Imaging equipment service contracts: When is ‘end of life’ a death sentence?

by Gus Iversen, Editor in Chief | August 14, 2015
From the August 2015 issue of HealthCare Business News magazine

Those companies will frequently roll out new equipment and stop supporting the older stuff long before a radiologist would be ready to trade in their CT scanner, for example. “Another challenge is the operating system. For example, Windows XP is no longer supported by Microsoft. If they end support of XP then we have to end it as well,” says McCallum. Siemens worked with Microsoft to ensure their customers had an upgrade path to Windows 7 when that happened. From the OEM perspective, taking responsibility for computer technology that has become outdated is one of the bigger risks an ISO takes in their EOL servicing agreements.

“A lot of times you’ll find third-party organizations will get a refurbished computer but don’t know what kind of software is installed or what kind of inherent holes are in the security of the system,” says McCallum. The vulnerability of medical devices to hackers and other security threats have been well documented in recent years, but rarely — if ever — do those stories indicate whether or not the systems being taken over are outdated.

For Siemens Service, OEM certified and tested spare parts make a world of difference, and if they can’t certify those parts anymore they won’t service the equipment. But nor are they oblivious to the fact that end users are holding on to their systems longer. “They just don’t feel like they have to replace it — maybe it isn’t their primary emergency department CT or MR, but they are still using these older systems in the therapeutic department for patient planning and things like that,” says McCallum.

As a response, Siemens has rolled out an End of Service Extended Use Service Agreement through which McCallum says, “we don’t provide a 100 percent guarantee that we will be able to fix it, but we do keep parts in stock and engineers available to support it.” Those special agreements are only available on systems where there are enough parts warehoused to make it work, but the company currently ramps up its parts buying cycles before end of support, so it can keep its customers’ equipment running past the end of the standard service agreement.

Keeping an eye on the bottom line
In Gonzalez’s experience, a service contract from an OEM for older model advanced imaging equipment can cost roughly $5,000 per month. For equipment that is still being paid for, he adds an additional $5,000 per month on top of that for those payment plans.

“How will you get that money back? You have to be frugal and careful about how you spend money,” he says. For anyone who contracts with an ISO to service EOL equipment, expenses are clearly a driving influence. Fortunately, as the ISO segment evolves, there are some increasingly credible options to choose from — but they are by no means all created equal.

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