by Brendon Nafziger
, DOTmed News Associate Editor | May 30, 2013
From the May 2013 issue of HealthCare Business News magazine
It’s just like any insurance. The insurance company is betting something major isn’t going to happen, and you’re betting it is.
There is a shift in the sense of continuing to do more in-house. But the (new) model is different. Regardless of whether you call it a third party, ISO, in-house or OEM, what you should be driving for is 60 to 70 percent minimum of the work being done by clinical engineers, BMETs, lab engineers, imaging engineers at the hospital. Do as much as you can with your own resources, because you know that’s a more cost-efficient model, regardless of how you title it.
Every hospital and health system is different depending on the sophistication of their in-house organization and their risk tolerance. In my organization, we try to maintain as many devices as possible in-house and limit service agreements as much as possible. This includes linear accelerators, CTs, MRIs, and other high-end devices. We used to utilize shared service agreements that were much less than full service agreements, in which our in-house CE staff would do the PMs, take a first look, and do as much of the maintenance as possible, but parts and OEM back-up were covered. I have seen a trend in recent years of not only the service contracts increasing in price dramatically, but the delta between the full service and shared service agreements [shrinking]. I would imagine that most CE departments would react to conceding to the full service agreement. We have taken the opposite approach and eliminated almost all service contracts. This has resulted in millions of dollars of savings. At the same time, our customer satisfaction has increased.
My overall perception is that OEMs are starting to feel the pressure on the capital side as hospitals cut back in purchases and competition grows. Knowing that most hospitals only look at the initial capital cost in making a purchasing decision and not the support expense, the OEMs are trying to make their margins on the service side by making it harder and more expensive to get training and service manuals and coming up with creative methods for “locking down” access to diagnostic software on the machine without a service agreement. One vendor provided us with free service training to close a purchase. We found out later, however, that their policy is not to offer any training schools on their devices until three years after any new product is launched.
There’s continuing to be a consolidation of health care organizations. I think as they continue to consolidate and become bigger organizations, those organizations like Advocate will have more opportunities to develop in-house solutions that can be escalated to more highly technical types of equipment. At Advocate, because of our size, we have a dedicated imaging team and we invest in the training of those folks. MRI is unique, we don’t do a lot there, most of that is contracted with the OEM, but we’re getting deep into CT, with the goal of the next year or two to be completely in-house with service and preventive maintenance. However, I’m not ever going to send someone to be trained on surgical robots. It’s too highly specialized. While we’re a big organization and have a lot of robots, it wouldn’t make sense to invest the money and time to get people trained to do that kind of service.