An Equipment Maintenance Management Program (EMMP) replaces multiple service agreements and extended warranties with one agreement that costs less and is more flexible than traditional service agreements. By providing a single point of contact for managing service events and accessing a vendor-neutral network of qualified service providers, an EMMP allows you to re-deploy budget and staff to higher-value projects. Let’s look at a 100-bed hospital to see how an EMMP can reduce variation in the effort and cost of maintaining equipment uptime.
Replacing Traditional Maintenance and Repair Contracts
Based on sample contracts collected from healthcare providers in 2022, The Remi Group (Remi®) found significant price variation in annual contract pricing for some of the most common medical devices in use.
For this example, let’s say the hospital has only one of each of these equipment assets. In that hypothetical situation, their annual maintenance contract expense would be $42,500 – $71,000. Healthcare organizations using Remi’s EMMP for these assets realized an average of 20 percent savings, freeing up $8,500-$14,200 per year in maintenance and repair expenses. EMMP participation also helped shield these hospitals from feeling the full effects of inflation. From 2020-2022, the conventional extended warranty contracts reviewed by Remi included increases in labor and travel averaging 25%, parts increases of 5-10 percent and manufacturer contract prices rising 10-45 percent overall compared to EMMP contract rates. Remi provides a complimentary contract review for Washington State Hospital Association members if you would like to compare your current maintenance contracts to the best available pricing.
Reducing Administrative Burdens of Parts and Repair Procurement
In addition to finding room in your equipment maintenance budget, an EMMP can help your team find additional hours in their workweek. Back to that 100-bed example hospital, with an average of 10 devices per bed, let’s look at the labor impact of maintaining equipment uptime.
Example: 1,000 equipment assets (10 assets x 100 beds) from 50 manufacturers:
- Multiply those 1,000 assets by 50 different dispatch phone numbers to research for service requests;
- Multiply each service event by the staff time required for validating work completion, approving and processing work orders and invoices, and verifying payment; and
- Justify over 2,000 FTE hours per year to manage the administrative work of maintaining an equipment portfolio without EMMP support.
Where could you re-deploy 2,000 hours of labor in your organization by outsourcing non-value added activities to a trusted EMMP partner?
Remi and PartsSource
Washington Hospital Services Industry Partner Remi is now backed by Bain Capital, allowing them to enter a strategic partnership with PartsSource, the leading online marketplace for medical replacement parts and services. PartsSource and Remi share a common mission: to provide analytical, evidence-based, and data-driven solutions that help their customers make smarter procurement decisions and generate greater value and throughput from their mission-critical equipment.
This partnership delivers significant expanded value for WSHA, including increased access to parts with over four million on-demand parts and services and improved response time through an expanded network of over 5,000 pre-qualified service professionals.
PartsSource has been reducing the cost of delivering healthcare since long before their partnership with Remi. According to a study in the Journal of Clinical Engineering [i], data from 500,000 purchase transactions in over 90 health systems revealed that health systems spend 10-30 percent more than necessary on parts and repairs when operating without a data-driven procurement partner.
PartsSource’s enterprise software platform enables healthcare providers to maximize asset uptime, reduce costs, and increase procurement efficiency related to equipment maintenance. A critical part of the PartsSource solution is their online marketplace which provides the information and decision-support tools that health systems need to select the best vendor for each item they order without doing additional research. The marketplace acts as an intermediary between healthcare organizations and thousands of suppliers, and PartsSource ensures each order is fulfilled and handles any returns. In addition, PartsSource provides feedback to each supplier on the quality of its parts; it may suspend a vendor that continues to deliver poor-quality parts. PartsSource clients using the marketplace’s decision-support insights have reduced their return rates by 6x, and significantly reduced their labor costs compared to traditional parts ordering processes.
[1] Behm, Jason. “Reducing Cost Variance and Increasing Quality Across Medical Device Maintenance Purchasing.” Journal of Clinical Engineering, vol.45, no.2, 2021, pp. 94-97.
Remi is a Washington Hospital Services Industry Partner. The Industry Partner program connects hospitals with product and service organizations to create efficiencies, lower costs and deliver exceptional health care. For more information about Remi or the WHS Industry Partner Program, contact Cynthia Hay at cynthiah@wsha.org or call (206) 216-2526
