In today’s fast-paced and changing healthcare market, hospitals are closely scrutinizing their total cost of ownership for diagnostic imaging equipment. With ongoing pressure on their revenue sources, coverage for equipment maintenance, repair, and value-added services continue to be critical considerations in such budgetary decisions, according to IMV’s newly published 2020 Diagnostic Imaging Equipment Service Outlook Report.

As their use and deployment of imaging equipment continues to grow across their enterprise, hospitals and healthcare systems are seeking to consolidate and standardize their post-warranty service contracts across their imaging locations and modalities to decrease their operating costs, while gaining improved value for the support services they receive.

To achieve this balance, the three top strategies hospitals are seeking to pursue for future post-warranty service contracts include:

  • Increase the use of service contracts with imaging original equipment manufacturers (OEMs) to cover multiple modalities of their own equipment in a single contract.
  • Consolidate/standardize the service contracts for imaging equipment in multiple facilities/locations in their organization
  • Increase the use of service contracts with a single service provider to cover equipment from multiple imaging OEMs in a single contract.

What are some drivers for seeking to consolidate post-warranty service contracts?  Motivations to consolidate individual modality service contracts into single multi-modality contracts include, not only to reduce overall service contract costs, but to negotiate for value-added services beyond “break-and-fix.” Services that are more likely to be included in single contracts that cover multiple modalities include “asset management/life cycle cost management,” “uptime guarantees,” “cybersecurity services,” “remote diagnostics,” “contracted on-site response time for service visits,” and “OEM parts.”

For post-warranty service, hospitals are selective in which modalities they use full-service contracts with OEMs for. Depending on the modality, they might contract with third-party service organizations or use their own in-house biomeds as first call. Hospitals are more likely to use full-service contracts with OEMs for CT, MRI, and x-ray mammography systems, but for general x-ray equipment, they are more likely to use either a third-party service organization or use shared service contracts, where the in-house biomed is first call, with some contracted hours for on-site service by the outside service provider when needed.

Virtually all U.S. hospitals have service contracts with at least one OEM for the post-warranty service of their diagnostic imaging equipment, while over half have service contracts with at least one third-party service organization.

The types of support services hospitals typically have in their current service contracts are the classic “break-and-fix” and preventive maintenance (PM) services, including “PM visits during routine working hours,” “technical support by telephone,” “contracted on-site response time for service visits,” “OEM parts,” and “remote diagnostics.”  These support services address a key department priority to “reduce the mean time to repair imaging equipment,” which two thirds of the respondents indicated is a top priority to address over the next few years.

Going forward, another top priority cited by two-thirds of the respondents is “improve the cybersecurity of your imaging equipment and networked healthcare information technology,” which is currently covered in less than one-fifth of their current service arrangements.

Moreover, when asked to indicate which types of support services will be “more important” to have in future service contracts, imaging departments are likely to seek value-added remote and software-related services in addition to the classic “break-and-fix” services, including “remote diagnostics,”  “cybersecurity services,” “remote repair of software,” “software upgrades for new clinical capabilities,” and “software updates for bug fixes.”

Respondent suggestions echoed the need for value-added remote support services to further improve their mean time to repair and imaging operations:

  • “Use of artificial intelligence to identify concerns before they become a major problem.”
  • “Continued remote access to assess the issue so parts can be ordered, if needed, rather than wasting the drive time of a biomed tech to come diagnose onsite.”
  • “Cybersecurity is the hot topic now. We are fully digital and integrated with PACS.”

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Lorna Young is senior director, imaging insights, at IMV Medical Information Division, part of Science and Medicine Group.

IMV’s 2020 Diagnostic Imaging Equipment Service Outlook Report provides insight into the types of post-warranty service arrangements used by U.S. hospitals for eleven key imaging modalities: CT, MRI, PET/CT, nuclear medicine/SPECT cameras, fixed C-arms, portable C-arms, fixed and mobile general X-ray, radiographic fluoroscopy (RF), mammography, and ultrasound. IMV’s report quantifies the market shares of the imaging equipment manufacturers (OEMs) vs. third-party service providers, describes the use of different types of service contract arrangements by modality, the types of support services preferred, and identifies trends in priorities for future service contracts and preferred contract types. The report is based on responses from more than 230 radiology/imaging administrators and biomedical engineering managers in U.S. hospitals who participated in IMV’s nationwide survey in February-March 2020.

Service providers covered in this report include both equipment manufacturers and third-party service organizations, including Agfa, BC Technical/Alpha Source, Canon/Toshiba, Carestream, Fujifilm, GE, Hitachi, Hologic, Konica Minolta, Philips, Samsung, Shimadzu, Siemens, Sodexo, TriMedx, and United Imaging.

For information about purchasing IMV’s report, visit the corporate website at http://www.imvinfo.com or call 703-778-3080 ext. 1033 to speak with a representative.