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The future of medical device parts and service

August 02, 2017
HTM Parts And Service
Chris Nowak
From the August 2017 issue of HealthCare Business News magazine

By Chris Nowak

As the U.S. continues to evolve its health care delivery payment structure to a value-based product, some parts and service providers find themselves struggling to maintain margin while others see new opportunities to “knock off” the “dinosaurs” of the prospective payment system.

The changing environment affects all service and parts providers, OEMs, third-party providers, parts brokers, service brokers and in-house programs. Health care provider labor costs are the largest expense for most facilities, followed by supply costs, which include service and parts. Health care providers are sharply focusing on the supply chain side of supply costs such as commodity items, but this low-hanging fruit has been “wrung out” time and again. The health care provider focus now includes parts and service for technology. The lack of understanding of this parts and service environment by facility administrators leads to tremendous variability in quality and cost of parts and service.

This variability is where the facility service provider plays a significant role in the success of the employer. Whether you are an OEM, third-party or in-house health care technology management program, your focus must be on results – high quality and low cost. I cringe when I hear peers boast about how cheap they get service or parts and they do not have a process in place to understand or vet service and parts suppliers. Did you go on a site visit to their facility? Do they have quality processes in place and did you evaluate those processes to validate service strategies or parts quality? What are the competency strategies for their employees? Did you evaluate the training and education programs for their employees who work on the gear at your facilities? What kind of test equipment do they invest in and what is the strategy they employ for metrology services for that gear?

All of these questions and processes for parts and service providers should be used by health care technology management providers in an effort to translate to one very important result – the highest quality health care experience for the patient. If a service or parts provider focuses their efforts, energy and resources on the experience of the patient and the employer, then the result for the provider is strong margins and growth. It is a win-win for all parties involved.

Unfortunately, many of the larger OEMs and a few third-party service and parts providers are not focusing on patients and patient outcomes. The investments necessary to sustain quality and growth are falling prey to margins. What are those investments? People, in general, are investments. Without the investment into your people, the business will invariably suffer. There is a significant issue that I recognize in the industry where inexperienced technical staff are hired by employers and are sent into situations with little or no education on the product technology. Whether they are rebuilding, repairing and/or going on site to a customer facility, the competency of your health care technology management professional matters.

The future of parts and service in the health care technology management field is bright. The difference between success and failure for suppliers of parts and service will be the investments made in processes, technologies, and most importantly, personnel that ensure high-quality, low-cost solutions for your clients that add value to the patient experience.

About the author: Chris Nowak, CBET, CHP, CSCS, is the corporate director of Healthcare Technology Management at the UHS of Delaware, Inc., a subsidiary of Universal Health Services.

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