by Sean Ruck
, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine
Parts supplies present a little more of a challenge due to the geographical location. “We found third party vendors have been very good with standing by their products. Parts become an issue when it is time sensitive,” Buck says. For instance, they can get CT tubes by overnight delivery from Chicago most times, but sometimes the delivery is held up in customs for a few days. “For a CT tube, we can’t afford those three days, so we keep two tubes on consignment at all times. They are in a warehouse here on consignment and we pay when we use it and order another.”
Freedom of choice
Legacy Health is the largest nonprofit, locally owned health system in the Portland-Vancouver area, according to information on the organization’s website. The organization largely depends on in-house service for equipment no longer under warranty, handling about 85 percent of the work, according to Russell Magoon, an imaging service technician at Legacy as well as the president of the Oregon Biomedical Association. “The OEM percentage is 13 to 14 percent with ISOs making up the last one or two percent,” says Magoon. “For things that we have OEM contracts on, it makes sense to use them. The driver for using OEMs is the lack of downtime,” he says.
Magoon adds that there are some modalities that no one can do as well as the OEM and their hospital relies on the OEM to service that equipment.
When it comes to parts, the decision for most purchases are left to those that will be working with those parts. “The techs make the decision to use the vendor they feel most comfortable with,” says Magoon. That means some techs may look to the OEMs while others may have a familiarity and comfort level with third party parts vendors, so they’ll go there. “The relationship between suppliers is so important,” says Magoon.
Before bringing most of their services in-house nearly eight years ago, Legacy’s service and maintenance needs were managed by Aramark. Today, although techs have the freedom of choice when it comes to who they’re getting parts supplied by it’s rare that they do actually use OEMs for parts. “When it makes sense we do, when it’s a quick turnaround situation,” says Magoon. He puts the amount of parts sourced directly from the OEMs at around 20 percent with the remaining 80 percent being left up to what makes sense to the techs.
The asset management company MedAssets negotiates capital purchases and service agreements for Legacy but the health system doesn’t use the company for parts purchases and non-contract service needs. “We do have a reduced price on parts and service from GE and that’s due to the MedAssets negotiation,” says Magoon.