by Sean Ruck
, Contributing Editor | September 05, 2018
From the September 2018 issue of HealthCare Business News magazine
Last month, HCB News spoke with Wesley Reid, CBET/CHTM, a healthcare technology manager and an enlisted member of the U.S. army about the work he did to reduce costs and improve efficiency during his time at Tripler Army Medical Center.
During the conversation, the topic of checklists came up. As a follow-up to August’s article, Reid provided details about his checklist when it comes to service contracts. Read on to learn more.
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Before signing, Reid recommends performing a benefits/cost analysis (BCA) on any new service contract being considered. Existing contracts should have the BCA reviewed, especially if there’s a renewal coming up. He suggests determining which level of service will have the best return on investment with a range of possibilities being: full service, first look, parts only or time and materials.
When looking at the BCA, it’s useful to look at the expertise of the outside service provider versus any in-house technicians, and to weigh the cost of training for in-house techs versus paying for the outside service provider’s experience. Even among outside providers, it’s important to consider experience when determining costs – you may pay more per hour for high-level expertise, but if you’re considering a time and materials contract, the expert may come out cheaper by being able to diagnose and address problems faster.
Reid suggests you analyze items routinely sent out for repair as a potential new contract target to reduce average maintenance costs. “For example, if you have 300 Rigid Scopes that average $1,100 a year each in repair costs and you request a quote for full contract coverage that comes in at $900 for each scope, you have a cost savings of $60,000 a year. On top of that, you may be reducing the administrative actions required for each individual service request as opposed to the single contract,” he said.
Reducing administration actions also leads to reduced repair times. Additionally, the contract can be a solid budget line item with predictable costs for the year.
After-hour service versus patient rescheduling
Equipment isn’t considerate when it comes to breakdowns. Just because your service contract hours have a window doesn’t mean your machine is going to fail within that time frame. If a repair is needed after contract hours, it can be pricey. Reid advises speaking with the downed department to determine how many procedures will need to be cancelled and rescheduled and what the cost of the disruption will be. Obviously, if nothing is scheduled, wait until contract hours to have the repair made. If the revenue loss is much higher than the after-hour service costs, make the call. If the cost of repair is more, but there are a number of procedures scheduled, or patient satisfaction would take a hit, or a logistical nightmare would occur, weigh all the facts and make your decision.