The success of an in-house ultrasound equipment- maintenance program relies on a commitment to adequate staffing and resources

—Tim Burke, CBET,
Genesis Medical Center,
Davenport, Iowa

When proponents of hospitals maintaining in-house ultrasound equipment-maintenance operations dangle savings of up to a whopping 64% before them, it’s no wonder executives and biomedical equipment technicians (BMETs) at those institutions are starting to pay attention. Moving ultrasound equipment maintenance on-site can mean smoother, faster repairs by a well-trained team of experts who can also manage maintenance on other high-tech devices at the facility.

But in-house maintenance requires a fair amount of homework and a commitment to adequate staffing and resources. A fail-safe maintenance contract for especially tricky repairs may also be necessary. Otherwise, a hospital trying to pare its expenses by bringing maintenance on-site risks adding to repair costs, alienating both maintenance staffers and outside technicians, and—worst of all—compromising the institution’s overall quality of care.

Inside Cost Savings
A few years ago, Genesis Medical Center, Davenport, Iowa, transitioned from a contract with an independent service organization (ISO) to a combination of a shared service agreement with one vendor and an in-house maintenance operation for other equipment—and promptly saw double-digit savings.

“We previously had a third party managing all of our imaging equipment,” says Tim Burke, CBET, biomed supervisor at Genesis. “When we took it over, we were able to reduce annual costs on one company’s ultrasound equipment by 29%.”

Further, he says, his facility reduced its ultrasound costs for equipment by another manufacturer by 64%. “We now have a shared service agreement with that company, with probe coverage, including accidental damage, which saves us 52% off its full-service agreement,” he says.

He also points out that the third-party management company the hospital had been using purchased used probes that did not hold up very well. “The last two that were purchased before we took over lasted 2 months,” he says. Under the new shared service agreement, Burke was able to replace them with new probes.

That kind of discount was no fluke, says Jack D. McAuliffe, CBET, CEO of SonoDepot, St Cloud, Fla, a company that provides diagnostic ultrasound repair and maintenance.

“Typically, the ISO is approximately 20% to 40% less than a maintenance contract with the original equipment manufacturer [OEM],” he says. And an in-house program “should shoot for 20% less than the ISO.”

Caveats
McAuliffe cautions, though, that not all hospitals have the internal expertise to pull off such a program.

“Lack of experience or expertise, and overly ambitious cost-savings goals, can compromise quality and sometimes cause extended downtime,” he says. “You may have to go to the OEM or an ISO to recover from problems created by lack of experience. If that happens too frequently, it can eat up your cost savings and wind up costing more in the long run than having stayed with an out-of-house solutions provider.”

Joe Weidner, vice president at DITEC, a Cleveland-based school that trains service professionals on imaging equipment, including ultrasound machines, also advises hospitals to be careful that they have the knowledge they will need to run an in-house ultrasound-maintenance program.

In-house BMETs, he says, “may not be trained on the newest ultrasound systems and, without an outside contract, they have no tech-support system for help.”

Equipment can be problematic as well, Weidner continues, warning that, “In-house departments may not have a supply line for parts for all of the different ultrasound systems they service.”

From Burke’s perspective, however, the only real drawback to relying on an in-house ultrasound-maintenance department is the risk to the department head’s reputation if something goes wrong.

“It is possible, with a properly managed in-house program, to save money, improve response time, and strengthen the value of the in-house biomed department,” he says. “[But],if you jump in without proper planning and fail, you could end up damaging your reputation, something that you can’t easily earn back.”

Weidner adds that some of the cost savings of an in-house maintenance department come from the fact that OEMs charge for service time and travel time. And he notes that in-house service professionals know the operators of the facility’s ultrasound equipment and generally have a good working relationship with them. Even McAuliffe, the ISO executive, says that an in-house program can generate cost savings for a facility and concedes that, “Minor problems can be quickly corrected to minimize unnecessary downtime,” under that scenario. Of course, he also points out that an in-house technician “can be the eyes and ears for a service specialist with an ISO or an OEM.”

Working With the OEM
Don’t dismiss that notion of in-house technicians working well alongside OEM technicians.

On the one hand, Weidner says, “All OEMs try to get rid of in-house service programs, as they cut into their profits.” Failing that, though, “They will work with in-house departments, as a piece of the pie is better than none at all. Also, they want to be able to sell new equipment to the hospital.”

And, McAuliffe points out, hospitals can purchase OEM expertise “at a lower cost than conventional service contracts.”

In fact, Burke’s experience points to even better relations between hospitals that go in-house and the manufacturer’s reps they leave behind when they do. “We have had generally good experiences with our vendors,” he says. “It is especially important to not treat them as an enemy, but as someone you are trying to do business with.”

Indeed, Burke says, he recently spoke with an OEM that lost a lot of business to the third party he chose for injectors. “I told [the OEM rep] up front that I was looking at third parties—and why I was,” he says. “He understood and even thanked me for being honest with him rather than giving him the runaround.”

