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Balancing Risks vs. Savings Healthcare Technology
By Katie Regan
In a webinar for members last week Loretta Loncoske, Rachael Bennett and Jon Brubaker gave an
informative talk. They discussed how to apply evidence-based methods and best practices when
negotiating service contracts for the high impact imaging modalities of CT, MRI, Ultrasound/Echo and
At the end of our webinar, we opened up the session for questions. Below are answers to a sampling of
the questions asked. We hope this additional information is helpful to you and your hospital.
If you are a member and would like access to the webinar, please send an email
Does MD Buyline have any experience with the financial firms that underwrite coverage for multiple
assets and coordinate the service?
We are aware of these institutions and can provide contact information for insurance agencies, but we
do not formally track financial firms. However, this is very similar to comprehensive agreements.
Customers that go through insurance companies have said that they like the insurance company
business model, but their chief complaint is experiencing longer downtime as they wait for the
insurance company to approve the service maintenance order.
Shouldn’t property insurance coverage be evaluated as a strategy to reduce probe coverage for
This is very similar to comprehensive agreements. Customers that go through insurance companies have
said that they like the insurance company business model, but their chief complaint is experiencing
longer downtime as they wait for the insurance company to approve the service maintenance order.
Unlike tubes, FP detectors rarely fail but are damaged and property insurance could be used to cover
the loss instead of buying insurance from a vendor.
Very true, but the downfall is the amount of time it takes for the insurance company to approve the
repairs or replacement.
I’m new to the medical arena, so would you please define your abbreviations/initializations, e.g., PM
Biomedical Engineer (BME)
Principle Coverage Period (PCP)
Preventative Maintenance (PM)
Original Equipment Manufacturer (OEM)
You have shown service costs for each modality and have not mentioned third-party service. Does
your service cost reflect only OEM service, or does it include third-party service?
Our database includes both OEM and third-party service contracts. However, the majority of service
contracts are from OEM’s.
What value has MD Buyline seen in third-party contracts versus the manufacturer agreements?
This varies by modality and third party. Generally, third-party contracts are lower in cost, but service
quality and access to replacement parts can be an issue.
Have you seen vendors giving additional discounts for imaging equipment with UPS?
No. Typically this is an additional charge. We have seen UPS pricing anywhere from $5,800 to $10,000.
What percent use non-OEM support option, such as multi-vendor support? Typically, your analysis is
based on acquisition cost; how do you account for historical service contract utilization?
Typically, 5%-7% use non-OEM support such as multi-vendor support options. At MD Buyline, we have
been analyzing service contracts for over 30 years for new, refurbished and obsolete equipment, which
allows us to account for historical service contract utilization.
On service contracts for major movable medical equipment, do you see them financed by medical
facilities ever? If not, why? If so, please explain.
Vendors offer a variety of payment and service contract options. We see service contracts paid monthly,
quarterly, semi-annually and annually. For rental and lease equipment, service contracts can be financed
with the lease payments.
See more at: http://www.mdbuyline.com
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