by Sean Ruck
, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine
Keeping the long-term in mind
Low cost offerings and immediate savings can be attractive propositions for hospitals, especially in these days of shrinking budgets. Yet savvy health care professionals realize they’re running a marathon instead of a sprint when it comes to ensuring the ongoing health of the hospital or health care system they’re with. Frederick McMurtrie, CBET and biomedical supervisor of a leading Florida Hospital System and Past-President of the Florida Biomedical Society realizes he’s in a marathon.
“In our system, we work with our OEM partners to cover parts for seven years and labor for one year or parts three years and three years of labor; it is all part of the cost of ownership and is negotiated up front during the purchase process,” says McMurtrie.
With cost containment a hot button topic for health care professionals, stretching the profitable life of equipment assets is highly desired. Taking care of the equipment, keeping up with preventative maintenance schedules and even just being sure to keep it clean goes a long way to helping the machine go a long way. “We try to manage the equipment with the idea that it should be maintained in as close-to-factory-new condition as possible,” says McMurtrie. But it’s sometimes easier said than done, especially when parts get scarce or service support dries up.
In instances where the OEM has discontinued support or the cost to upkeep through OEM services become prohibitive in comparison to the revenue a machine is generating, then McMurtrie will explore aftermarket parts options or other options for service. In general though, his hospital system relies heavily on OEM service and materials. “I would say the percentage breakdown would be 85 percent OEM and 15 percent aftermarket,” he says.
It’s a balancing act when considering the revenue a piece of equipment can generate and the cost it takes to maintain the machine. If outside service companies are used (whether OEM or ISO) a carefully designed contract can help a hospital more accurately determine when it’s time to retire a machine. However, if the last few years have been any indication of things to come, return on investment will require very careful planning and considerations like service and parts will have to figure in significantly to the overall plan. “Most parts we pay for have gone up,” says McMurtrie. “In some cases, doubling or tripling in cost over a year or two,” he says.
While McMurtrie’s hospital system does belong to a GPO and prefers going through it for services, they do have flexibility to look outside those boundaries when a situation warrants it.