I just returned from a week in Tegucigalpa, the capital city
of Honduras. Honduras is a good political friend of the U.S., so it receives a
lot of donated medical equipment. My job was to work with Engineering World
Health and train local biomedical technicians to repair medical imaging
equipment, specifically ultrasounds.
Although there are a handful of somewhat knowledgeable
technicians in the regionHonduras,
there is virtually no access to repair parts. The government hospitals do not
budget any funds for repair parts. As much as 50% of donated equipment in third
world countries is broken within a year, never to work again. This is why I
spend my time training locals to make repairs, hopefully without needing any
On this trip, I visited three hospitals in the capital,
including Torax, the cardiothoracic hospital of the country. We examined six
ultrasound machines and were able to get three of them working, even though
they were long out of manufacturer support. None of them had worked for over 3
years. It was a major victory.
I also found three others that needed parts, including one
track ball, a software boot disk and a hard drive. I am looking for these and will
ship them when I find them. There is also a shortage of video cables, power
cords and basic repair supplies - things that we in the U.S. would drive to our
local stores to pick up.
Let me tell you a sad story. It seems that whenever an item
is donated, it is inventoried by the central government's control branch. It is
then issued to a physician, who is responsible for the equipment. It is assumed
that all equipment issued to the physician is operational.
We had two broken C-arms. One was for use in pediatric
orthopedics. It was the ONLY imaging item for visualizing broken bones. It had
been broken for 3 years, forcing the physicians to do an unusual number of open
reductions of broken bones instead of closed reductions, which they could do if
they would have had access to imaging technology that worked.
We were able take a power supply from one broken C-arm and
get the second C-arm working. Because of the controls of the national equipment
inventory agency, it is not permitted to move parts from one machine to
another. There is a long explanation to this, but it includes unauthorized
sales of hospital equipment to private companies and other complicated
Anyway, it was demanded (and we had to comply) to put all
the parts back in the original machines. We had a meeting with the physicians
and the hospital administrator, but to no avail. We were obligated to return
the parts to their original machines and left the hospital with two broken
Such is the case in many countries, where corruption and
personal theft of government resources (even donated ones) is common.
If you have old medical imaging equipment you no longer
need, consider donating it to a worthy cause that can still get a few years'
life out of it. It will make a difference in some other country.
As radiology departments and hospitals in general are going
digital, there is more and more that many of us don't know. We are being
marginalized because we may not understand the entire picture. As all devices
in hospitals talk to other devices, the people running the show are either in
the IT department or from consulting companies under contract with the hospital.
Would you like to know more about Healthcare IT (HIT)?
Well, you are in luck. The federal government realized a
couple of years ago that there is a knowledge gap. They have taken steps to bridge
that gap. They have created a program called HITECH Workforce Training. It is a
6-month online program available at 80 community colleges across the country.
Its goal is to provide a high-level overview of the digital hospital, how it
will be implemented, how it will help healthcare, and what hurdles must be
crossed to achieve it. It is directed towards experienced hospital workers,
such as managers and directors.
The cost is $360.00 and it prepares you to take the HIT Pro
certification exam and the CPHIMS certification exam. I have completed this
course and passed both exams. As an experienced hospital worker, it was very
useful in helping me wrestle with the plethora of players, acronyms, companies
and stakeholders in this effort to revolutionize healthcare. I recommend it to
every person in management in healthcare.
To find additional resources, just Google "HITECH Workforce
Training" or visit HITECHworkforce.com.
I recently began following a website called "Warranty Week". I believe that they are uniquely able to report the actual cost that companies must spend to support capital equipment during the initial warranty period and for subsequent years following. It works like this: All publically traded companies in the US must file an annual report with the Securities and Exchange Commission (SEC). In this report is a financial piece which, among other things, they must set aside the estimated cost to pay for the warranties of products that they have sold. It is this number, represented as a percentage of sales, that is the annual cost of maintaining the product.
