This report originally appeared in the August 2010 issue of DOTmed Business News

Few requirements are more crucial to a medical facility's everyday operations than proper equipment sterilization. Without it, operating and exam rooms would be hard-pressed to carry out their key roles, research and experiments might be compromised and when something does go wrong, patient health would be jeopardized.

In late June, the Royal Inland Hospital in British Columbia was forced to postpone 19 operations after all three of its aging steam sterilizers broke down. With the autoclaves out of service, the hospital was forced to send medical instruments to a private surgical clinic to be cleaned. This increased the possibility of instruments not being where they had to be when they were needed.
With the recession forcing an increasing number of hospitals to defer the replacement of their equipment, it's becoming more of a likelihood hospitals in the United States will face similar problems.

"In the past, hospitals would get to a certain point in time with a piece of equipment, in this case, a sterilizer, and they would consider its useful service life done. They're not leaning in that direction anymore," says Greg Wallace, owner of H&S Medical. "They're looking to get some more life out of it because of the expense of purchasing a new one. So we've been rebuilding a lot of them for them and we've also taken over a lot of contracts in the state of Florida."

Wallace says that hospitals are also looking to cut costs by making adjustments to the way they have their equipment serviced and by whom. In areas like Florida, many are diverging from the standard approach of staying with OEMs.

"The OEMs are probably the most expensive option there is, as far as maintenance is concerned," Wallace says.

In response to these leaner times, OEMs are striving to be an economical choice. Ben Weiss, founder of Meditech Surgical, reports that he's seeing OEMs try to reduce their labor rates to become more competitive with smaller businesses, like his own.

"They charge close to $200 as opposed to me, in the low hundreds and they have cut their prices so they don't lose their customers," says Weiss.

Wallace has also seen OEMs try to drum-up business with so-called "loss leaders."

"You would offer to rebuild a piece of equipment for X amount of dollars and they would throw out a [ridiculously low] price," he explains.

Even OEMs that don't deal in the hospital sector have to come up with creative strategies to retain and expand business.

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