DOTmed Business News queried major service providers to share their advice when it comes to choosing a service contract. Initially, the intention was to offer the answers in a larger article. But after receiving the responses, it became apparent that although some responses echoed others, by offering them each under a company identity, they not only provide advice, but a nice introduction to the participating companies. Whether you’re intending to enter into a contract with an OEM or an ISO, be sure to know what you need, know what you’re getting and what it’s going to cost you – we believe the following advice will put you on that path.



Ken Smith, vice president, sales & service, BC Technical

Ken Smith, vice president,
sales and service, BC Technical


• When considering contracts, the service provider should have a quality program in place that is measurable with processes that create reproducible results. The quality programs should be IAW ISO standards applicable to Diagnostic Imaging (such as ISO 13485).



• When choosing a service provider, customers should determine if the organization has trained primary and backup field engineers; a quality factory level technical support group; a quality clinical applications team to support technologists when patients are on the machine and program issues occur; and service support after-hours, weekends and holidays.



• Customers should consider their service provider’s infrastructure. This includes organizational structure, financial backing, and the executive leadership team.



• Pay attention to the details of the contract. In an effort to reduce cost so they can offer lower priced service contracts, many service providers are removing and/or weakening key service contract terms and conditions like response time, uptime and parts shipping commitments.



• Is there a defined escalation procedure? This is especially important for independent service organizations. A properly defined and documented escalation procedure can help reduce downtime. This, combined with meaningful uptime and response time penalty clauses, will go a long way to ensuring the appropriate sense of urgency is maintained when problems that are unusual or difficult to diagnose and/or repair occur.

Nick Hersman, strategic marketing product manager, MEDRAD Service

• When comparing quotations from multiple vendors for service level agreements (SLAs) on the same piece(s) of equipment, be sure to understand each vendor’s offering. Not all full service contracts, for example, are the same. Each vendor may provide a different level of service under the ‘full service’ name. Read through the terms and conditions of the agreement and make sure any negotiated terms outside of the standard terms and conditions are properly documented.



• Be sure to align your uptime requirements/downtime tolerability to the service provider’s SLA that best fits your needs. If there is a possibility to contract for an up-time guarantee, for example, that aligns to that piece of equipment’s requirement for being ready for use then that should be considered when selecting an SLA.





• You may have several pieces of equipment from the same OEM at your facility. However, one level of SLA may not fit every piece of equipment. Be sure to explore the ability to customize your SLA for the specific needs of each piece of inventory. This will most likely be dictated by the frequency of use of a particular unit and/or whether there are back-ups available.



• Many facilities have in-house capabilities provided by a biomedical/clinical engineering staff. If you are a department outside of these groups and are responsible for making the decision on which SLA to purchase, then consult with your in-house team and determine what support, if any, they can also provide. If your biomedical/clinical engineering team can provide first-look support this may enable you to negotiate a contract of lesser cost, just by leveraging an already existing in-house resource.



• In today’s health care environment, there are many governing bodies that are regulating certain actions be taken on devices within a facility. Be sure to discuss any new regulations that pertain to service with cross-functional groups, such as biomedical/clinical engineering, risk management, legal, etc. Also, do not hesitate to challenge your service providers on how they are ensuring you are meeting any new regulations that may have been put into place.

Jeff Fall, president, Oxford Instruments Service

• The most important thing to consider is your vendor of choice. Some questions you should consider: Can the vendor provide you with the savings you need in the current reimbursement environment to allow you to profitably operate? Do they have quality engineers? What kind of response time do they offer? Do they have the parts required to service your equipment and how long will it take to get parts to your site? Do they have a proven track record of satisfied customers and will they share a comprehensive reference list? Are they ISO certified?



• The major advantage to working with a non-OEM is cost savings. Quality third party vendors understand that to earn business they must provide a high level of service at a lower cost when compared to the OEM.



• Facilities should be wary of parties offering very long term contracts (more than five years). In the non-OEM arena, if you research your vendor to ensure that they have a track record of performance, you will likely save between 20-40% vs. the OEM, and be very satisfied with your service.

Larry Hertzler, vice president, operations support and Francis Vonder Haar, vice president of diagnostic Imaging ARAMARK Healthcare Technologies

• Always get a proposal from a non-OEM provider.



• Investigate a provider’s true ability to deliver what they sell; you can do this by requesting a reference list and through online research of press articles, case studies, and testimonials.



• Be sure the service contract offerings are apples-to apples. So many times there is a reason for a “low ball” price that surprises the customer later.



• Consider what coverage is really needed. Classic vanilla coverage is fine, but there are other flavors out there.



• Watch the fine print as it can significantly impact the total cost in the end.



• Make sure you consider how future changes might impact your decision, e.g. will the contract lock you into something you may need now, but not later, that you will pay for the entire time.