Burke adds, “The front-line people of all the companies I have dealt with have supported us and understand our need to save money.”

But while relations may not be as tempestuous as some may assume, hospitals that set up in-house ultrasound equipment-maintenance programs cannot get complacent, Burke emphasizes. “Many imaging vendors are protective with their software,” he says. “In our total imaging program, we sometimes have been able to negotiate the software. But one company made the annual software license cost more than a full-service agreement.”

That, he stresses, “is one area where hospitals need to fight back against vendors. As a technician and a consumer, I think software licenses to access repair information are ridiculous. The auto industry has attempted that and is experiencing an organized backlash. It’s not like we are asking OEMs to tell us how to repair their equipment. We only want access to the diagnostic information for our own use.”

Best Candidates
Philosophical battles aside, Burke says hospitals of all sizes should take a look at bringing ultrasound equipment maintenance home.

“As with any biomed service, economies of scale make it easier to develop a business plan and cover start-up expenses in a larger hospital,” he concedes—and other experts agree.

“The best candidates are the mid- to larger-size facilities that are more apt to have redundant equipment and multiple service technicians to assist and back up,” McAuliffe says.

Nonetheless, Burke adds, “I think any size hospital could look at ways to reduce costs as compared to a full-service agreement.”

Weidner agrees. “Look at your existing contracts and see if an in-house ultrasound engineer can save money,” he suggests. “Your in-house budget will increase—but the point is for the savings on external contracts to cover the increased salary commitment and still improve response time and save costs.” If that’s not the case, he adds, don’t give up on an in-house program just yet.

“Look at your sister hospitals’ in-house programs and see if they could service your hospital, too. That way, several hospitals share an in-house program, so they all see some savings,” Weidner says.

Homework First
However the resulting maintenance-program functions, it should start with basic research, Burke says.

“Review your equipment inventory, service histories, and service costs,” he advises. “Talk with other in-house operations to get their experiences with the same type of equipment. And talk with third-party repair resources and tell them what you are planning. Many of them are a great source of information.”

Burke even recommends talking with the OEM you’re going to ditch to let it know what you are planning. “Ask the OEM what it can do to support your in-house program and why they are a better choice than a third party,” he says. “Finally, you will need to attend some type of classroom training, either third-party or OEM.”

Burke’s department planned the move in-house for almost a year, he says.
“During that time, I developed a spreadsheet of historical costs and cost projections, and a timeline. I also had many conversations with other hospitals, OEMs, and third-party suppliers,” he says.

Technician training will be required as well, the experts emphasize. And while the costs can be steep, the payback is there, Burke says.

“If you are buying new equipment,” he says, “work with your purchasing department to negotiate free training—or at least get it included as part of the capital expense, if your organization allows that.”

McAuliffe agrees that direct and indirect training costs are “quite high.” He says training will generally run about $3,000 to $5,000 per model, plus travel expenses.

“There is a large time investment in understanding the proper function and operation of the system besides understanding the repair and troubleshooting skills needed,” he says. “I would guess a solid year of experience is necessary to become moderately proficient.”

The problem, he continues, is many in-house technicians never become proficient because they have to be so diverse.

“Another killer is technician turnover,” he adds. “Those factors, if not carefully factored in, can prevent the program from ever achieving its original cost-savings goals. When factored in, they may make the undertaking less appealing.”

The upside, of course, is ultrasound maintenance isn’t particularly labor-intensive. “The work can easily be made to fit into an existing employee’s schedule unless you have an extremely large operation,” Burke says. “Our ultrasound biomedical engineer also does radiology work, which takes most of his time.”

Indeed, a skilled, experienced technician should be able to maintain 20 to 30 systems, along with other duties, McAuliffe estimates.

The Bottom Line
Bringing ultrasound equipment maintenance in-house is all about controlling costs—so it’s crucial to know what those costs are going to be.

“Our average last fiscal year, including several probes, was approximately $7,800 per unit, all models combined,” Burke says. “That includes a couple older units that do not get much use.” Each facility’s mix of equipment and equipment manufacturers will vary, naturally, but McAuliffe says that hospitals can expect to spend approximately 6% to 8% of the replacement cost of the system on maintenance.

Indeed, Weidner says, “The costs will vary based on the age and complexity of the ultrasound system. On new systems, OEMs charge approximately 10% to 15% of the selling price of the system for a contract. For example, if the hospital buys an ultrasound system for $180,000, the service contract will be approximately $20,000. If the hospital owns 10 of those units, it’s looking at a $200,000 service contract.”

On the other hand, the hospital with an in-house engineer can negotiate that price down to closer to 5% of the selling price—or $94,000 as opposed to $200,000—“just due to his or her knowledge of the ultrasound business.”

That’s a 53% savings—and that’s nothing to sneeze at.

Russell Jackson is a contributing writer for 24x7.