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Parts and Service - The Full Story

by Sean Ruck, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine

“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.”

To Teahan, with all the talk of patients coming first, people aren’t putting their money where their mouths are. “In my opinion, people are placing too much emphasis on cost of service at the expense of patient outcomes and patient satisfaction.”

When a system goes down, that broken link disrupts the whole chain of care. “It’s not just the imaging portion — it’s the back up all down the line in the hospital,” Teahan says. “We can’t get a patient discharged, we can’t get a patient admitted.”

By maintaining service contracts and avoiding in-house options, Teahan is also able to reduce the time spent playing politics. “Bringing it in-house becomes more stressful and there’s more administrative arguments and bureaucratic wrangling internally if all of a sudden you have to purchase a part that’s $250,000. I never run into that problem. Do I have to pay a premium for that? Yes. Do I think the premium has value? Absolutely.”

Although Teahan holds partnerships with OEMs in high regard, they shouldn’t look at his way of thinking as a free pass. In the spirit of true partnership, he wants it to be a two-way street. According to Teahan going forward OEMs will need to better demonstrate the added value their service and parts supply delivers. They’ll need to more clearly define the total cost of ownership on equipment as well. “The OEMs also have a better ability, when they finally listen, to create an infrastructure that helps us all in the long run.”

With technology allowing more systems to be remotely monitored, that means there should be ample warning in most cases that maintenance is needed. “No piece of high-end imaging equipment doesn’t tell you electronically in advance that it is going to have a problem and the OEMs should develop systems to monitor that more than they do now,” says Teahan.

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