Assaf Melochna

Medical device service organizations turn to service intelligence to get ahead and stay ahead

March 31, 2023
By Assaf Melochna

The medical equipment maintenance and services sector experienced growth over the past year, despite inflation and economic downturn negatively affecting other sectors. However, the industry isn’t exempt from serious challenges such as the skills and knowledge gap, which continues to drive up costs significantly.

Most industries saw service demand drop for a year or more during the COVID-19 pandemic, but Aquant’s findings from its 2023 Medical Device Benchmark report saw that service organizations that maintain or repair medical devices did not see a slowdown. They, more than any other industry, either maintained pre-pandemic service levels — or saw an increasing demand of service requests for everything from scheduled maintenance to repair. To uncover these findings, Aquant gathered and analyzed anonymized data from leading medical device service companies. The data in the 2023 Medical Device Benchmark report was gleaned from 44 organizations with more than 4.6 million work orders resulting in a total of over $3.4 billion total in service costs.

The current state of medical device service organizations
It’s clear the pandemic put the medical device industry at the forefront. The demand for essential products like diagnostic tests, ventilators, and respiratory assistant devices was at an all-time high so it’s no surprise that business boomed for service organizations responsible for repairing and maintaining medical equipment. On top of that, the medical equipment maintenance market is projected to reach $74.2 billion by 2026 from $45.2 billion in 2021, according to a new market research report. Market growth can largely be attributed to the growing trend and pressures to implement preventative maintenance strategies, as healthcare institutions seek to enhance patient safety and care quality.

The data shows that the medical device service industry had a 2.5% increase in field events and average service costs decreased by nearly 4%, meaning organizations were getting more business and experiencing cost savings. A massive win for the industry, however, many of those successes can be attributed to organizations strategically leveraging technology.

Despite positive growth, the medical device service industry struggled with significant challenges, such as bridging the workforce skills gap and improving key workforce metrics. However, top-performing companies got ahead — and stayed ahead — by investing in critical technology initiatives like AI. An AI-powered platform called service intelligence gained popularity in the industry for its predictive analytics and diagnostic capabilities. Leading companies leveraged service intelligence to enhance knowledge and accuracy among their workforce — and make more strategic, data-backed decisions.

The widening skills gap is costing organizations significantly
In 2023, the medical device service sector saw a 6% increase in technicians. This uptick in workers, however, wasn’t the saving grace that these service teams needed. The findings found that the majority of these workers lacked the necessary skills required to complete a job efficiently, ultimately costing employers. More-seasoned technicians retired faster than their replacements could enter the workforce, even with the uptick in hiring, and the report found that technicians completed 3.3% fewer work orders overall, signaling that organizations struggled to upskill less-experienced workers quickly. While service costs across the industry were down, data shows the least-skilled technicians cost over 200% more in the bottom-performing medical device service companies.

In the top 20% of organizations across Aquant’s dataset, there’s a 30% difference in Resolution Cost, a metric that measures the total cost it takes to revolve and close a case, between top-performers and bottom-performers. In the bottom 20% of organizations, the knowledge gap between the most- and least-skilled technicians costs 203% more. Service teams need to address this widening gap now if they want to stay competitive, or for that matter, operating.

What would happen if all your employees could perform at an expert level? Aquant’s research reveals boosting low-performing employees closer to average performers would decrease service costs by 7%. But if everyone had the knowledge and skills to perform like the top 20% of the workforce, service costs would be reduced by nearly 30%. If ignored, the skills gap will lead to a heavier workload on teams, especially veteran techs who are often called in to help.

Narrowing the skills gap: improve efficiency for practitioners and better patient environments
Refusal to narrow the skills gap could lead to an increase in service costs, a decrease in customer satisfaction, an uptick in customer churn, less capacity for organizational resilience, and a negative impact on growth. But those organizations who take the necessary steps to shrink the gap will not only improve overall business performance and customer relationships, but they will also improve the experience for their end customer: the health practitioners and their patients.

To get started, organizations can take the following steps now:
● Normalize data sanitation and ensuring that "clean" data can be easily accessed and analyzed to inform more accurate decision-making
● Assemble a workforce with a diverse mix of soft and hard skills to create better CX
● Invest in relevant tools and training, such as service intelligence
● Shift to proactive service models and centering preemptive actions
● Leverage shared knowledge (i.e. from service data, industry knowledge, and insights from SMEs) to provide fast and accurate solutions

Why service organizations need to narrow the gap ASAP
Narrowing the skills gap among service teams has a direct correlation to reducing equipment downtime, which enhances day-to-day operations for health practitioners, improves device reliability, and ultimately improves patient experiences.

Time’s up for service companies in the medical device space. When it comes to healthcare, the end goal for all stakeholders involved is to ensure the patient receives optimum treatment and a pleasant experience. Customers – across all industries – demand a more immediate response than ever before, and patients deserve it. Successful teams realize that external factors, like rising costs and labor shortages, are out of their control but they’re adjusting their operations and investing in the right technology to address these issues and meet customer demand. Those who respond accordingly will thrive, and those who don’t may jeopardize their business.

About the author: Assaf Melochna’s experience incorporates strong leadership skills built upon a strong technical foundation. He is an expert in service, and has business and technical expertise in enterprise software. Assaf started Aquant with his co-founder Shahar with the vision of helping service companies transform the way they deliver service. Prior to starting Aquant, Assaf spent 10 years at ClickSoftware where he served in various positions in solution consulting and product innovation. Assaf brings a unique approach from his experience as a Major in the intelligence forces (IDF) where he specialized in turning massive data to knowledge, and knowledge to actions.