A metric we in hospitals use to evaluate service costs is COSR (Cost of Service Ratio). This is a ratio of annual service cost to the price paid for an item. You may calculate your own ratios, but manufacturers' service contracts typically run a COSR of 10% to 20%. This means that the hospital is paying between 10% and 20% of the initial purchase price EVERY YEAR FOR MAINTENANCE.
You might suspect that if a manufacturer is charging you between 10 and 20% of the purchase price of an item to maintain it for a year, that their actual cost would be about 9% to 18% (90% of what they charge you). Let's look at what the companies themselves report to the SEC.
This graph shows that the rates average around 1% of the cost of the equipment and are trending downward. This means that if they charge you 10%, their profit is 9% of the original price paid every year. Of the service contract price that you pay, the company is pocketing 90% of it as their profit. So a $100,000 contract costs $10,000 for them to run, leaving about $90,000 profit for the manufacturer.
What's wrong with this picture?
I just got back from visiting a few hospitals in Florida. I
don't sell any products or services. My job is to provide education and
training on a variety of subjects not related to imaging, or anything that my
company does. I deal with the hospital-based imaging engineer, BMET and the
manager or director of clinical engineering.
My weeklong visit to Florida consisted of hearing lots of
troubles and conflicts from within hospitals. Most revolved around money,
budget, staffing and changes to upper administration. Then I helped the
technical service providers (who work for the hospitals) formulate possible
solutions to their problems.
Based upon this mutual level of trust, I hear all the dirty
details, political frictions and suspected unethical dealings. We usually lock
ourselves in a soundproof room and they lay out all the complaints. The
hospital manager shares pricing, salaries, contract details and other highly confidential
information. I never abuse my trust and only use the information to further my
insight into their situation so that I can suggest some way to correct the
problem, or at least to protect the parties from further damage.
There is a notion that if someone can engender the
confidence of an outsider (which I am), that the outsider can become a "Trusted
Advisor." This is someone who you know is trustworthy, shares your ethics and
morals, and has a broader knowledge than you might. It is someone that you can
confide in about your deepest suspicions. You can essentially give them top
security clearance into your organization, knowing that their only motivation
will be to assist you in finding a best-case solution. There are books written
All of your salesmen (or saleswomen) want to be your Trusted
Advisors. They want to be privy to details and information that the other
salesmen do not hear. The belief is that it gives them an added advantage in
the sales process. But most sales people cannot achieve this Trusted Advisor
status, mainly because they are always focused on the sale and their
transparent motive is to force fit their products as the solution to your
problems or needs.
The Trusted Advisor should be someone that you can be
brutally honest and candid with, and trust that they will be just as brutally
candid with you, even if it points to a competitor's product. How many of your
professional acquaintances can fit this bill?
I am proud that I am considered to be the Trusted Advisor to
many people in hospitals across the United States (and even further). It is an
honor that I can be someone they turn to for solutions, compassion and insight
when their world turns upside down. And it is because I always tell the
unvarnished truth about each and every situation, no matter who it points the
finger toward. (Read either of my blogs at www.gmi-blog.com
or www.htmdirt.org for examples.)
I have a few Trusted Advisors of my own. I hope that you
have one or more that you can commiserate with in a candid manner. We all need
Although there are several national associations to which
clinical engineers belong, there are many places in the US where there is not a
local option. Local associations are important because of the ability to personally
attend meetings and network with others in the area. During these meetings
(which may happen any time from monthly to quarterly), attendees can share
information about what other hospitals are doing, problems they are having and
even which local salespeople can be trusted to do what they promise.
The two areas I am speaking of are Washington, DC and
The Metro DC area includes some of Virginia and some of
Maryland. Both of these states have
associations, but they are based in cities too far to make an evening meeting
after work. DCers don't like the drive to Baltimore, and Richmond is too far.
