Medical imaging as a component of healthcare delivery is caught in the midst of a tug of war. On one end of the rope, high quality medical images have become a necessary component for pinpoint accuracy in diagnosis and treatment of patients with complex diseases. On the other end, fiscal realities obligate careful management of all resources: equipment and personnel. Technologically sophisticated machinery, while amazing in its capabilities, is scrutinized for cost considerations. Given the realities of the shifting sands of healthcare, servicing imaging equipment and consulting for total asset management have become vital activities in radiology departments across the country.
Servicing existing equipment
At Philips Medical Systems North America (Shelton, Conn.) maintenance of imaging equipment is far more than just a break-fix situation. “[Due to the complexity of issues], we have developed a survey tool for asset management,” explains John Bills, director of customer support.
This survey tool requires entering data about current equipment into a computerized asset list that includes information such as the date and price of purchase, age and market value, its repair history and utilization studies to assess the actual overall equipment usage in a given department. This assessment also reviews the technologic value of any given piece of the equipment, determining whether it is state of the art, cutting edge technology, or near the end of its useful life.
Some institutions may not be able to track information such as repair histories, software licensing agreements, utilization documentation, or even precisely which pieces of equipment they own, because they do not use accurate naming conventions. The Philips Medical System’s maintenance management program includes the development of standardized reporting methods. An organized approach provides ready access to essential information.
“Many hospitals have not developed systematic methods of equipment maintenance and repair records. Sometimes a machine may not be worth repairing,” Bills notes.
Typically, service contracts are usually negotiated when equipment is purchased. There is usually a period of warranty coverage, followed by a package of maintenance and repair agreements. After that, service can be handled in a combination of three ways: by an original equipment manufacturer, by a vendor other than the original manufacturer, in-house biomedical engineering support or an independent service organization.
“Physicians have always wanted the best coverage possible, usually from the OEM on a 24-hour basis,” says William Urban, project engineer at ECRI (Plymouth Meeting, Pa.). “But in the last 10 years, as budgets have tightened, physicians have had to realize that is not always possible.”
Many hospitals are moving towards developing their in-house biomedical technology departments to reduce their reliance on outside servicing companies. “We help the hospital to do whatever they want,” says Thomas Skorup, associate director of the Health Systems Group at ECRI. “If there is a strong radiology group, the administration will do whatever they want.”
However, the staff evaluate technology assets to assist the hospital administration in devising strategic business plans that may include maintaining their OEM service contract for one or two years while they can establish their in-house capabilities. “The radiologists must be involved in making these decisions,” Skorup concludes.
“We’re seeing a hybrid approach [today],” explains Skorup. “The in-house biomedical staff do the basic maintenance on rad/fluoro equipment and first call on more complex equipment. Then they contract with the OEM if the problem is more than they can fix.” This arrangement benefits both the hospital and the OEM. The hospital because it is usually less expensive to pay their own staff personnel than someone from the OEM to come to their facility, and the OEM because they are not required to use their experts to perform simple and routine repair tasks.
Another trend Skorup describes involves the increasing number of individual equipment vendors who are developing multivendor service expertise to meet market demands.
At Marconi Medical Systems (Highland Heights, Ohio), Wendel Barr, vice president and manager of global services explains, “We have taken a broader approach, with total asset management. [Our technicians] work on all imaging equipment.”
Marconi, like other large equipment manufacturers, tailor their service solutions to each customer’s needs. “We don’t see ourselves as a maintenance organization, but rather as a solutions company,” Barr adds.
Credibility issues may arise as to how well prepared in-house biomedical technicians are to manage equipment repairs, especially on high end imaging equipment. “When hospitals change out equipment, they may miss one or two generations of technology,” explains Philips’ Bills. “Then their workforce is outmoded.”
Training, by either the OEM or an independent educational program becomes a key factor in preparing technicians as first response personnel to diagnose equipment malfunctions.
Ten years ago, Marconi (formerly Picker International Inc.) developed the Picker Cooperative Support Plan to address educational issues for in-house biomedical personnel. Bob Trebar, Marconi’s vice president of service marketing and business development, says “[In-house personnel] train alongside our own personnel. They have access to the same tools, and diagnostic software through licensing arrangements with the institution. This gives our customers the option of maintaining their own equipment.”
Trebar describes risk sharing between hospitals and vendors as an emerging trend, too. “As equipment has become more reliable, and institutions have become larger, there is an increase in the sharing of risk for service [needs] with the provider.”
One changing dynamic in healthcare is the development of hospital mergers into Integrated Healthcare Networks (IHN). The Picker Co-op Support Plan is designed to provide cost-effective benefits to IHNs. Within any given institution, biomedical personnel may not service enough high-end imaging equipment to become truly proficient. But with well-trained biomedical personnel operating across the five to 10 institutions in an IHN, they can economically provide at least first line service for their member hospitals.
On a larger scale, staff from hospital group purchasing organization Premier, Inc. (Charlotte, N.C.) provide imaging equipment service to more than 200 health institutions in their alliance. “We set policy about how to maintain high-end equipment,” says David Natale, director of technical assessment at Premier. “We send people to training programs [provided by OEMs], or where it is more cost effective, we may bring instructors to Charlotte rather than send our staff to their facility.”
Another advantage to the volume of service Premier personnel provide, is their clout in negotiating better discounts on parts for repairs.
