by Brendon Nafziger
, DOTmed News Associate Editor | May 30, 2013
From the May 2013 issue of HealthCare Business News magazine
We found too, that as a big organization, you get more leverage with the manufacturers. We’re seeing the gap between the manufacturer-provided contract and an ISO contract is shrinking. Also, with a larger organization you can spread that financial risk out. I’ve got 32 CT scanners. So if one to three tubes go out in a six-month period, I’ve got this big base of equipment. A small rural hospital with one or two scanners – one or two tubes could blow their budget.
Most of our service contracts are for high level, specialized devices, things we have a small quantity of or that require uptime. We’re currently working on analyzing contracts, seeing which ones are I can take in house without straining my resources. More than 95 percent, based on quantity, is currently in-house, 90 percent if I looked at it from a financial aspect. I think it depends a lot on size. Anybody can hire somebody to work on CT stuff, but if you only have one, then what does that person do the rest of the time? I think you look at the value that a contract brings, and you try to maximize that value.
I don’t see much change across the nation. There is a certain percentage of hospitals that see equipment support and maintenance as not a part of their “core business” of health care. They choose to outsource biomed and imaging service, along with other service functions such as facilities, housekeeping and even IT in some cases.
Manufacturers are, of course, the most costly, but they spread so many horror stories to their customers, that most hospitals are afraid to leave the complete contract. Divorcing from a manufacturer’s contract requires a good deal of time, effort and ongoing work to make sure that the new service provider (whether a company or an in-house individual) is effective and responding to all problems. Radiology directors do not have this kind of time, nor do they have the training or interest in service management. And unfortunately, many in-house HTM programs are led by unmotivated individuals, or old guys who are trying to stay afloat until retirement. They are not looking to take chances or work harder.
ISOs are a really good option for transitioning from the manufacturer’s service. They have sufficient resources and experience in starting hospital-based service. And they know the places to obtain parts and training and backup technical staff. The ISOs will often shave 30 percent or more from the cost of a manufacturer’s cost. This is a good final solution for many hospitals, especially small to medium sized ones.