If you want your hospital to reduce its dependence on maintenance agreements, a simple first step is to use a maintenance insurance program. When managed properly, these programs can save hospitals hundreds of thousands of dollars.
The crucial component for biomedical personnel is to make sure that you control the program and not let the program control you. If you take the lead in developing this program, your senior management will view you as a serious player who is interested in reducing costs without compromising quality.
Some of the benefits of these programs are:
Cost Savings – Insurance changes your method of funding maintenance agreements by spreading the financial risk associated with equipment failure across product lines and across departments. You can save an average of 26% per device as measured against maintenance contract costs.
Guaranteed Cost – You get an insured upper limit, or ceiling, on the annual maintenance costs for a device or group of devices.
Performance Measurement – Well managed maintenance programs compare your equipment downtime, repair frequency and repair costs against a national data base enabling you to monitor the quality of your repair services and equipment performance.
Gradual Elimination of Service Agreements – Department heads gradually learn that vendor response time and service quality levels remain high despite not having expensive maintenance agreements.
Some key elements to monitor if you use these programs:
Some insurance companies may try to reduce costs by controlling the entire service process – They will want to select service vendors and issue purchase orders for repairs. Although there are many high quality 3rd party service vendors, you and your hospital’s department heads must retain control over who services your equipment. If you do not do this, you may lose control over quality. Remember that you are ultimately liable for problems that may arise due to improper maintenance. You and the hospital’s department heads need to select vendors and control who services your equipment.
Always remember that department heads fear changes that may interfere with service quality or response times. Many of them have heard horror stories about insurance company failures. They do not want to risk having third party service personnel working on their equipment. You need to assure them that they will be involved in all choice of vendors.
Companies may try to keep all records of costs – Be sure to specify in your agreement that the insurance company will provide complete records for each piece of equipment in the program. The record must include itemized time, labor, and materials costs for each piece of equipment in the program. Put a financial penalty in the contract if they do not comply.
Keys to developing insurance programs:
Market the program internally – Emphasize that this is not a biomedical engineering program, but an alternative method of funding and managing maintenance. Emphasize that the department heads are still responsible for selecting service vendors and the only change is how the pay for service and how much savings departments will realize.
Start small – work out the bugs in the toughest departments like radiology, lab, and the OR. Then go house wide. By picking the toughest depts., it is more difficult for departments to claim; “it won’t work for us”
Meet with service vendors – Tell them that you need their cooperation and are not planning a move toward third party or in-house servicing.
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