by Sean Ruck
, Contributing Editor | November 04, 2014
From the August 2014 issue of HealthCare Business News magazine
But there’s a limit to that philosophy. If hospitals are able to readily afford new equipment, that can also make business tough for independent service organizations. “It will decrease the parts business because people are buying new equipment,” Shannon says. “There is less demand to repair the old equipment because people are getting rid of them,” he says.
For health care overall, the consolidation has hit health care providers too. That has caused pain for patients and seems counterproductive to lowering health care costs, according to Shannon. “This year, I have seen 30 or 40 clinics shut down. They have large modalities and were doing mainly Medicare and Medicaid and they were getting reimbursed just enough to stay open.” He says the closures mean patients get pushed off to other larger imaging centers or hospitals and the costs go up. “The customer is forced to pay more because they could have gotten an MR for $500 or $600 and they’re paying $2,500 at a hospital.”
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According to Dale Hockel, senior vice president of Operations for TriMedx Equipment Services, the woes of the health care sector will continue to be felt for the foreseeable future and will continue to exert pressure on providers to reduce spending and save money. That will continue to drive consolidation and stunt growth by hospitals and health systems.
For companies providing service to the sector, those pressures will increase the need to evolve or fade away. “I believe OEMs will continue to maintain a necessary presence, but you will see a greater shift into providing online tools and support for properly trained and informed in-house biomedical teams,” Hockel wrote in an email.
Hockel shares the opinion of a number of industry veterans when he wrote that comprehensive lifecycle programs developed around hospitals’ capital assets will be one of the key focuses for health care in the future. According to Hockel, independent service programs can be a key part of the solution by helping to train in-house biomeds as well as by helping hospitals to assess lifetime service costs, uptime statistics, utilization, failure history and equipment life expectancy for equipment.
“The bottom-line: the future of the equipment service sector is promising so long as hospitals are able to obtain and maintain accurate equipment inventories, gain access to total cost of ownership data, and enlist strong clinical engineering involvement in the capital acquisition process,” Hockel wrote. “The formula for this success cannot be replaced by the latest wave of asset management software. Nor does one solution fit all.”