the maintenance, and the other is for the original manufacturing enterprises of the medical devices to do the maintenance. The third option is to have it repaired by a third-party medical device equipment maintenance institution. Third-party medical device equipment maintenance institutions can be further classified into three categories. The first category consists of companies that are themselves agents of medical equipment and have obtained the maintenance qualifications authorized by the manufacturers. The second category specializes in the maintenance of medical equipment.
The third category consists of companies providing overall maintenance and management services for hospital medical equipment. In the author's opinion, these companies are essentially maintenance industry platforms. As such platforms, they integrate the upstream and downstream of the professional industrial chain, including hospitals, manufacturers, and third parties, to complete the integration of spare parts channels, connect all the links of the maintenance industry, and form a complex, operational closed-loop service model.
At present, representative companies of third-party medical device equipment maintenance institutions include Ankangli Medical, Shanghai Kedu, Shanghai Kunya, and Shanghai Pharmaceuticals Sunick, as well as regional companies such as Anhui Yixing Medical.
The medical equipment maintenance market is undergoing changes along with the competitive landscape of the industry
In the past three years, there have been more than ten domestic brands of large-scale CT and MRI equipment. New forces such as Suzhou Langrun and Shanghai United Imaging have emerged, along with established manufacturers like Wandong and Neusoft. Kangda Medical has joined hands with Hitachi to form a strategic alliance and jointly focus on the CT and MRI fields. With a strategy of high quality and low price, Kangda Medical has made the market price of 2.0 MRI below 5 million yuan. The author believes that the market share of GE, Siemens and Philips in the medical field is gradually shrinking, and at the same time, the medical equipment maintenance market they have occupied is also being lost. Under such circumstances, domestic brands like Suzhou Langrun and the third-party medical equipment maintenance institution Ankangli Medical have formed a strategic alliance to jointly explore the market. The "Order No. 18" issued by the State Food and Drug Administration on February 1, 2016, has brought a great opportunity for the development of third-party medical device equipment maintenance institutions.
Order No. 18: Quality Supervision and Management Methods for the Application of Medical Devices
The background of the promulgation of the "Order No. 18" issued by the State Food and Drug Administration on February 1, 2016, namely the "Measures for the Quality Supervision and Administration of the Use of Medical Devices", is that the channels for hospitals to purchase medical devices are not standardized and the work of obtaining certificates and invoices is not rigorous still exists. Many hospitals ignore the maintenance and repair of medical equipment, resulting in cases where patients are injured from time to time. The author believes that Order No. 18, through strict quality inspection and management requirements, enhanced maintenance and repair management, improved management of the transfer and donation of in-use medical devices, and strengthened classified and credit-based supervision, urges medical device user units to establish and implement a medical device usage management system covering the entire quality management process. The promulgation of Order No. 18 has further enriched the supporting regulatory system of the "Regulations on the Supervision and Administration of Medical Devices", which is of great significance for strengthening the supervision and administration of medical devices and ensuring the safety of device use.
The significance of the promulgation of Order No. 18 can be analyzed from three aspects. First, the regulatory authorities put forward detailed and specific rules for the procurement, acceptance, storage, use, maintenance and transfer of medical equipment in hospitals, as well as the supervision and management, and the legal obligations that medical device user units should undertake, to monitor and manage the entire process of medical devices. Second, improve the management of medical device transfer and donation, as well as strengthen classified supervision and credit supervision. Third, the state should break through monopolies from the top-level design of industries. Order No. 18 clearly stipulates the legal position of third-party after-sales service companies to undertake the maintenance and upkeep of hospital equipment. The aim is to create more intense competition in the market and benefit the people and hospitals.
The overall trusteeship plan for equipment assets of third-party hospitals is the future development trend
Third-party hospital equipment asset overall trusteeship plans will become a future development trend: Firstly, previously, hospitals had to sign separate maintenance contracts with each large equipment maintenance provider, and the total management cost was extremely high. Overall hosting can at least reduce the equipment management costs for hospitals by 10%.
