By Joseph A. Haduch, MBA, MS

As hospitals are restructuring to meet new government mandates, and as facilities are moving toward more accountable models of care, clinical engineering managers are tasked with finding creative ways to cut back on expenses and offer greater service value to their organizations. UPMC/Biotronics is no different from any other hospital or health system facing these constraints, so we have had to figure out innovative ways to approach our business.

One of the ways we are looking to reduce service expenditures for our in-house clinical engineering department is by reviewing existing contracts with OEMs and finding ways to work cost-effectively together as partners. Especially with hospital consolidation becoming more common as healthcare reform evolves, finding ways to work with a flexible OEM to tailor service agreements is a necessity for any growing health system.

In today’s fiscal environment, there is certainly an ebb and flow when it comes to business and revenue. As many clinical engineers know, the amount of service coverage and risk that a hospital assumes on a piece of equipment often depends on the budget allocated to that device. Flexible service contracts allow biomedical departments to respond to these fluctuations by increasing or decreasing the amount of coverage on a piece of equipment or modality, depending on changing organizational or department needs.

As clinical engineers, we need to be fully engaged in the process and evaluation of all medical equipment service contracts currently active and offered by OEMs. Though your in-house department may not have the personnel or skill set at the current time to assume equipment that is covered under full service agreements, it is important for you to realize the cost benefits and service challenges should you decide at some point in the future to take over those services. With flexible contract coverage, you can easily select the level of coverage that suits your organizational needs without having to wait for the expiration or anniversary date of your current service contract.

Before diving any deeper, it’s important to take a step back and better understand the different levels of equipment service coverage that currently exist in the hospital landscape. A full-service contract consists of an OEM owning all aspects of equipment maintenance and service. Often, the OEM will have a team of biomedical engineers that work at the hospital to provide real-time, on-site assistance. In this situation, the OEM maintains all risk when it comes to the pieces of equipment. With a shared services contract, the hospital and the OEM work together to jointly assume risk for the equipment and its maintenance. Hospitals will often have their own in-house biomedical engineers that take care of the day-to-day equipment service, but can rely on the OEM for parts, remote assistance, or on-site calls for larger jobs. While it seems pretty black and white when it comes to service contracts, things can actually become quite complicated depending on fluctuating need. This is where having the ability to choose from a range of options for contract coverage comes into play.

This type of flexibility and breadth of service contract coverage also helps mitigate challenges with hospital consolidation. At UPMC, we rely on our OEMs, especially during acquisitions and consolidation. For example, we’ve been able to work with GE Healthcare through the various processes and challenges that come with acquiring a new hospital to effectively utilize staff and facilities across the health system. With our current GE contracts, UPMC has the capability to increase and decrease coverage based on the staffing or skill sets of the in-house engineers at newly acquired hospitals. This has helped BioTronics maintain high-quality service across our health system while also allowing for new staff members to come up to speed as part of the UPMC system.

One of the most critical factors of contract management is risk, and how best to minimize it while maximizing the value of your service contract or service offering. More expensive full-service contracts will minimize your risk but may not provide the best value to your organization. Lower-priced in-house support agreements will lower your costs but will also expose you to greater risk for parts and labor expenses. Having the ability to adjust contracts based on immediate need helps minimize your facilities’ risk exposure as factors such as patient volumes and equipment age evolve.

In addition to meeting the dynamic fiscal demands of our facilities, service agreement flexibility also helps ensure all clinical engineers in the health system have the best training possible. As with any organization, staffing and experience levels can fluctuate. Fortunately, service contract flexibility enables clinical engineering managers to add training and related support functions in order to cover the needs of the health system at a particular time.

Having a range of service agreement choices that adapt to different types of equipment also helps hospitals and clinical engineering departments focus on both long-term and short-term strategic planning. The support and flexibility of OEMs enables biomed departments to make decisions based on the evolving needs of their staff and the dynamic needs of the healthcare system in general. In addition, facilities can commit to service agreements at the point of sale knowing they will have the ability to amend it. By constantly and conveniently being able to increase and decrease coverage, hospitals and biomed departments can deliver high-quality patient care and service, knowing that no matter the circumstances, their service needs will always be covered. Increased service agreement flexibility is leading to better relationships between OEMs and in-house clinical engineering departments as the two move toward a partnership in the greater goal of delivering quality service and patient care.

As hospitals and health systems prepare to meet the challenges posed by the Affordable Care Act, administrators across the country will increasingly look toward their clinical engineering departments to find unique ways to minimize equipment service costs and risk. By developing strong OEM service partnerships with flexible service agreements, clinical engineering departments can solidify their position as an innovative service provider. It is this kind of forward thinking that will guide us successfully through the ongoing healthcare evolution. 24×7

Joseph A. Haduch is director of imaging services at UPMC/BioTronics, Pittsburgh. For more information, contact 24×7 editorial director John Bethune at [email protected].