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Balancing Cost and Quality: Managing Service Program Risk

As health systems feel cost-cutting pressures from every angle, clinical asset maintenance has become a top opportunity for sustainable financial relief. A key piece of this involves a macro-level consideration of the equipment service model, as well as a thorough exploration of how to optimize it.

Depending on the execution, service model optimization can be a strategic advantage or a missed opportunity. Poor execution leads to unplanned downtime, suboptimal asset performance, unexpected expenses, broken workflows, as well as staff and patient frustration. On the other hand, a well-crafted service model can yield significant and sustainable cost savings, improved processes, and overall satisfaction.

How can you objectively weigh the benefits and risks of changing your service model? It requires a careful approach to evaluating in-house resources and outsourced options such as OEMs (original equipment manufacturers), third-party service organizations, and insurance programs. To be successful, your approach must balance reducing costs with maintaining quality to identify the right strategy based on present and future needs.

As you approach those decisions, ask these questions:

  1. Are you making the most of your human capital? The right technical labor strategy makes all the difference in achieving lasting results. What’s the right balance between in-house and outsourced talent? It goes beyond the hire.  Other considerations factor in too, such as investments in ongoing training, tools and technology, and geographic distribution of workers.
  2. Will assets be available when patients need them? Just a five percent loss in uptime for one CT could result in lost revenue.  To amplify the point, add the potential impact downstream—from workflow disruptions to bedside interruptions, canceled procedures, or delayed care. Remote diagnostics and repair, visibility to usage analytics, and location-based tech also factor in when considering how a new model will support operational efficiency.
  3. Can your model flex to meet evolving needs? A model that taps out savings at the one-year mark, and then steadily raises prices afterward, will likely cost more in the long-run. Ensure that cost savings and benefits are sustained by considering options that feature long-term price protection, contract coverage flexibility, and midstream adaptability based on usage data. 
  4. Are there administrative surprises hidden in your program? Unexpected expenses such as administration costs can zero out the anticipated savings of your new service model and cause frustration for everyone. To account for them, thoroughly assess the deeper administrative elements that go beyond the window sticker alone. 
  5. What’s your plan for program compliance? The risks of regulatory noncompliance are steep—from patient inconvenience and potential injury to liability issues, financial penalties, and license revocation. Strategic service models dually account for the regulatory needs of today while monitoring and adapting to the changing requirements of tomorrow.
  6. Will this model achieve sustainable savings? Short-term cuts may feel great, but if they’re not lasting, that feeling will inevitably fade as costs catch up over time. A comprehensive, analytics-driven asset management model not only ensures savings are sustainable, but it also serves up actionable data that informs long-term decisions and strategy to move the business forward.

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There are many different approaches to medical device maintenance, and there is no single solution that works for all healthcare providers. These six critical areas should be considered as you balance the pros and cons of your service model change to help ensure you achieve the results you desire.