From the January 2011 issue of HealthCare Business News magazine

“Hitachi does not use any contract labor for service,” said Rick Miller, sales manager for the company in an e-mailed response. “Each time [customers] place a service call, they will be visited by a manufacturer trained and certified e service engineer employed by Hitachi.”

The responses from Philips Healthcare and Siemens Healthcare differed just slightly. Siemens provides service largely under the company banner, but did note some secondary components could be serviced by other vendors depending on the contract offerings. “We also have a multi-vendor service offering that manages the overall service needs of a hospital and that group regularly engages service technicians from various companies,” said Rose Wynne Brooks, marketing director for customer service, Siemens Healthcare in a written response.

Justine Kennelly, director of imaging systems customer services for Philips shared similar information in an e-mail. “We have more than 2500 field service engineers in North America along with a U.S.-based customer care solutions center,” she said. She also highlighted the technological capabilities that allow for remote access to many of their systems via a secure link, allowing a diagnosis or system monitor from afar. Like Siemens, Kennelly said Philips will occasionally “leverage [its] buying power to private label the service provided,” if there’s a manufacturer better-suited to provide a fix.
Benefits of OEM service
Each manufacturer responding to the query indicating it offers multiple levels of service agreements and typical service contract lengths extend from a couple of years to about five. Beyond the assurance customers receive by enlisting the services of technicians intimately familiar with the brand, buyers also benefit from a bundling discount received when an equipment purchase and related service contract agreement are combined.

With all the benefits OEMs offer and their ready-access to factory produced parts for their machines, it’s a wonder there’s room for any other business model. Yet, independent service organizations have taken a piece of the pie and for some, it’s a thriving business model.

ISOs carve their niche
ISOs have the advantage of low overhead, a marked lack of corporate red-tape to cut through and in many cases, the ability to provide service at a regional level, meaning they can quickly respond to a service call. These advantages hint at the reason they can compete in a market with the OEMs — cost. ISOs are able to compete because many, at least on paper, have prices that beat OEMs and that can save hospitals big money when one considers the cost of a service contract. For example, a CT service contract averages about 30 to 45 percent of the total cost of ownership for the equipment over a three year period, according to Charles Gauthier, general manager for Imaging Services.

January 2011 Magazine

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