From the August 2014 issue of HealthCare Business News magazine


“I have worked with in-house service, ISO service and OEM service and have seen that our response time is better with the OEM. That the staff is better-trained and most importantly our uptime is greater,” he says.

To make the numbers work and to keep his budget intact, Teahan says it’s necessary that he produces on the backend. “We get a budget from the institution to take care of service. It’s a global outside budget and once we produce on the back end no one is looking to cut our budget.”


When Teahan made the decision to make uptime the top priority he requested changes to his old service contract. “We had a service contract from 8 to 4, Monday through Friday and everything else outside was overtime and outside the standard hours. We now ask the OEM to work on any equipment maintenance from 12 midnight to six in the morning. If you’re taking my equipment away from me at other hours we can’t see patients,” he says.

He believes that taking service in-house only looks good financially for a few years, when the equipment is still new and unlikely to require any significant repair or service. As time goes on and parts begin to wear out or fail, the financial benefits can start to fade.

With Teahan’s hospital in a major metropolitan market, patients aren’t the only thing facilities are competing to bring in. Just as facilities are investing in advertising to bring those patients in, so too are they investing when they want to bring the parts they need in. “If I have an OEM contract and the hospital up the street has it all inhouse and we both need the same part, who do you think is going to get the part if there’s only one available?” he asks.

Teahan is also pragmatic when it comes to in-house capabilities and working with limited resources to handle a large number of modalities and units. “We have Siemens and other OEM engineers on site and they know their modalities. It is just not possible for in-house service to compete because they cannot know everything.”

“Of course we are interested in reducing costs, but uptime is more important,” Teahan says. “Uptime will produce the revenue to cover the costs and uptime results in better patient outcomes.”

“In the grand scheme of things, what we pay for service compared to the uptime we experience supports our business strategy,” Teahan says. “It does not make sense to risk uptime for a percentage drop in service costs. We need to be running 24/7/365 and we cannot afford to have a system go down because it could delay a patient going to surgery.”

Teahan believes his philosophy also gives his hospital better positioning with OEMs because they’re not looking to distance themselves from OEM services. Instead, they’re bringing them in as partners. That approach may be refreshing to the OEMs. “Especially in today’s environment where they are being squeezed by everybody, we stand out. We get the part because we’re paying for it.”

August 2014 Magazine

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