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How We Got the Right Biomedical Service Plan for Our Facility
Thinking beyond one-size-fits-all approaches saved us thousands of dollars.
Linda Pavlak
Publish Date: December 14, 2007   |  Tags:   Ideas That Work

Like most small surgery centers, we don't have technicians on staff that can perform preventive maintenance on our equipment or do emergency repairs when something breaks. To keep our more intricate devices up to our state's and our accreditor's requirements, we have to bring in experts to certify that everything is in working order. Sure, it costs thousands of dollars to have a contract with a biomedical vendor, but we were comfortable knowing that even if something as commonly used as a cautery unit broke, we could get a loaned replacement while the original was being repaired.

But when our biomed contract was set to expire, we didn't immediately renew it. Instead, we ventured outside of our comfort zone to see if we could find savings by rethinking how much outsourcing we really needed. In the end, it's been a valuable and money saving exercise.

The need for outside help
When it comes to biomedical service contracts, two options cover most facilities: a comprehensive plan that covers all repair services and parts, or the bare minimum coverage necessary for electrical safety and preventive maintenance. With the former, you're betting that the coverage will cost less than the potential repairs, but with the latter you're taking a chance that you'll have repairs that your facility can't afford.

New facilities often get the full coverage and parts plans for any equipment that may not be under manufacturers' warranties. Even though most of their equipment is brand-new, a broken anesthesia machine can easily cost $10,000 to repair. That's a devastating sum if you still have months to go before receiving your first revenue payments from managed care providers. In situations where you can't afford to take that risk, it's probably better to buy protection.

But as the equipment gets older, many facilities cut down the amount of coverage they have on their equipment. Even though there's more of a chance that it could break down, the equipment would be less expensive to repair or replace at that point than to continue paying for a full-service contract. It's akin to having an older car — if it's only worth $500, you don't want to get a $1,500 insurance policy on it.

At our multi-specialty facility, we have a wide range of devices of varying ages. So instead of considering biomedical outsourcing as an everything-or-bare-minimum situation, we decided to customize a contract that would suit our specific needs. You might consider a similar strategy.

Since we had a mix of new and old equipment, we went through our inventory and identified the level of coverage each piece needed. For example, something still covered by the manufacturer's warranty only needed a preventive maintenance plan, while something that would be very expensive to repair received a full-service plan. That meant our endoscope sterilizers, carbon dioxide lasers, anesthesia machines and most machines with computer boards needed a comprehensive coverage policy.

Generally the more intricate pieces of equipment got the most coverage, but we also included full service for such essential items as defibrillators. In cases where it was hard to tell if occasional repairs were cheaper than contracted coverage, I'd go over the costs of repairing the device based on past parts and repair-hour expenses and compare that to the price set by our local biomedical service vendors. This proved to be time well spent.

Above the bottom line
But when it comes time to evaluate the need for biomedical services, cost isn't the only thing you should look at. Some of the other factors you need to review when considering how much help you need from biomedical vendors are safety, compliance and service.

  • Safety. You have to be sure all of your equipment is in working order, which in an OR means everything from having the monitors absolutely accurate to being sure all the electrical equipment is properly grounded.
  • Compliance. You have to keep your equipment up to your state's standards and, in our case, up to Joint Commission regulations. This means having it evaluated annually or semi-annually (or, in the case of anesthesia machines, quarterly). The service provider should give you the paperwork to verify this work was done and attach a sticker to the machine with the last inspection date. It's not uncommon for surveyors to pick a machine at random and ask for documents proving that you're properly maintaining it. So be sure you can quickly get to these records.
  • Service. You want contractors who can guarantee same-day or at least next-day service when you call them to report that something is malfunctioning. It's wise to ask if you can get a loaner for smaller pieces, such as a cautery unit or a monitor, so you can continue using your ORs. Another important point here is to ask for the company to do the repair work on-site, which is less disruptive than having them take something out and bring it back in later.

Searching for new options
Although our previous contractor did good work for us, we didn't renew our contract with the company, which only offered a blanket policy for everything in our facility. We wanted the flexibility to tier our coverage to save money.

We started by looking at several local companies that we'd worked with before. To make our selections for the best candidates, we asked about their prices, their services provided, if we could get recommendations from other centers and if they could provide loaner equipment. But instead of taking their quotes at face value, we also asked if they were willing to provide contract alternatives to provide preventive maintenance to some devices and full-service labor and repairs to others.

One of these companies was our supplier for new and refurbished equipment. We found out it also provided biomedical services for several centers in the area. The company was willing to handle our smaller devices, but not our more complex items such as the sterilizers and anesthesia machines.

Since we didn't want to worry about the huge repair bills, we asked another contractor to provide coverage for the more intricate equipment. The CEOs of these two companies met, went through our facility and worked together to combine their particular expertise.

They worked together to create a plan that gave us the levels of coverage we wanted for each item. The two companies ended up cooperating so well that we only had to make one monthly payment that they split between themselves. To be sure we are always ready for an inspection, we had them provide all the needed paperwork as well as electronic versions of all maintenance and repair records within two days of when the work was performed.

Make contractors work for you
By saying "this is what we need" instead of accepting the biomedical service provider's policies as "this is what you get," we managed to come up with a plan that will save us more than $30,000 a year without compromising patient safety or compliance with our accreditor's standards. The contract with the clinical engineering vendor we didn't renew was worth $60,000. The combined fee for the two companies we've signed with is less than $30,000 — $26,000 for the repair vendor and $1,800 for the preventive maintenance vendor. Our board of managers is pleased with the plan and willing to go at risk on some items. We also increased our budget for repairs for the following year on a just-in-case scenario, although we expect that because of the extensive planning and analysis we have done, we won't need to spend that additional money.

Available to you
Your facility can enjoy the same benefit if you're willing to venture outside your comfort zone of having full coverage or minimal coverage and money budgeted to handle repairs. The key is to look at your options and remember that change may not be a bad thing, even if you're happy with your current repair or maintenance vendors.

You also need to work closely with their biomedical service providers to be sure that they're getting the most for their money. This means knowing how much your repairs and equipment costs are by staying up on the latest repair records and thinking about how much the parts and service cost compared to the price of coverage. You also have to keep in touch with your physicians and staff to see what they consider essential for more coverage, so they can do their jobs without worrying about unexpected interruptions.

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