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Reducing Clinical Equipment Service Costs

Hospitals realize that they are spending a great deal in the area of equipment service.  Even with this knowledge, at times, hospital administrators do not know exactly how much they are spending on diagnostic clinical equipment maintenance.

It is challenging to determine the actual cost for several reasons:

  1. Service contract management may be decentralized.  If the hospital hasn’t had strong leadership in Biomedical/Clinical Engineering, or that department is not empowered to make contract decisions, then Clinical Directors have likely been creating their own contracts for equipment such as CT, MR, Ultrasound and Diagnostic imaging.  In some instances, surgery departments have independently contracted out for Anesthesia equipment.  If service contract cost data is not centrally tracked, there is no way anybody can effectively manage service contracts and additional time and material expense.   Different clinical departments creating relationships with different vendors dilutes the hospital’s purchasing power and increases the cost.  Decentralized service contract management, ensures that you will pay more and have an inaccurate picture of expense.
  2. In-house resources are in need of investment.  Even with strong management in Clinical Engineering, there is constant pressure to reduce staff, budgets and training budgets.  If the existing staff is not trained to handle the new technologies, service contracts will be required.  Service contracts are always a more expensive service management solution than relying on the expertise of in-house staff.
  3. The cost of operations after warranty is not considered.  Sometimes when making clinical engineeringpurchases, those deciding do not look at the cost of operations after warranty when investigating new technology.  It may be possible to replace an old CT with an annual service contract of $200,000 and buy a new CT with a 12-month warranty.  However, after the warranty period, the annual cost of service is $500,000.  In that case, the better decision is to keep the old CT for a year or two and save significantly in the long run.  Each significant purchase needs to consider service in the purchasing negotiation.  Many hospitals only learn the true cost of their new technology post warranty when the warranty expires and they have very few options at that point.

This post was written with support from Mary Ann Kelly.

To learn how Soriant Solutions can help you reduce costs in Clinical Engineering and all areas of Support Services, contact us at 770.777.6633 or

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