The inaugural meeting (serving pizza and beer) will be at
the headquarters of AAMI (the Association for the Advancement of Medical
Instrumentation) in Arlington, Virginia. For details and to register to attend
next Wednesday's meeting (February 20), please visit http://htma-dc.wildapricot.org . We
welcome imaging engineers, radiology directors and anyone else interested. All
of the major hospitals in DC and surrounding areas will be represented.
In Tennessee, our first meeting will be in April. Although
there are associations in Memphis and Knoxville, the distances are clearly too
far for a one day meeting. So we are starting one based in the central part of
the state. Again, any and all interested parties are welcome. It will be
sponsored in a large part by some independent imaging parts companies. Visit http://HTMA-TN.wildapricot.org to
join the association for free and receive notices about our future meetings.
Other upcoming meetings that you may be interested in
Baltimore - BMETS (Baltimore Medical Equipment Technicians
Society) is holding a free dinner on February 21 to generate interest in an
April 3-day event in Reston, Virginia. Visit www.BMETS.org
for further details.
Reston, Virginia - MD Publishing (www.MDPublishing.com ) is holding a
3-day educational conference and tradeshow in Reston, Virginia. All hospital
employees are admitted free for the entire event. For details and to register,
please visit www.mdexposhow.com/dc/.
If you are in these areas, please pass these meetings and
show dates to your in-house imaging engineers. We want more imaging
You work with equipment. Equipment is technical, by nature.
As Radiology and management professionals, you must rely on others for the
technical information about the inner workings, reliability, accuracy and life
cycle cost of your imaging equipment.
If you work in a hospital, your access to information about
new technology, the stability of companies, and the level of cooperation that
you will receive after the sale is limited. Limited to other imaging
professionals, manufacturer's employees, your own experiences and online
resources. But which of these resources are going to tell you the truth - the
real, honest, good bad and the ugly?
So much of what we do today is driven by big technology.
Whatever you buy today will be with you for a long time. It pays to get all of
the input that you can. And when seeking opinions and information, it is
important to pay attention to the motives of the people giving the information.
Manufacturer's reps and sales people are paid
to sell the manufacturer's product. They will always have a solution for you.
If it doesn't fit, their job is to force it. Their jobs depend upon moving
product. They are not paid to give you an unbiased report. They are not
unbiased. They unashamedly want to sell you their product. They undergo a lot
of training to teach them how promote their product and how to talk down the
In the hands of a sales professional, you might not even know
they are bashing the competition. It will be done in so subtle a way as to make
you think that you figured it out for yourself. Information from a
manufacturer's sales person is only as good as what they are willing to provide
in writing. The spoken word evaporates as soon as it is uttered.
Other professionals and your counterparts at other facilities
are better sources of information. If you know them well, they should give you
the unslanted truth about their experience with a particular machine or company.
But if you are not personal friends, you don't know if they are being rewarded
in some way for providing an artificially enhanced report. They may also have
access to special perks and discounts that you may not.
Online resources have a definite advantage.
Although you might not know the person writing the review or comment, if there
are enough comments, you can detect a trend in the user satisfaction. These
trends may enable you to ascertain the truths contained in them. Online forums
have the advantage of consolidating large numbers of reviewers into a single
How about a couple of other resources?
ECRI Institute and MD Buyline are two
companies whose specialize in evaluating medical devices and sharing purchasing
pricing and terms. But they do not directly evaluate fixed imaging devices.
They are too expensive to purchase and install. So there is very limited objective
information about these high-dollar investments.
RSNA is a fantastic place. But again, you are visiting the
manufacturer's booths. And they staff them with their very best sales and engineering
people. They spare no expense to make their equipment look like the best.
Again, there is little objective information.
Group Purchasing Organizations are
involved in almost every capital purchase for hospitals. What is their
motivation? They are usually paid not only a membership fee from their member
hospitals, but also receive a percentage from the manufacturers. They collect a
fee every time their members purchase from a company on their vendor list.
Have you used a pre-owned equipment sales company?
