Strategic timing for service contracts and equipment purchases
Decisions regarding service must involve a coordinated and intentional review of patient volumes, procedure mixes, backup technology for system downtimes, potential revenue losses, and the impact of patient rescheduling. If patient volumes are low, downtime may have a lesser impact. However, in high-volume scenarios, the effects can be significant, especially in the absence of backup systems capable of accommodating patient loads.

Like value analysis workflows for evaluating and purchasing medical equipment, assessing service also requires collaboration with clinical teams and in-house engineering to account for all relevant variables. Hospital teams need a structured and detailed approach to manage service contracts, keeping track of start dates, end dates, service history, and utilization volumes. Planning and making informed decisions well in advance of contract renewals is critical for operational success.
The increasing trend of mergers, acquisitions, and partnerships within the U.S. healthcare market has created opportunities for consolidating service planning and pricing considerations. Many organizations have started to unify all contracts with a single vendor under a master service agreement. At the same time, efforts are being made to align contract renewal dates, simplifying contract management and decision-making processes related to service. This consolidation also allows for a thorough review of service levels to ensure that the appropriate service level is being maintained or determine if an adjustment is needed. In some instances, it may be beneficial to consider switching to at-risk models for aspects that can be efficiently managed through in-house services.

This approach also paves the way for preparing and planning for the replacement of outdated equipment approaching the end of its useful or service life. By coordinating this effort with annual capital budget planning, hospitals can foster a more controlled process based on data rather than emotional decision-making.

Innovative service options: Remote monitoring and non-obsolescence
Some vendors have also expanded their service offerings, introducing a variety of service levels with numerous optional inclusions and exclusions. Some of the more advanced—and costly—options include real-time remote monitoring to track system performance metrics and identify component-level degradation before it leads to system failure. Another notable option seen in certain technologies involves non-obsolescent features, where the contract includes hardware and/or software upgrades or refreshes during the agreement term. This can allow for operational expenses covered by the service agreement to upgrade or even replace a system entirely with a newer generation model as it becomes available, often resulting in lower costs compared to traditional agreements.

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