From the August 2016 issue of HealthCare Business News magazine
8. Can third-party vendors provide the service needed at a lower cost? In some instances, this can be an excellent option for hospitals to save money, but these types of contracts should be looked at on a case-by-case basis. For high-end or other technologies that require specific expertise, remaining with the OEM is often the best option. The reason for this is twofold.
First, many of the more advanced technologies require proprietary diagnostic software that is not available to third-party service providers. Secondly, the OEM engineers are trained specifically on that type of technology. For low-end technologies that may require minimum service, a third-party contract can make financial sense. As always, it is important to balance risk with savings. Customers should always consider the trade-off of value versus cost. We often find for critical technologies, it is not cost-effective to consider a third party if its ability to repair a system in a timely manner is limited.
9. What contract language should be included in service contracts?
Although the legal department should always carefully review all service contracts, we have found there are five clauses to always include in any service contracts to protect the facility.
• Multiyear Service Contracts: These contracts are typically priced lower. Facilities should negotiate paying on an annual basis and at a fixed rate throughout the contract term. The option to change contract levels depending on system performance, or renegotiate price depending on the service quality, should be included.
• Performance Guarantee Clause: This ensures that the equipment is performing to the agreed-upon performance specification and will eliminate any finger-pointing if a service issue arises.
• Response Time Guarantee:M Response time to service problems is vital in choosing a service contract, especially with systems that can’t afford downtime. These must be provided in writing and acceptable to the hospital before the purchase order is issued.
• Uptime Guarantee: Many vendors will provide a 95 percent to 98 percent uptime guarantee on their equipment. Vendors typically calculate uptime guarantee on a 24/7 basis, but uptime guarantee should be calculated during specific hours of operation.