(Disclaimer: I work for one of these.) If you use a large, nationally known
reseller, you can tap into their information about many manufacturers and
models of equipment.
Maybe your hospital isn't interested in purchasing previously
owned imaging equipment, but reaching out to one of these companies can provide
you a couple of things. First, they can speak to you about your present and
future needs. This discussion may help further codify your purchase rationale.
Second, they are familiar with many manufacturers and models of equipment.
Their assessment of what best meets your needs reflects not just one manufacturer's
offering, but many. It is another piece of information for you to evaluate.
Third, you may just change your mind and determine that a refurbished solution
will stretch your capital dollars.
How about the technical staff of your own hospital?
Your in-house Clinical Engineering or Healthcare Technology Management
department can be a rich source of information. Whether they are hospital
employees or provided by a national independent service organization, they have
a breadth of knowledge rivaled by few. In addition to working on the equipment
of many manufacturers, they have access via listservs and forums to thousands
of hospitals and imaging engineers across the nation. Using these forums, they
can ask questions and receive both public and/or confidential information about
the accuracy of the claims made by the manufacturers concerning machine
accuracy, dependability and user satisfaction. But beware - they may also be
biased. Many of us have had bad experiences with greedy manufacturers who have
tried to thwart our efforts to be independent and save our hospitals money.
This can leave a bad taste in the mouth of a medical equipment servicer for
My advice is to take as much information as you can gather,
from as many diverse sources as possible, and then make the decision that best
fits your situation and constraints.
I actively seek input from my fellow clinical engineers
around the country about medical device companies that seem to gouge their
customers. I share these reports at my blog - www.HTMDirt.com. The name stands
for Healthcare Technology Management Dirt, which is patterned after a similar
site designed for technology and computers in general. It is called www.TechDirt.com.
I invite you to visit it
and read about some of the ways that companies take advantage of their
positions to squeeze additional monies from hospitals. This is sometimes by
high prices for relatively insignificant parts, restriction of technical education,
refusal to sell parts and many other techniques.
I also welcome your input regarding your experiences. Contact
me at Plynch@gmi3.com.
note: The opinions expressed on HTMDirt and TechDirt are those of its authors and do not
in any way.
I keep up to date
with Modern Healthcare, Healthcare IT,
AHRA, and many other healthcare news outlets. If there is one thing that I can
determine about the future, it’s that nobody is sure what will happen. Most
people seem to believe that things will get worse before they get better, but
just how much worse is a subject of great debate. And which parts of healthcare
will be hit the hardest? Will it be physicians? Insurance companies? The
government? Hospitals? Will it be large hospitals? Teaching hospitals? Small
rural hospitals? Specialty Hospitals?
Since the future
is so unsure for each of us, is there a single best course of action that we
I believe that
there are a couple of things that we in healthcare can do to best prepare for
First, we should cut
the fat out of our operations wherever possible. Reduction of unnecessary
overhead should be a mantra, even during prosperous times, and it should be
especially vital during a time of future changes.
yourself (and your hospital) from long-term commitments. We make proforma
estimates of revenues when we make decisions to purchase new capital equipment.
We also use these estimates of future revenue and volumes when we decide what
we can afford to pay for the maintenance of our imaging machines. Based upon
promises of high equipment utilization and lucrative government reimbursements,
we often make the decision to enter multi-year service agreements on newly
purchased imaging modalities.
contracts are for five, seven or 10 years and have either no cancellation
provisions, or they have substantial penalties for early termination. So what
happens when CT screening is replaced by ultrasound? Or the government decides that prophylactic
breast mammography is no longer needed by certain classes of women? Hospital revenues
drop, but it still is saddled with monthly bills for full equipment service,
even though the equipment utilization may have decreased by 50%--also reducing maintenance
needs. Contracts have no provision for this decreased usage. The Veterans
Administration learned this many years ago--it is prohibited from entering into
any contract that lasts for more than one year, having learned that costs are
as likely to go down as to go up.
