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Business Advisor
Consolidate Your Equipment Service Contracts
Gayle Evans
Publish Date: September 4, 2008

Should you purchase service contracts directly from capital equipment manufacturers? I say no, probably not.

While you don't want to be stuck with a broken piece of expensive equipment a year or two after the purchase date, consider that the cost and hassle of signing individual contracts for biomedical and preventative maintenance for everything from sterilizers to electrocautery devices to anesthesia machines is awfully high. If you were to sum the annual cost of each manufacturer-based service contract, you may find that you could own a new piece of equipment with what you're spending on maintenance.

It's customary to enter into a service agreement with the manufacturer for the first year after purchase as part of the warranty. But while many manufacturers offer discounts if you sign a multi-year agreement, you may be able to save more by getting a local, third-party biomedical contractor to cover multiple pieces of equipment under one contract. Besides cutting costs, the consolidation approach eliminates the tangled web of paperwork that results from having a separate contract — and contact — for each piece of equipment.

Third-party biomed companies are small-service providers or hospital engineers that follow the recommended guidelines for equipment repair and maintenance. They're typically certified as biomedical engineers, and they've been trained either by one of the major equipment manufacturers or by a local hospital. As an added bonus, their local presence likely means a prompter service response.

What needs to be covered?
Before you go shopping for a third-party contractor, take inventory of the equipment in your facility that requires annual or semiannual biomedical checks. List the type of equipment, manufacturer and model number. Not all biomedical companies will service sterilizers or anesthesia machines; you may need an additional contractor to perform those services. Vendors who provide anesthesia machine service may also be able to perform waste gas analysis — that's another cost-saving opportunity.

The rule of thumb for whether to purchase a service contract for a particular piece of equipment is, "Does it directly affect patient care?" If the answer is yes, then it should be covered under some type of service agreement, depending on the manufacturer's recommendations, regulatory codes and accreditation standards. Service for specialty devices such as anesthesia equipment will be determined by the way the equipment is used (for example, general anesthesia vs. conscious sedation).

Have all electronic equipment directly related to patient care checked for electrical safety. This includes all monitors, defibrillators with electrical power, electrocautery and specialty equipment such as scope systems, phaco machines and lasers. Any equipment in the OR, pre-op and post-op units that are involved in patient care should also be included in the inventory for service.

Check computers associated with patient care if they're attached to a system that's going to provide some aspect of treatment. One of the simple problems the biomedical engineer will be looking for is an electrical shortage in the system that could generate a shock or a spark that may cause a surgical fire. In general, the biomedical engineer should know what type of service is required for each item and how often it will need to be serviced — annually, semiannually or quarterly.

Finding a local, third-party biomedical engineer may be as easy as looking at who's currently providing service for your equipment. Many manufacturers use regional subcontractors to provide local service. You may be able to cut out the middleman and contract that local engineer directly. Ideally, your biomedical service provider should be able to:

  • install, inspect and test equipment to ensure functional qualities using blueprints, written specifications and standard or specialized test equipment;
  • disassemble equipment to locate causes of malfunctions or inaccuracies;
  • repair or replace defective parts;
  • reassemble equipment and adjust precision components;
  • notify manufacturers or distributors of unfixable equipment malfunctions to arrange for repair;
  • perform safety checks on electrical and radiation equipment and monitor maintenance/repair records;
  • add to or change original components to meet specific therapeutic or diagnostic requirements;
  • keep maintenance and repair records;
  • train users to operate equipment safely;
  • maintain supplies and parts inventories; and
  • provide loaner equipment when necessary.

Other items to consider when weighing proposals include the frequency of inspections, hourly service rate (including after-hours service), travel costs and the proximity of the service provider to you. Ask about volume discounts. How much can you save by covering 50 pieces of equipment instead of 35? The contractor's response time to requests for service is crucial. If you have to wait too long for a piece of equipment to be repaired or replaced, it could result in cancelled cases. Negotiate the cost of after-hours service for items you can't be without.

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