Another service approach gaining popularity is remote diagnostics via telephone, which monitors performance of high-end imaging equipment 24 hours a day, seven days a week. “The technology is evolving,” explains Marconi’s Trebar. “Because this equipment is computer driven, the system can be configured to download certain information [such as error logs generated by the equipment] to a technology resource hub staffed by clinical applications specialists.”
This information can be used to alert in-house personnel to problems that may arise. Not only can equipment failures be diagnosed in these systems, but Natale describes that often a problem can be repaired over the phone line as well. “If this system is unable to correct the problem, it alerts service personnel about which tools or equipment to bring to complete needed repairs,” Natale concludes.
Consulting services
Another side of strategic and effective technology management draws in consulting. Six years ago, Philips developed consultative services to address the changing needs of healthcare institutions “We evaluate … based on patients served and detailed demographic [information] to determine what equipment is needed,” explains Adele Motter, principal in Philips Healthcare Consulting (Shelton, Conn.).
For example, if an institution provides care to primarily elderly patients, they would need a different equipment mix than a hospital near a ski resort. Imaging techniques must be tailored to specific patient populations.
In the current climate of hospital mergers, assessment of co-markets becomes increasingly important. Redundancies of equipment and staff often occur when hospitals combine into single networks. Organizations need to consider whether to replace old equipment, or to move some equipment from one institution to another, and then purchase new units to increase efficient and effective use of staff and equipment.
“We try to stay vendor neutral,” Motter says. “We stop advising before they make an equipment decision or go to the request for proposal [RFP].” The consultants help their customers complete comprehensive assessments to enhance strategic business planning. Should they increase the MR hours of operation? Would it make sense to purchase a mobile unit? Should they partner with another hospital or clinic to provide a particular service such as mammography?
“We not only look at radiology, but also cardiology or nuclear medicine,” Motter continues. “In the past, capital budgets were kept separate, but now they are pooled. A department must justify a purchase to administration.” For example, a radiology department must demonstrate their need for a new MR rather than for the surgical department to acquire a new surgical suite. These decisions are made within the context of negotiated managed-care contracts that define patient populations. In a capitated system, a healthcare facility may need to do an increased number of screening studies over a broad spectrum of patients rather than diagnostic studies that confirm specific conditions.
Metalogics Inc. (Hoboken, N.J.) is a healthcare technology and management consulting firm formerly known as Meta4, Inc. “The equipment is sophisticated,” says Nigel Jamieson, vice president of biomedical engineering services at Metalogics. “It’s networked and provides integrated information [financial, diagnostic and patient-based].”
Jamieson further explains that hospitals have islands of information: financial, diagnostic, and patient based. With their consulting services, Metalogics works to provide comprehensive information to optimize equipment use. By extracting data about what the requirements are for imaging studies, their staff can help develop plans for redeployment of equipment where necessary.
“We help our customers build business models, by creating information for the CFO/CEO to make decisions,” relates Ken Alexander, vice president of business development in the Metalogics’ biomedical group. “We computerize equipment lists to reduce redundancies.”
Their analysis also reviews records of maintenance and repair cycles for equipment and provides data used in the certification process and JCAHO accreditation for healthcare institutions. “We tie our information together to quality initiatives,” Jamieson says.
Regarding servicing existing equipment, Jamieson notes that sometimes outsourcing operations makes the most sense and is the most cost-effective. “We try to offer an overall picture [of operations], to help the institution decrease the cost of operating equipment,” Jamieson concludes.
As with most of the other consulting and service companies, staff from Metalogics have spent a great amount of time and energy assisting customers meet Y2K compliance concerns.
Meanwhile, back at the ranch…
Hahn Consulting (Portland, Ore.) is a consulting firm that serves manufacturers of computers, software, networking, and medical equipment. With a focus on strategies for marketing and selling services and support function, the company performs pricing audits, and strategic planning.
“Our company provides three services,” explains President Al Hahn. “About half our business involves researching needs analysis, lost-business studies and competitive analysis of services they offer. Twenty-five percent of our work is consulting to help design service programs, and the rest is training about how to sell services, and how to develop service contracts.”
“We don’t help to decide how to invent better products,” Hahn notes. “We help them do a better job of providing service.”
Service contracts provide a good method of cost control in budgeting, Hahn continues, “We audited 100 service contracts. There was a minimum of a 25 percent savings, as compared with the same services purchased at time-and-materials (T&M) rates.”
The temptation for a radiology department to postpone or avoid service calls when faced with small, non-critical problems is another factor that may impact the bottom line with T&M customers, Hahn says. In these instances, equipment performance may be less than optimal, and eventually a major breakdown may occur. This may cause productivity problems.
“My conclusion is that contracts, in fact, provide excellent value to customers,” Hahn concludes.
Conclusion
When it comes to healthcare decision-making these days, fiscal realities demand increased efficiency coupled with ever-improved quality of diagnostic images. Service contracts for imaging equipment are usually negotiated at the point of acquisition. Within any given healthcare institution, budgetary competition between departments raises serious issues about where capital expenditures will benefit the institution and its patients the most. Reimbursement mechanisms require prudent management of all resources, especially when decisions involve high-end imaging equipment. Strategic business planning is essential both at the point of acquisition and ultimate long term maintenance of these extremely valuable equipment assets. 