The bottom line
is that since we don’t know what the future holds, we should be prepared to
take whatever course of action is required. In the past, we, as Americans,
could always assume that the future would hold more of everything--more money,
more patients, more reimbursements, more, more, more. All of a sudden, that
isn’t the truth. The only certainty is that the future will bring change. What
sort of change isn’t known. So we should be prepared to flex either up or down
depending on the environment around us.
I am speaking
about only one small facet of your business, but I urge you to get rid of multi-year
commitments for equipment maintenance. Instead, choose service options that
allow annual customization. In the process, you will not only be preserving
your options, but you also may save your hospital some money.
I am at a conference in Las Vegas. As such, I am surrounded by every conceivable method ever devised to separate people from their money. Except as a way to spice up a friendly poker game among friends, I am not a gambler. As a hospital manager who has control of a significant budget, I am trained to not put hospital assets at risk. Obviously, you don't bet your budget on a roll of the dice. That would be very irresponsible.
But as hospital costs rise and revenues shrink, even the "elite" departments of the hospital are being asked (required?) to reduce costs. Taking your budget and running to Vegas to bet it on a game with long odds is not what a responsible manager would do. So how else can a hospital manager reduce costs?
Since you have the most control over costs, here is where you have to focus. And every dollar that you do not spend on equipment maintenance services goes straight to the hospital's bottom line--the profit line.
I understand the rationale of having original manufacturers maintain their equipment. I also understand the idea of contracting with an independent service organization (ISO) to do maintenance on many different brands of equipment. But what happens when the original manufacturer of some of your equipment offers to maintain ALL of your different brands of equipment? This is called multi-vendor service, or MVS.
Your first thought might be that a MVS company (and the big three manufacturers all have an MVS division) is just extending its knowledge, expertise, resources and talent to other brands. But where do you suppose they get their training? They receive it the same place that all ISOs do--from third party training companies or by hiring already trained individuals.
If you are looking to save money on service, and an in-house program is not feasible for whatever reason, do your homework and pick the service that is right for your operation. MVS companies have the same resources of any other national ISO and should be evaluated as such.
I was in Orlando last week for AHRA: the Association for Medical Imaging Management. It was my third meeting. It never fails to get better. Of course, the exhibit hall was full of equipment manufacturers and many companies offering after-warranty service. But the real magic happened in the classrooms. There were so many presentations advising hospitals how to reduce their imaging equipment service costs. I am still digging through the materials I collected.
It's good to know that I am not the only one who advises against signing multi-year contracts. Vicki Petersen, MS, of Premier Performance Partners, gave a great talk outlining various service program models. She warned against getting locked into a contract that could make it hard to change strategies at a later date. Although multi-year programs are promoted as good deals, they are not.
Maintenance costs can be reduced by more than 60% through the intelligent mix of service options. These begin with utilizing your hospital's in-house healthcare technology management department to assist in developing a plan for your unique situation.
Factors that affect the right mix of service coverage and service providers include: hospital size, proximity to a major city, amount of equipment redundancy, equipment utilization and availability of alternate service providers.
On another note, I am working as part of a committee with the Association for the Advancement of Medical Instrumentation (AAMI) to develop a standard for medical device serviceability. It is still in its early phases, but the standard should include such aspects as openness of the design, availability of passwords and degree of granularity of repair parts availability, among other things. Stay tuned for updates as they occur.
When a group of 30 people influential in the biomed field met in May 2010 in Arlington, Va., our goals were to examine the future of the biomedical/clinical engineering/medical equipment maintenance arena and to select the most appropriate name for the profession. Attendees included biomedical educators, clinical engineers, BMETs, manufacturers, ISOs, directors, nurses, administrators, and the Office of Veterans Health Administration.
Most of the cost of the meeting was born by the Association for the Advancement of Medical Instrumentation (AAMI), which contracted professional facilitators to guide the process.
