A Workable Plan—Smart Service Contracts

by Julie Kirst 2/9/2009 9:19:00 AM

Although many departments have brought a lot of service in-house, many still use service contracts in some way. The Service Solutions section of the February issue of 24x7 focuses on making wise choices when negotiating service contracts. Joe Medina, AAS, biomed department supervisor at Exempla Good Samaritan Medical Center, Lafayette, Colo, offers some good advice when considering the coverage you need. To customize coverage down to each piece of equipment, Medina reviews and discusses usage and coverage needs with the user groups. “If we have one CT, we may want 24/7 coverage, but with two, they may not need the same coverage if they perform differently,” he says. “That’s when you involve the user groups, asking which is used most and which provides the better images, and maybe that one gets greater coverage in the contract than the other.” This saves on pricing without negligibly risking uptime security.

How do you plan your coverage? What have you discovered works best to get the coverage you need? Share your best practices here, and be sure to read the upcoming article, Essentially Smart Contracts, for more tips.

 

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Comments

Posted by Ron Perfater, 3/3/2009 9:46:34 AM

Determining the service needs for a clinical technology always boils down to a "Make vs. Buy" decision. Assuming you have a clear understanding of the device or systems service history, you can better anticipate the future service and support needs of the system. Once you have this accomplished, then determine your own in-house capabilities to support the device or system. If this capability is present, then be sure you have a menu of service options to work with. Vendors have a wide variety of service options and some will work with you to create a custom option depending on your needs. Some of the basic include;
1) Full Risk (T&M) 2)Parts only agreement 3)Shared Risk to provide access to diagnostics and tech support 4) PM only or some combination or variation of these.

These days the OEM's rely on their service divisions for a large portion of their revenue streams and as such generally have a healthy margin built into their service programs. My advise is to develop your in-house talent to enable you to provide as much service and support that you can for yourself. Joe Medina is correct that the service approach may be unique to each device however the process of how you arrived there should be consistent. Develop a service and support master agreement with your major OEM's that will allow you the flexibility to seamlessly move from one vendor service offering to another as your needs or capabilities change. This will allow you the ability to meet the equipment and customers needs while you continue to develop your teams capabilities. If possible, compare your discount structure with your colleagues. At the end of the day, purchasing the least amount of service as necessary from the OEM will allow you to maximize your financial savings impact to the organization. Done properly and you position yourself well with your customers and hospital leaders.
Don't have the in-house ability to service? Then consider a 3rd party provider or going T&M and pay as you go. Chances are you will come out ahead unless of course the vendors' techs are there so much they qualify for a discount in the cafeteria! In this case a full service agreement might not be a bad idea.

Ron Perfater
System Director - Clinical Engineering
Sisters of Mercy Health System
St. Louis Mo.

Posted by VSarmiento, 3/4/2009 7:24:09 AM

Another option that one may find useful is utilizing an equipment  maintenance program through an insurance underwriter.  What must be done as a prerequisite to this venture is to get or solicit a written proposal from any chosen service vendors, including the OEM companies. Whatever type and level of services pre-negotiated from any chosen vendor(s) can then be submitted to any insurance underwriter for a counter proposals.
Remember the pre-negotiated service proposals from chosen vendors will be used as the reference and any chosen vendor(s) will also be the one providing the level of services chosen. Typically, the service type will either be on T/M or a full service contract (less consumables) depending on the type of equipment. Chosen vendor will act as the main or sole sourced service provider(s) for any given type/ brand of equipment.
I had utilized and been successful in implementing some of my cost saving ventures in the past.   Through the annual insurance premiums, one normally can realize a cost saving saving ranging from a minimum of 15% to  30%, while maintaining the same level of services that can be expected or  available from any chosen service providers.  
  

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