par John R. Fischer
, Senior Reporter | August 17, 2020
From the August 2020 issue of HealthCare Business News magazine
As the COVID-19 pandemic continues to spread, healthcare providers worldwide face an uncertain financial future.
Many have been afflicted with shrinking margins and dried up revenue streams from delaying non-urgent procedures and shifting their resources toward the novel coronavirus.
In many cases, third-party equipment service partners offer a desirable value proposition and significant savings over their OEM counterparts when it comes to servicing capital equipment such as imaging technology. Although they may not maintain some of the newest technology entering the market (usually, those systems can only be serviced by the manufacturer), independent service groups can provider excellent service at a competitive price for technology that has been around for a few years.
Cost effectiveness and efficiency have always been top priorities in equipment service, but never before has it been as urgent as during the coronavirus pandemic. From modifying their hours of operation, to implementing social distancing guidelines for their service teams, HealthCare Business News spoke to a few leading independent service organizations to find out how they’re supporting their healthcare clients during these challenging times.
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Elective and non-urgent procedures represent a lucrative source of revenue for providers, but many of these exams (and scans) have seen dramatic cutbacks in utilization. This, in turn, has affected both the need and affordability of services.
“Because they’re seeing decreased revenue, we did receive calls requesting suspensions of service contracts and reduced cost of annual contracts based on scan volumes,” Mike Black, vice president of sales for Alpha Source Group, told HCB News. “We did everything we could to meet those requests and partner with our customers.”
Imaging rates have been hit especially hard by COVID-19. A study out of Yale in April warned that radiology groups should expect a dip of 50% to 70% over a minimum of three to four months. That means paying for service at a time when the technology isn’t bringing in the revenue it’s supposed to.
“Hospitals suffering from a significant decline in revenue are questioning all of the costs of service delivery—including existing OEM programs— they were using prior to the pandemic,” said Jerald Olsen, VP of sales and business development, and Wendy Diddell, EVP and chief operating officer for Richardson Healthcare. “When a system operates at half its intended capacity, it no longer makes sense to keep doing what you have always done. You have to look at other cost-saving options and third-party service organizations as well as in-house teams are well positioned to support this changing landscape.”