Michael Guin, senior vice president, service, Siemens Healthcare

• When your facility is considering a contract for imaging service support, weigh the revenue side of the equation, and not just the cost of the support. What happens to your revenue when your imaging equipment is down for hours – or even days? Eventually, any advanced technology will require service. And if you’re signing up for a service plan that doesn’t guarantee uptime, response time or timely parts delivery, you risk losing thousands of dollars. For example, by using CMS reimbursement averages, we estimate that taking a single CT system offline for three days could cost a facility $90,000 in lost revenue alone.



• Consider the systems expertise of a service provider, keeping in mind the considerable edge an OEM service provider has in this area. Ask how much experience the provider’s service engineers have on average – and many hours of training they receive per year. If it’s substantially less than 100 hours, consider looking elsewhere. Also, what sort of advanced certification do these engineers receive – if any?



• Consider the benefits of securing new manufacturer guaranteed parts from an OEM service provider that undergo stringent testing and processing, rather than universal parts or parts that have undergone reverse engineering, as many third-party providers offer.



• Determine the level of technical and applications support a service provider will offer. You should have direct, around-the-clock access to highly trained engineers that enable you and your team to confidently operate your imaging equipment and software. Find out on average how quickly your phone calls for service will be answered. Since every second counts, Siemens Healthcare strives to have you on the phone with an expert in less than 30 seconds. Consider this a benchmark against which to measure. In addition, what kind of guarantee will you receive regarding on-site response times? “As soon as possible” is not an acceptable answer.



• Find out how progressive a service provider is in terms of minimizing downtime. Are you provided with an uptime guarantee? Can the provider make a substantial number of its equipment repairs using remote repair technology, so that a facility isn’t waiting on a service call? Additionally, can the service provider use remote access technology to proactively monitor your equipment 24/7 and prevent many problems before they even occur?

Arthur Larson, general manager of GE Diagnostic Imaging Service

• Research the service provider. Many people wonder how to best evaluate a service contract’s value and reliability. To ensure equipment is properly maintained and planned maintenance records are readily available, look at the provider’s expertise in corrective maintenance. Gauge whether the provider will listen to your needs and accommodate. There may be upgrades, clinical programs and trade-in promotions available only from the OEM. Those value-adds may be significant.



• Look at internal benchmarks. When selecting coverage, look to your equipment usage and criticality to tell you what you should consider. Response time is just one measure – should your provider provide onsite support, proactive remote monitoring and diagnoses, local parts? Knowing how critical equipment is to your operation and understanding your usage profile are key to choosing the right coverage.



• Only pay for what you need. How much to pay is always an important issue with service contracts. Cost depends on the needs of your equipment, your usage profile and volume of patients, and the flexibility of your provider. We recommend asking for a list of options that would fit your range of needs.



• Look beyond the service to what other support a provider offers. Different types of equipment require different kinds of service contracts. For example, MRI image quality and performance are impacted by environmental factors. When looking for an MRI contract, ask yourself if your provider supports you with real-time monitoring of those parameters, including preventive notices to help maintain the right environment. A provider must be able to help manage conditions in and around the MR suite such as temperature, humidity, electricity, cryogen levels, and more.



• Pick a provider with flexibility. We find that many organizations we work with are holding onto their imaging assets a little longer than in the past, which can cause service to become more complex. Limited availability of service parts/software and engineer skills, among other factors, can combine to create challenges. Additionally, imaging center leaders now look for flexible plans, including plans tied to the volume of patients being seen each month. Ensure that your service provider can cater to special considerations and ask about how they can support you in those needs.

Justine Kennelly, director of marketing, imaging systems customer services, Philips Healthcare North America

• Full or comprehensive service agreements cover labor for on-site and remote technical response, parts delivery and replacement coverage, and planned maintenance. This type of agreement might be appropriate for your facility if speed of service is crucial in an effort to reduce downtime and costly diversions.



• In-house support service agreements support organizations with in-house engineering teams by providing access to original equipment manufacturer (OEM)- trained technical expertise and parts replacements at preferred pricing. Service labor arrives on-site or remotely only when the in-house team requires backup support. This type agreement might be right for your facility if you have an in-house team that requires occasional back-up from technical experts or is in the process of developing a stronger capability.



• Time and materials agreements provide labor services and parts upon request. Services are typically charged on an hourly basis and include travel, on-site support and remote services. This type of agreement might be right for your facility if short-term cost is a top concern, some equipment downtime is manageable and your organization can handle additional risk in case you have a costly failure.



• Review all available service contract options offered by the vendors you are considering, comparing level of service and pricing for each before making a final purchase decision. The least expensive contract may not always be the best solution financially. Your savings today may end up costing you 10 times the savings if the service provider is unable to deliver on the services you expected and agreed upon.



• Ask your service provider if you can change your service agreement levels as your business needs change.



• Work on negotiating true relationships with your service provider, built on mutual respect and development support, to deliver the best system performance.



• Purchasing an extended service contract at the time of your system purchase instead of after your warranty expires may help you negotiate savings.