by Sean Ruck
, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine
Neighbors to the north
While the same rules dictating service and maintenance in the U.S. don’t apply to Canada, the basic challenges still hold true. That is, hospitals still look to maximize equipment uptime while minimizing service and parts expenditures. Chris Buck, executive director for the Lower Mainland Biomedical Engineering program, offered insight into how his group handles service and parts. LMBE services four health authorities, including Fraser Health in Vancouver B.C. and provides service to 26 acute hospitals with approximately 5,000 beds total. The largest facility they service is Vancouver General with just over 1,000 acute beds. His fulltime staff numbers 193 with 172 being technologists.
According to Buck, Fraser Health has only a few service contracts with companies. In part, that’s because of the difference in Canada’s equipment maintenance requirements. “We canceled a lot of service contracts, particularly for imaging and some in monitoring,” Buck says. “We use outside service providers for some specialty work, particularly MRI cryogen work as this is more cost effective and safer than training our own people who would not get sufficient hands-on time to stay competent,” he says.
As a general rule, they don’t enlist the services of OEMs citing the higher costs involved.
When it comes to parts however, the options are wide open. “We give everyone a fair shot with price, quality and delivery key components,” Buck says.
Still, with price concerns being a top factor, OEMs are not typically the supplier of parts for Fraser Health. “Buying from OEMs has gone down a lot over the past three to four years because of cost which has gone up, but sometimes the OEM part is the best choice,” he says.
Generally, they work with alternative parts providers, but the OEMs have been working to be more competitive with their pricing since Fraser is such a large organization, according to Buck. “We buy in excess of 60 percent on the open market, but of course, that’s hard to do with newer technology,” he says.
Bucks’ experience seems to mirror that of many of the other providers we spoke with. There seems to be a trend to buy more parts in the open market. And while independent parts dealers are not eclipsing OEMs in terms of parts sales, their market share is definitely growing.
Buck says by collapsing $6.5 million (roughly $6 million U.S.) in service contracts by bringing them in-house, the organization saved just shy of $2.8 million U.S. He acknowledges that overall spend is going up because the organization is growing, but total cost of ownership on individual pieces of equipment has gone down.