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Cutting Costs Without Cutting Corners

July 28, 2015

Everyone who owns a car knows that the costs don’t end with the financing payments. Along with paying for the vehicle itself, every car owner must pay for monthly insurance, fill up the gas tank, and pay for repairs and maintenance. Over time, the cost of maintaining your car could add up to even more than the car itself.

 

The same is true for hospital equipment. Like the car industry, hospitals invest significant portions of their budgets in maintaining and repairing medical equipment. Facilities can spend millions of dollars per year on equipment maintenance. But maintenance fees aren’t a fixed cost, and improving equipment maintenance and repair processes, both in terms of reducing costs and safeguarding the long-term reliability of their equipment, could help healthcare facilities consolidate their bottom lines.

 

Maintenance Is Key

 

Ensuring that medical equipment is properly maintained to realize its full useful life is a critical cost-saving opportunity for healthcare facilities. Imaging equipment, for example, remains a dominant technology in healthcare due to the long useful life of X-Ray, CT and MRI equipment, which typically ranges from two to three decades. Given this, it is in the best interest of hospitals to maintain this equipment. The useful life of an ultrasound machine ranges from six to eight years, which is significantly shorter than that of other imaging technology. Due to its safe, non-invasive method to obtain images, the reliance on ultrasound technology is escalating in the healthcare system. In addition, the technology advances more quickly on the software side than on the device side; therefore, healthcare facilities should look to save money and extend the life of their ultrasound equipment by retrofitting their old systems with the latest software.

 

Working With Repair Professionals

 

To properly maintain and service their equipment, healthcare facilities have the option of working with technicians from original equipment manufacturers (OEMs) or third-party repair organizations to maintain their hospital’s medical equipment. Improving service/repair costs and processes presents another opportunity for executives to shave costs and improve the bottom line.

 

The biggest benefit of working with an OEM’s service technicians is that they have first-hand expertise with the equipment. The OEMs also set the repair specifications for the entire industry so clinical engineers can be confident that their repairs will be reliable. However, OEMs typically charge more than third-party service vendors and traditionally take much longer to complete repairs, which results in costly machine downtime. To provide some sense for the impact OEM service contracts can have on a healthcare facility’s bottom line, the average service agreement cost for a single premium CT scanner unit can run up to $170,000 per year.

 

On the other hand, with the assistance of a knowledgeable third-party support provider, many simple adjustments and minor repairs can be conducted in-house by clinical engineers already on staff. This presents a tremendous opportunity for healthcare facilities to cut costs. Not only will the expenses associated with service vendors be trimmed, costly equipment downtime will also be reduced by eliminating the time it takes for outsourced field service technicians to reach the hospital. Overall, working with a third party vendor can save operators as much as 97% relative to OEM solutions. As healthcare executives become aware of this, more will look to empower their clinical engineers to conduct as many repairs in-house as possible and reduce on-site service calls.

 

Support Providers

 

In response, a more efficient and streamlined repair process is emerging among third-party support providers. Rather than immediately requesting a technician to the hospital when medical equipment malfunctions, clinical engineers are looking to expert third-party vendors to offer remote dial-in tech support to help them diagnose their own equipment. Depending on the results, they can then determine whether a field technician is required to fix the machines, or if a simple adjustment that they can do themselves will resolve the issue. As far as the impact on the industry, this new paradigm implies that outsourced field service teams will likely shrink and the most competitive vendors will offer around the clock support from equipment experts who can provide clinical engineers with the assistance they need to perform service repairs.

 

One concern that clinical engineers may have when working with third-party repair companies is that mistakes may inadvertently be made during the repair process. When parts are not repaired correctly there can be serious repercussions that could compromise patient safety. To allay these concerns, it is important for clinical engineers to authenticate every refurbished part so they can catch flaws prior to installation. This process can be streamlined by finding a trusted third-party vendor that consistently provides high-quality repairs and replacement parts. A good indicator of a company’s service quality is the length of its warranty. Companies with longer warranties provide higher quality parts that last longer. A vendor’s reputation in the clinical engineering community is also a good way to determine the quality of its service.

 

Healthcare organizations spend millions of dollars each year on equipment maintenance without realizing there are opportunities to streamline their service fees. Reducing expenses associated with outside service technicians and streamlining equipment maintenance and repair processes presents an enormous opportunity for healthcare facilities to reduce expenses. By partnering with a reliable third-party vendor who can help ensure the long-term reliability of expensive medical equipment, organizations can decrease their operating expenses and reduce the total cost of ownership on three fronts—the cost of parts, the opportunity cost of system downtime, and the reliance on outsourcing services.

 

LinkedIn Article here.

 

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