Healthcare organizations continually evaluate service and support contracts, exercising their tolerance for risk versus reward. Ideally, an HCO would receive a 100% (or greater) return on a contract compared to what they would spend for costly repairs and PMs and minimize downtime, thanks to proactive support. Regardless of contract coverage, this is what HTM strives to accomplish daily in supporting the medical equipment inventory.
Considering the stakeholders in a contract decision generally includes the user/owner, supply chain procurement, HTM, and finance. Each group has something to gain (or lose) in the ‘decision by committee’ to add or decline contract coverage. So, who has the loudest voice or tie-breaker vote when determining need? Historically, it’s the user/owner; however, in light of tight budgets and cost-saving initiatives, these unilateral decisions to add coverage are under greater scrutiny.
Equipment downtime and unanticipated repair costs are at least an inconvenience and, at most, a catastrophic event, especially when you’re a clinical leader. There’s a significant incentive to wrap yourself in the warm blanket of a service contract when you’re convinced that a contract offers predictable spending and an uptime guarantee and lets you avoid healthcare delivery woes. The problem is, even a platinum level, 98% uptime guarantee contract can’t solve supply chain parts issues, FSE availability, obsolescence (‘Company X will make every reasonable attempt…’), or avoid costs when a water pipe breaks in the ceiling or that expensive console falls off the cart. 98% uptime means your MR can be down for six business days in a row, which doesn’t include the weekend. And if they fail to meet the uptime guarantee, the support provider’s only punishment is to give you some money back, which won’t be near the revenue lost during downtime. Maybe a support contract isn’t the warm blanket we thought it was.
So, how do stakeholders read from the same sheet of music and make an informed decision about contracts? Our organization didn’t invent it, but it does often deploy the corporate slogan “Head and Heart, Together.”
