by Sean Ruck
, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine
Lynch also points out what he feels is a broken system for incentivizing hospital materials managers. “Unfortunately, materials managers are paid to purchase the equipment as cheaply as they can on the frontend. This actually incentivizes them to sign long-term service agreements. They may get a savings up front of 10 percent and sign a service contract that gives back 20 percent to the manufacturer,” he says.
“I believe that the rewards for GPOs and material managers don’t look at the long term. These agreements are often signed before we in clinical engineering even know the equipment is on the table for purchase.”
History lessons help guide service
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Nearly everyone in the service sector agrees that one-size does not fit all when it comes to service contracts. But that still doesn’t prevent some from selling a one-size solution. That’s why Rick Stockton, president of Atlas Medical Technologies, places emphasis on looking at the history of a machine before finalizing a service contract. “If you look at the history of the machine, it may not have had a problem in a particular area,” he says. “So we’d rewrite the contract based on what they need.”
Customers may have a full-service contract, or may opt for a shared-risk contract. “If you’re not being utilized, you’re not paying,” he says. And if you do need service, the contract is set so that the customer will pay up to a certain amount and once the threshold is hit, Atlas covers the additional.
“We’ve reduced their overall expenditure to run the scanners and the liability hasn’t changed at all on the equipment,” says Stockton. But each customer needs to work with their provider to figure out the best fit for their needs. And they should be wary of the fine print. “There are so many things buried in these contracts ,” Stockton warns. “For example, if you exceed the mAs bracket (the milliamp seconds or tube usage) they have set, then you pay a larger contract cost and that’s also then the contract agreement that they give you for the following year because that’s what they’re recorded as running under.”
Stockton says one of the driving factors in how Atlas does business is based on an aversion to diversion. That is, his team wants to do everything in their power to avoid diverting patients to another facility knowing that valuable minutes are lost when diversions occur. “If it was your family, you wouldn’t want to have a diversion,” Stockton says. “We need to have the scanner up and running as fast as possible.”
Patient safety and staff efficiency
Echoing the commitment to the real customer — the patient — Jim Spearman, president and CEO of Consensys Imaging Service says patient safety and staff efficiency are the key factors to consider for any successful service organization. If staff is frustrated with downtime or equipment not operating up to expectations, they’re less efficient. That drop in efficiency trickles down into the patient care. Even if staff provides the proper level of care, lower efficiency means patients will be less satisfied.