The largest private hospital in the nation's capital says it uses a recently introduced "a la carte" service contract to manage risks for its big-ticket medical imaging equipment.
In May 2011, MedStar Washington Hospital Center, a 926-bed teaching hospital in Washington, D.C., discovered its old service agreements for its Philips Healthcare imaging modalities were coming to an end. But instead of renewing the contracts for another three or five year term, as was the usual policy, Dheepak Raja, director of biomedical engineering, said he negotiated a temporary, two-month extension.
The reason? He had heard about a new "custom" service offering Philips was launching over the summer, and he wanted to hold out until he could sign up for it.
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Called RightFit, the plan was the fruit of a $2.5 million investment by Philips to revamp its service offerings to tailor them to different hospital needs. For instance, using an online tool, hospitals can see if they should purchase "RightFit Service Agreement Uptime," a high-level offering that guarantees 99 percent uptime, or the less hand-holdy "RightFit Service Agreement Support," which offers last-resort maintenance and pays for pricey, critical replacement parts, such as MRI cryogens and PET crystals.
Raja said his team signed up for the program, shortly after its July 5, 2011 launch. Nearly one year later, he said their shared-service contract has saved his hospital thousands of dollars a month, as it allows a greater chunk of service to be performed in-house.
"We're significantly under budget. It certainly was cost saving to us," he told DOTmed News by phone last week.
(According to Andover, Mass.-based Philips, all U.S. and Canadian imaging customers are now only being offered RightFit for full-service contracts.)
Fast and cheap
Raja said the five-year shared service contract is mostly about managing risk, which is why relatively less costly Phililps ultrasound and portable X-ray systems are not on contract. Instead, the contracts his hospital signed with Philips cover only CT, MRI and fluoroscopy equipment. Two of the hospital's four MRI rooms are Philips, as are four of its six CT scanners, he said.
As it's a shared-service contract, most of the basic maintenance is done in-house by his 15-person team, Raja said.
Keeping service in-house has a twofold benefit: it's cheaper and faster. Employing technicians costs less than bringing in outside engineers for minor repairs. Plus, they get to the equipment sooner. It takes about five minutes for a hospital technician to answer a service call, for instance, while the department has to wait about an hour for a Philips engineer, Raja said.
But the contract's needed to protect the hospital in the event of a catastrophic failure or damage to the million-dollar equipment's expensive components, some of which cost nearly as much as a big city studio apartment. CT glassware, for instance, which Raja's hospital has covered under contract, could cost upwards of $150,000 to replace.
"It's like insurance," he said. "Even if something goes south, we have that protection."
For their new contracts under RightFit, Raja said the CT coverage largely mirrors what they had before. MRI underwent the biggest change, he said, as they removed chillers from the service contract, and are now managing them in-house. Raja calculates the hospital saves about $20,000 to $25,000 a year by going off-contract for chillers.
"Overall, I’m very happy with where our budget is," he said.