AAMI was a participant, like everyone else, but it didn't exert a domineering role in the process to choose a name. For two grueling days, we discussed a variety of factors, eventually narrowing the field of suggested names down to a few. After eliminating "Clinical Engineering" and "Clinical Technology" and carefully debating whether "Support," "Service" or "Management" should be included in the name, we decided that "Healthcare Technology Management" was the best and most inclusive description of our profession. Everyone in the room stated that they could support the new name.
We felt this name was accurate, easily understood by the public and other healthcare workers, and allowed for expansion of the field in the future. The word "engineering" was limiting from the administrator's perspective and unworkable from the educator's perspective; we knew a college would never include "engineering" in the name of an associate's degree program. Likewise, the word "clinical" limited the scope of the profession to hospitals, when healthcare is clearly moving outside of hospitals. Lastly, the names "support" and "service" seemed to be passive and imply a sideline role instead of a leadership role.
There will be a follow-up meeting in Arlington in September 2012 to update our plans and evaluate the successes to date.
GPOs and materials management personnel are rewarded by the amount of money they can save TODAY. Their contributions (or lack thereof) toward equipment purchases are long forgotten by the time the service costs roll in. Budgets and bonuses are yearly, so reward systems that encourage behaviors that look into the future are nonexistent. And I do not know of a single reward system or performance metric that takes into account future projected costs or savings. Savings are rewarded after the fact, not prospectively.
I think shortsighted budget strategies are the heart of the problem. They have encouraged hospitals to look only at the cost of equipment acquisition, largely ignoring any aspects of future service, and to place value on immediate savings rather than possible future savings.
Sellers of equipment are encouraged to give away virtually anything it takes to win a sale because they are confident that once you own it, they have you as a captive audience to sell preventive maintenance, service, parts, and upgrades. And as long as they are allowed to password-protect machines, refuse to train biomeds, and withhold service manuals, procedures and techniques, they can charge anything they darned well please. This is how they plan to recoup the money that they gave up during the sale.
I have heard many a materials manager report to their boss (usually a CFO) that they saved 47 percent off list price, and this $270,000 was attributable directly to their negotiating expertise and the hard line they took with the manufacturer. There is no one to refute this or to present to the CFO the fact that everybody gets 47 percent off of list price. There is also no one present to tell the CFO that the hospital, in order to get this 47 percent discount, has just signed a five-year non-cancellable contract for full service that will cost the hospital an extra $450,000 over the next five years. This information, if revealed to the CFO, would demonstrate that the materials manager in fact cost the hospital $180,000 in unnecessary costs over the first five years that the equipment is in use.
Hospitals can save a great deal of money by looking at the entire life-cycle costs of owning and operating medical equipment.
Let's face it--we all are under pressures to reduce costs and do more with less, all the while increasing patient safety, uptime, reliability and dependability of imaging equipment. You may not know it, but you have some free resources at hand to help with these tasks.
All hospitals have one or more people who repair medical equipment throughout the hospital--the heart monitors, infusion pumps, thermometers, and so forth. Even if you are not using these people to repair your imaging equipment, they can
still be a help to you.
Called "biomeds," clinical engineers, BMETs or even imaging engineers, these specialists are trained in the repair and maintenance of electronic medical devices. They were trained in the military, a technical school or a university. If their specialty training is in the medical field, they will know a good bit about anatomy and physiology and have enough accounting and finance knowledge to be able to evaluate the economy of various service options.
It would be a good idea for you to meet these guys (and gals). They probably "live in the basement" and may be in an independent department or report through a facilities or materials manager or to the IT department. Here would be my plan
for getting familiar with these resources in my hospital.
1. Call the main hospital phone number. Ask for the "biomedical" department. If the operator is clueless, ask for the people who fix the broken heart monitors.
