HCB News: What factors have contributed to this change?
ES: While the U.S. domestic imaging market has been shifting from full-service contracts to more T&M (time and material) service, and in some cases in-house service, I do not think that the European market is comfortable with taking on this level of risk. In my opinion, over time the European market will adjust, adapt and accept taking on additional risk for the maintenance of equipment. This will be driven by higher costs to the provider and reduced revenue from reimbursement. Capital equipment owners will look for neutral partners that can assist with parts acquisitions and service, regardless of which OEM they choose.

SH:We have seen a focus shift from the OEMs toward service-type contracts, as a way to sell more capital equipment. This helps governments spend their capital more wisely. We have seen a shift toward service contracts that include capital equipment management, finance, replacement and maintenance that is being provided by companies. There is currently a large outsourcing strategy in the biomedical industry in the U.K. and Italy, and the markets are moving away from the traditional in-house model. More private companies are starting to want lower costs with comparable quality.
HCB News: What are the roadblocks preventing the change from happening faster?
ES: There is a lack of a reliable supply channel that includes the availability of trained engineers, quality-assured parts, technical support and training.

SH:The roadblocks that are preventing change from occurring faster are the cultures, and safety of dealing with OEMs in a particular way. It’s known in the industry that no one gets fired from buying from Philips, Siemens, GE and Toshiba. There are also large barriers to entry due to the need to be as credible as the largest brands in the world. In addition, users want to buy assets themselves and it’s difficult to gain trust with new companies.

HCB News: What kind of companies will benefit as the European market changes?
ES: As each of the OEMs in the European market have plans or have already started offering the multivendor service model, it further validates the existence of the model in the market. The independents that approach this market with the right processes including funding, people and structure will thrive and prosper.

SH:Service-led and service-focused companies will benefit, which is why all the larger OEMs have a focus on change toward this model. Managed Equipment Service (MES) companies will benefit where service and lifelong support to assets, processes and technology integration are key. Other companies that will benefit are larger companies that can raise finance as well as funding, companies that really understand the equipment chain and the effect it has on the patient pathway. Others that will benefit include those that can optimize facilities, equipment and the pathway for the patient, have leaner processes and that focus on the patient, and those with a corporate policy with good governance, ISO procedures and compliance.

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