By Tom Watson
The foundational parameters of service agreements for imaging technology have not changed dramatically in the past 12–24 months.
The trends over the past three to five years have shown vendors enhancing their service offerings to be much more tailored to specific needs of the client. Prior to this there were basic, routine and extended level agreements with little to no customization.
Now, service offerings generally consist of four to six different levels of support with optional coverages that can be included or excluded to tailor the coverage to the client’s needs. Below are a few of the many optional coverages that may be selected:
• Custom hours of coverage
• Preventive Maintenance scheduled to work around normal utilization scheduling
• Real-time, online monitoring to identify problems emerging, but before outright failure occurs
• Virus protection
• Coverage of special options and accessories
• Additional training both online and on-site
• Damage or accidental coverage for components that previously were covered only for normal failure
Driven in part by mergers and acquisitions, we are seeing an increase in strategic consolidation of multiple imaging contracts, particularly with the same vendor, into a master service agreement. This provides the advantage of leveraging enterprise-wide visualization of the total operational expense for medical technology support. Further, it allows coordination of co-terminus contract management with a single point of focus.
Historically, service contract consideration and decisions were disparate and siloed, with little or no coordination to ensure oversight and management with a strategic focus. The result has been in-the-moment decisions with very little long-term or enterprise-wide implications.
Imaging is a key area of focus for several reasons. Much of the technology is based on radiation-emitting, highly complex solutions that require specialized training, software diagnostics and, in most cases, service from either the OEM vendor or a well-qualified third-party service support company. Some are moving to a more risk-based approach with in-house support or excluding high-cost support items such as X-ray tubes and/or detectors. Often consolidation allows for pooling of high-dollar items that provide a specific number of replacements annually without having to pay full price for high-priced items for every covered system.
Most healthcare organizations use OEM service or very highly qualified third-party support for CT scanner maintenance. It is very rare for organizations to go at risk (without service agreement), and full-service plans are the most commonly considered. The annual price range for service support is $56,000 to $195,000, with an average of about $125,000 across all vendors and models. Items that greatly impact pricing include X-ray tubes, detectors, principal coverage period (PCP) hours, and uninterrupted power supply (UPS) units.
Like with CT, most healthcare organizations use OEM service or very highly qualified third-party support to maintain their MR scanners and it is very rare for organizations to go without a service agreement. The annual price range for service support is higher than CT, ranging from $90,000 to $150,000, but the average cost across all vendors and models is also about $125,000. Along with PCP and UPS units, cost drivers of MR service include chiller and magnet maintenance, cryogens and coils.
Molecular Imaging/Nuclear Medicine
Conventional molecular imaging and nuclear medicine technology will carry a service support price tag between $20,000 and $100,000 annually, with an average around $50,000 across all vendors and models. Some of the key variables impacting maintenance cost for this technology include photo multiplier tubes, detector heads/crystals, PCP units and PCP. OEM and third-party are the most frequent service partners and organizations will rarely go at risk.
PET/CT, another form of molecular imaging, is another imaging modality that is most often maintained by the OEM or a highly qualified third-party servicer. The annual cost will range from $130,000 to $200,000 with an average of about $160,000 across all vendors and models. The cost drivers are similar to the drivers for CT: X-rat tube, detector, UPS units, and PCP.
When it comes to interventional X-ray imaging, such as cardiac, vascular, cardiovascular, neurological, and hybrid surgical angiography technology, OEMs and highly qualified third-party support teams are the standard service providers. The annual cost can range from $60,000 to $150,000, with an average of about $85,000 across all vendors and models. There are a number of key variables that may impact the cost of an angio service agreement, including: X-ray tube, detectors, UPS units, PCP, single plane or byline technology, large screen monitor maintenance, advanced workstations, and modified preventative maintenance coverage.
General X-ray equipment is generally less expensive to service than some of the more advanced modalities we’ve looked at. In some cases, we’ve seen organizations utilize a shared risk (BME first-call) or at risk (without service agreement) approach to maintaining these technologies. Fixed, conventional X-ray room service ranges from $15,000 to $35,000 with an average around $25,000 annually. Portable X-ray runs from $10,000 to $30,000 with an average of $20,000. Radiographic/fluoroscopy ranges from $25,000 to $60,000 with an average of $40,000. Mobile C-arm (rad/fluoro) service can cost between $7,000 and $20,000 with an average around $14,000. The factors that will influence the service costs of those modalities include conventional or digital X-ray, coverage of digital panels (or image intensifiers for analog models), X-ray tubes, battery protection for mobile units.
While most healthcare organizations use OEM or very highly qualified third-party support for mammography technology, we have seen some organizations to go shared risk (BME first-call) or without service agreement. Service support will typically cost between $34,000 and $75,000 annually, with an average of about $50,000 across all vendors and models. Key cost variables include X-ray tube, PCP and after-hours preventative maintenance to avoid schedule disruptions.
Most healthcare organizations use OEM service or very highly qualified third-party support for the more advanced ultrasound technology, but we have seen some organizations go to shared risk (BME first-call) or at risk (without service agreement), mostly on mid-level and more basic ultrasound technology.
Ultrasound service contracts can vary widely in cost, depending on how advanced the system or systems in question are, the types of transducers being covered, and whether accidental damage coverage is included for the transducers. When it comes to cardiac ultrasound, the range goes from $7,500 to $60,000 with an average of $25,000 across all vendors and models. For general, vascular, and OB/GYN ultrasound, service support can cost between $5,000 and $50,000 with an average around $17,000 across all vendors and models. Specialty transducers such as transesophageal (TEE), Intra-cavitary and other very expensive specialty probes that require sterilization after use will often have separate coverage costs that can be expensive and often have a quantity limitation based on annual or term limitations.
A full, detailed analysis of service proposals is essential to ensure your coverage is appropriate in terms of level of support as well as price. A structured, strategic approach to initial review and consolidation is critical. It should include a foundationally valid assessment of what should be and should not be covered by a service contract, what level of coverage, what term of coverage and what options are most beneficial. Reviews must be customized based on installed solutions, backup options, procedure volume and regular scheduling patterns. Assessment of likely replacement cycle, history of service and utilization are also key to making the best strategic and financial decisions related to service coverage.
When reviewed with an organized, strategic approach to the process, healthcare organizations can realize substantial benefits in terms of the right coverage, with the right options, at the right price. The result can be significant savings in an area that is, at best, challenging to manage and maintain.
About the author: Tom Watson is senior clinical advisor for Imaging SME at TractManager.