2. When you have the correct department (which may take a couple of calls), ask for the director or manager.
3. When you get them on the phone, explain who you are and ask for a meeting to discuss their department, their staff, their capabilities and their resources. They will be VERY excited, because the ultimate goal of every biomedical department is to be the servicer of the hospital's imaging equipment. Your call just made their day.
4. When the meeting occurs, ask the following questions:
- What is your background, training and education? (You should expect at least a bachelor's degree, 5 to 10 years of experience in the maintenance of medical equipment, a lot of service schools, and experience in hospitals and/or with
manufacturers. Focus on relevant experience related to imaging equipment.)
- How long have you been at this hospital? What was your last job?
- What is the size of the department? How many people? Their backgrounds? Their current job duties?
- Who employs the director/manager and all of the employees? Whose name is on their paycheck? They may be hospital
employees, but they may be contracted from an outside company. This wouldn't be bad, but you should be aware of it.
- Who does the director/manager report to the hospital? Is it an administrator? A vice president? The CFO? The facilities engineer? This is important because you will need to speak with that person in order to assess your organization's willingness and ability to explore the expansion of the department to help you out.
- Ask about record keeping. What software do they use? Do they document 100 percent of their work performed? How do they schedule and complete preventive maintenance? What sort of preventive maintenance completion rate do they achieve every month? The answers to these questions should be direct, firm and given without hesitation. If the director/manager
stumbles around or doesn't know, this is a bad sign.
- Ask about their training budget. How many dollars are spent by the hospital annually to train the biomed staff? (A good rule of thumb is approximately $10,000 per employee). Has the amount gone up or down significantly in the past five years? The training budget is the investment in the future. If a hospital doesn't train its technical staff, they cannot possibly keep up with new and future technology.
- Ask to get a copy of their policy and procedure manual. If you should decide to use their services, this will be the rule book from which they operate. It can tell you a lot about their practices. Read it and question anything that seems lax or inadequate.
- As a means of assessment, ask for some sample reports that they would provide if they did work for your department. Ask for a copy of a month's activities for an existing customer, e.g., intensive care. Every hospital has an ICU, which has lots of equipment and usually is not so large that the report size will be too great. Scan this, looking for good documentation and complete entries. Pay special attention to your ability to understand the entries written. If they are too abbreviated or cryptic, they will be of little use.
- Ask to see the last report they gave to their hospital boss. It is important to check out their writing style, the appropriateness of their communications and the clarity of the report.
5. If, after these questions and discussions, you feel comfortable with the competence of the in-house biomed staff, you then may embark upon a discussion of your situation. Let them take the lead. They should inquire about your current service arrangements, service providers, your satisfaction with them, and your motivation for seeking alternate services. If they don't seem to know what to ask, be wary of their abilities.
6. If you would like to test commitment and abilities, ask them to provide service suggestions or to take over maintenance of some low-risk equipment. Be sure to let them know that you are just trying them out and that your ultimate decision will be based upon your satisfaction with the work that you are having them do.
In-house resources can be a great help if they are educated, funded, motivated, and eager. But if they are afraid, under-educated or not supported by administration, you may be better off developing your own imaging services program as a part of the radiology department rather than using general services provided by biomedical staff.
Let's talk about the cost of obtaining labor from various sources for medical device repair. We all know that when an item (or system) of equipment is purchased new, the manufacturer typically offers a full maintenance package. It is good marketing to do this because obtaining a multi-year service arrangement at the time of equipment sale accomplishes several things for the seller.
First, it subsidizes the purchase by helping the manufacturer recoup some of the money that they had to give up in capital equipment discounts. Purchasing discounted equipment allows the buyer (the radiology manager or materials management or the GPO (group purchasing organization) to brag about how their keen negotiations and relentless pressure on the manufacturer saved the hospital double-digit discounts.
WRONG. You see, in order to win your business, every equipment manufacturer deeply discounts their equipment. Nobody pays list price for anything. Competing for your capital dollar necessitates that medical devices are grossly overpriced, so that huge discounts can be given to the "ruthless hospital negotiator." These discounts do cut into the corporate profits, so manufacturers try very hard to make them up by selling service agreements which span many years and cover parts, labor and some other (nod, nod, wink, wink) normally uncovered costs like software updates.
