How to Reduce Medical Imaging Equipment and Service Costs
Medical imaging equipment is often one of the most expensive line items in a facility’s budget, and a frequent target for cost-cutting efforts. When looking for ways to reduce costs, healthcare administrators typically focus on the purchase cost of new equipment and the ongoing cost of service. While this focus is a good starting point, a more comprehensive view that includes revenue and imaging department operating costs may yield additional opportunities for cost savings, patient experience, and user satisfaction. Review some of the ways to reduce the costs of maintaining medical equipment.
Reducing Capital Costs
More often, equipment purchases replace an older, outdated, or less reliable system rather than create new offerings or significantly different capabilities. Imaging equipment tends to follow the broader technology curve. Despite ongoing advances, the cost of a new device with the most updated technology pales in comparison to the cost of a late model, certified device. Viewed over time, a facility may be able to upgrade equipment 2-5X faster using certified equipment, or a judicious mix of certified and new equipment to balance patient throughput, imaging capability, and cost-constrained budgets.
Leasing and rental of equipment are additional options to reduce capital costs. Leasing is worthy of consideration for medium term needs or situations where frequent upgrades are desired. Rental is generally the most expensive option and should be reserved to cover short term needs or low volume situations where a purchase cannot be justified.
Other ways to reduce capital costs include performing thorough assessments of equipment utilization and patient scheduling. It’s possible that workflow changes could allow for tighter scheduling and increased throughput. Extending coverage hours or adding a shift could similarly increase equipment utilization; creating the opportunity to eliminate or put entire systems into backup status.
Reducing Service Costs
Service costs are easily viewed as the cost of repairs and maintenance, or the cost of service contracts plus risk-based and time and material costs. This view of service cost is a good starting point, covering a broad array of options ranging from OEM service, ISO service, in-house service, and hybrid models of on-site, dedicated ISO service. A good starting point, while also opening the aperture to include administrative costs such as contract negotiation, management, AP/AR cost and performance monitoring.
User protocols can also impact service frequency and cost. Two good examples are ultrasound probe care / cleaning and CT tube warmups. In both examples, users can directly impact cost by following best practices and manufacturer protocols to extend equipment life.
It’s also worthwhile to estimate service costs related to lost revenue, patient scheduling, clinical scheduling, and the resulting patient experience and clinician satisfaction outcomes. A service partner with flexible or low-cost after-hours service can have an outsized impact. A robust cost focus is a good start, while a more comprehensive view is likely to yield a partnership with larger and longer-term benefits. Original Equipment Manufacturer (OEM) service requires is often the most expensive option. It’s also the option that is least likely to create a long-term hospital operations partnership.
In-house maintenance programs require intensive effort to design, implement, and maintain. This can be a low-cost option if the program is comprehensive and is successful at completing the majority of service using in-house engineers. Alternatively, if the program relies on frequent calls to OEM’s and other providers to complete service events, costs can escalate quickly, to the point that the facility may end up paying exponentially more for their program due to additional time and material costs.
Independent Service Organization (ISO) service from a qualified provider is frequently viewed as the optimal solution, providing robust service, lower costs, and a tailored partnership approach. Similar to OEM’s, the best ISO’s invest in ISO13485 quality processes, technical training programs for engineers, and reliable parts supply chains that use OEM certified parts. Frequently, the ISO’s are silent partners for OEM service, providing direct parts repair services to OEM’s, or providing certified repair parts to OEM’s for their service operations. In such cases, the same parts and repairs are available at lower cost through an ISO. Another key difference is flexibility; OEM’s may require engineers to replace large components, such as an entire workstation computer. While this makes sense internally to the OEM, the resultant parts backorders and time-to-repair onsite can be excessive. ISO’s share a common perspective with healthcare providers: to reduce cost and downtime. As such, it is more likely that an ISO engineer troubleshoots that same workstation and replaces the defective component, such as a video card or hard drive, at a much cheaper and more efficient repair cost.
Finding the Best Cost Savings Option
The need to reduce hospital and imaging clinic operating costs is here to stay. Equipment life cycles of 10 years are not uncommon; thus, it makes sense to take a broader, multi-year view of cost when evaluating strategies. The cost view is likely enough to narrow down alternatives across ISO, in-house, and OEM strategies. Determining the right approach for your situation depends on your clinical and organizational needs. Reducing the overall cost of medical equipment can provide substantial savings for a healthcare facility. Partnering with Crothall Healthcare can make identifying improvements and process standardization easier. As a result, a facility can lower the procurement, maintenance, and repair costs for critical equipment.
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