Last week I wrote about how in-house biomedical programs will be expected to do more with less as their hospitals face the challenges of the Affordable Care Act. I discussed taking action to reduce equipment damage which was the cause of a significant percentage of our work orders. This week, I would like to discuss an additional method that we used to reduce our workload and also reduce our spending for replacement parts.
Based on the analysis of our annual work orders we saw that a large number of them involved repair of infusion pumps. This was not a surprise, because we knew that we had many pumps in our inventory and that maintaining them required a lot of our time and money. We concluded from this information that if we could have our pumps serviced by the manufacturer at no charge, we could significantly reduce our annual number of work orders.
Although it seems illogical to expect manufacturers to service hospital owned devices at no charge, there are circumstances where it can work to their advantage. In most cases, manufacturers derive a lot of their revenue through annual sales of cassettes, tubing, and other pump related accessories. Depending upon the costs of these accessories, the average pump can generate as much as $1,000.00 per year in revenue for the manufacturer. A fleet of 500 pumps would generate more that $500,000.00 in gross annual revenue. Under those circumstances it is in the manufacturer’s best interest to be certain that the pumps operate as much time as possible. Based on this information, we realized most manufacturers would likely be willing to service a customer’s pumps at no charge rather than risk losing $500,000.00 in annual revenue.
We decided wait to until our multi-year contract for pump related accessories was ready for renewal before asking our manufacturer to take responsibility for servicing our pumps. During negotiations, we gave the manufacturer the following options; they could assume responsibility for all pump repairs at no extra charge, or they could risk that we would solicit bids from other manufacturers to replace our entire fleet of pumps. If we solicited bids for new pumps from their competition, they risked losing 100% of our annual business. We also stipulated that in the new contract, they would not be allowed to increase the price of accessories to cover the costs of repairs. When faced with the possibility of losing our business, they readily agreed to service our infusion pumps at no charge.
According to our agreement the manufacturer treated our pumps as if they were under a lifetime warranty and they would provide maintenance including all labor and parts at no charge. The exception would be any pumps that had failed due to abnormal conditions of use such as damage, or liquid penetration. We agreed to provide workspace for their regional serviceperson to work in our department whenever they came in to perform repairs. Also according to the agreement, their service personnel would provide us with detailed service reports that we could enter into our CMMS.
By “thinking out of the box”, we were able to reduce our workload and our replacement parts budget. An additional bonus was that it freed our department technicians from the monotony of repairing infusion pumps.