Second, selling service at the time of sale leaves a major player out of the loop--the hospital's clinical engineering manager or director. (Previously called biomed, medical equipment maintenance, imaging engineering or some variation thereof, the profession recently adopted a new name which you may be seeing more: healthcare technology management, or HTM. Designed to encompass all aspects of medical device maintenance, repair and management, HTM slowly will replace the other names and provide a uniform name for a desperately fragmented profession.)
Signing a full service agreement without the input of the hospital's professional service manager at the table is a great way for manufacturers to get hospitals to agree to unneeded and expensive add-ons or coverages that guarantee extra charges for premium service. I liken it to going to a divorce and relying on your spouse's lawyer to write an agreement that is best for you. It just won't happen. And if you sign it, you cannot back out because it only allows cancellation for "cause," a term that does not include incomplete coverage or vague language.
Third, it guarantees a cash flow for the manufacturer. They say that the multiyear contract protects the hospital from rate increases. Well, it does lock in the price. But as a specific model of equipment is in use longer, the costs of maintaining it actually goes down. As competition, parts and repair knowledge become more widely available, competition drives down costs. Those buyers who signed a multiyear contact actually spend more than if they had elected to follow another maintenance strategy.
Fourth, it limits your availability to alternate service remedies. The manufacturer is not always the best source of repair and maintenance resources. Parts, techniques and repair strategies available from third parties and your own inhouse HTM engineers often surpass the original manufacturer's abilities. After all who can get to the operating room quicker--someone stationed in your hospital, or someone dispatched from 80 miles away?
The bottom line: never sign a service agreement at the time of equipment purchase. The cards are stacked in the seller's favor and you will pay more in the long run--and may be less satisfied overall.
For 37 years, I have worked for hospitals or for companies who fix medical equipment for hospitals. In this role, I've been the advocate for the hospital and ultimately, the patient. I always have been conscious of the cost to the hospital and the effects of medical maintenance costs on the overall cost of health care. When I moved into management 33 years ago, I also became aware that the total cost of maintaining a medical device extends far beyond the hourly rate that the repairer charges you when it breaks.
Total cost also includes the costs of preventive maintenance, which is frequently required by law, and can be performed as often as monthly. Preventive maintenance is tough to schedule when you have an item such as a CT scanner which supports an emergency department. Many companies charge a premium to come perform your PMs late at night or on the weekends, when volumes may be lower.
Equipment downtime is another factor. For the same reason that you cannot voluntarily schedule a busy machine down during a workday, you cannot afford to have it broken for several days while parts are ordered or less-than-qualified people experiment on how to fix it. You, more than anyone else, are aware of the revenue-generation implications of high-end imaging devices.
The cost of maintaining a medical device also includes customer and physician satisfaction. If a patient drives three hours for a procedure, only to be sent home because it doesn't work on that day, he or she (and their family) isn't happy. And it doesn't take too many broken appointments for a physician to begin using a more reliable imaging center.
So, there we have it. The decision of where to obtain your maintenance service is important. And it's a decision which carries significant financial rewards for the providers of the service. Medical device service is profitable and service salespeople will employ many tricks and tactics to lure you to their company. It will be my job to tell you the real story about what you hear from all sides.
The choices we will discuss in future blog posts include manufacturer full-service contracts, manufacturer limited-coverage contracts, third-party contracts, and hospital-based service, which can either be provided by hospital-employed engineers or by individuals contracted to the hospital by an outside service company. Then there is the service which is handled on a demand basis--no contracts and all services are paid for as they are required.
Each of these choices for a service provider can be the best in the right circumstance. None is the absolute best solution for every scenario. We also will discuss how to determine the best mix or blend of service for your particular facility.