Secondly, in the equipment purchase and maintenance market, individual hospitals have always been independent entities and cannot enjoy "generalized" price discounts. The advantage of overall management lies in the fact that, in the author's opinion, in addition to providing more professional services for equipment maintenance and care, due to the resources of multiple hospitals, Companies providing hosting services can have more bargaining power in the equipment procurement process, thereby securing lower purchase prices.
Thirdly, the overall management service companies have changed the previous situation of price competition between hospitals and third-party maintenance companies. The overall management plan for hospital equipment assets by third-party hospitals enables both hospitals and the management parties to have a common goal: to maintain the daily operation of medical equipment, reduce the failure rate, extend the service life of medical equipment, and thereby improve efficiency.
The implementation of the overall custody plan for equipment assets of third-party hospitals is divided into the following four steps:
Step 1: The custodian will establish electronic files for all medical devices, meaning that all information will be stored in the electronic system and will not be lost.
Step 2: The entire system fully tracks and records the management process. This system also has a mobile APP. When combined with the mobile APP, it is convenient to use. The advanced information management form enables all equipment data in the hospital to be traceable. Equipment maintenance and repair can be tracked throughout the process. Through the system's work prompts and periodic information warnings, the operation status of all equipment can be better monitored.
Step 3: Enhance the safety management of medical equipment in hospitals. The asset management software can automatically generate the annual maintenance time for each medical device. The system will notify the on-site engineer ten days in advance. The engineer needs to regularly maintain, service and inspect the medical equipment in the hospital to ensure that each device operates well to the greatest extent. At the same time, a strict system and mechanism should be established in terms of maintenance, care, inspection, measurement, quality control and benefit analysis, which can fully ensure the daily operation of medical equipment in the hospital.
Step 4: Enhance the separation of internal and external training within the hospital. The entrusted institution can invite engineers from top-tier hospitals such as 301 Hospital to conduct training at the hospital, or organize hospital engineers to regularly visit Shanghai for training. To achieve professional application training, improve the efficiency of equipment utilization, and better enhance the hospital's diagnosis and treatment level.
The overall custody plan for hospital equipment ball management service assets is actually a comprehensive solution for the intelligent, digital, efficient and professional management of the entire life cycle of hospital medical equipment ball management service assets. An overall handling plan covering multiple businesses such as equipment maintenance and repair, hospital equipment selection, equipment application training, new project launch, equipment renewal and replacement, and equipment leasing. Wang Qiang, the author, believes that its fundamental core is to relieve the pressure on hospitals in terms of equipment asset management, thereby enhancing the operational efficiency of hospitals in medical services. This requires the service provider to possess capabilities such as technical reserves, human resources, network distribution, capital raising, spare parts channels, and Internet technology. "Saving time, effort, worry and money" is the result of implementing the overall custody plan for hospital medical equipment assets.
The future development trend of the medical device maintenance market
Since 2013, enterprises engaged in large-scale radiological imaging have successively launched imaging clouds, and there are also cloud after-sales service platforms for the maintenance of medical devices. Relying on the Internet + and big data, the "cloud after-sales service" era has begun.
Kangda Medical, a company specializing in large-scale radiological imaging and oral products, has developed a traceability system that covers the product life cycle based on the Internet of Things. In the future, every complete machine consumed will be a node of the Internet of Things. Companies can monitor the devices on each node and even each component on the devices, as well as the operation status of medical equipment. For instance, if it is detected that the CT tube has been exposed 150,000 times, engineers can conduct an early inspection and regular maintenance of the CT tube, and update aging parts. Re-provide a good working environment for the core component of the ball tube, thereby extending the service life of the ball tube, completing remote after-sales service, and also providing technical guarantee for the monitoring and supervision of the equipment.
At the 77th CMEF exhibition held in Shanghai, GE Healthcare first launched a medical equipment management application based on the "cloud" platform - "Asset Cloud Manager". GE Asset Cloud Manager separates the corresponding maintenance and dispatching processes of GE from the hospital's own demand management system, optimizing such a management platform. Through the analysis of intelligent optimization data in finance, operation and clinical aspects, it helps hospitals to better optimize the installation and maintenance of medical equipment. Assist doctors and hospitals in enhancing efficiency and reducing operating costs.