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The top 10 questions for hospital equipment service contract negotiators

August 17, 2016
HTM Parts And Service
From the August 2016 issue of HealthCare Business News magazine
Customers should begin by evaluating the complexity of each piece of equipment and the hours needed for operation. They also should consider the service history of existing systems in their facilities. Every organization uses equipment differently. Some experience more wear and tear than others based on patient load. Customers should assess how critical the equipment is to their workflow and whether there are backup systems that will allow patients to still be treated when the primary system is down. It can also depend on the volume and the number of systems available should one of the units need service and be down for a day or longer.

How easy is it to absorb the patient scheduling during that downtime with other units? The expertise of a customer’s biomedical department will also help to determine the amount of coverage needed. We also suggest considering any government regulations that require a specific standard that is only valid from the original equipment manufacturer (OEM).

7. Is standardizing with one service vendor recommended?
This is becoming a more common focus of many customers. It is a case-by-case basis and is not the right solution for everyone. If a facility wants to standardize, it should review its history with this provider, if it has one, and the amount of equipment it has from that vendor, provided the service provider is also a manufacturer. Facilities should also consider that a single service provider may not be able to repair every system and may need to contact the OEM for service. This can cause additional delays. Customers also should be sure to track downtime and response time to ensure they are not seeing longer response times from the provider.

In these “master service agreements,” often the vendor providing service will make the first attempt at repair, but may have to subcontract the OEM vendor to come in and complete the service repair. Although the customer may be paying less initially, it may result in a longer time to repair for these types of situations. A key area to watch is how the pricing changes at contract renewal. If there were many instances in which the servicing vendor had to bring in secondary support, that cost will be reflected in the contract renewal. In some instances, these types of contracts can include equipment that does not need a service contract. Customers should closely review the contract for these types of equipment and determine what level of risk they are comfortable assuming.

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