When customizing an MR service contract, providers always take on some level of risk; the level and type of risk will depend on the facility. For instance, a hospital with its own spare parts warehouse might select a contract including labor and preventive maintenance but excluding parts replacement.

Risk tolerance comes down to several factors, including the age of the provider’s MR scanners, access to labor and parts, and in-house maintenance expertise. These variables, and others, should be accounted for in the search for a service agreement that covers everything necessary, while leaving out everything the provider can take care of on their own.

While a brand-new scanner will typically be serviced by the original equipment manufacturer (OEM), an independent service provider (ISO) may offer cost advantages for MR systems that have been on the market for a few years. Additionally, an ISO may be a better option for providers depending on service flexibility, location, MR fleet utilization rates, the types of procedures performed with scanners, and more. HCB News sat down with four ISOs to discuss how hospitals and other providers can assess their risk tolerance, which is key to creating a cost-effective MR service strategy.

Knowing what MR service entails
Whether an imaging provider wants to take on high or low risk, Donald McCormack Sr., CEO of Fontana, California-based ISO Southwest Medical Resources, says any MR service contract should include some form of magnet coverage so quenches, helium loss, or wear to cold heads and compressors falls on the service provider and not them. “That's the highest expense associated with the service contract and the willingness to break that out and give them coverage, at the very least in a separate plan, is important,” he told HCB News.

Even providers with very high tolerance should have a preventive maintenance agreement in place to “maintain accreditation compliance and guarantee response time,” says McCormack, whose company specializes in GE HealthCare MR, CT, and PET/CT systems, and has a warehouse of over 20,000 replacement parts for the systems it services. Remote diagnostics and environmental monitoring can be valuable components of a PM contract.

“In the past, MR equipment that was older than five years was nearly never kept,” McCormack says. “Now, we have hospitals that have equipment that is 15 years old and are considering keeping and upgrading it. So, aftermarket upgrades in the secondary market have become something that customers understand the value of.”

The types of exams performed with an MR scanner also factor into how much risk a provider can handle, according to Larry Knight, president of Dallas-based ISO Altima Diagnostic Imaging Solutions, because frequent uses for highly complex procedures that require a lot of power may necessitate the need for a full-service contract.

Knight, whose company services Siemens Healthineers MR and CT scanners, including parts repair and replacement, installations and deinstallations, magnet quench support, and site planning, also stresses that even a full-service agreement does not cover every scenario.

“Almost every service contract from anybody is going to preclude or not cover any 'acts of God', like if a storm with lightning propagates a spike through the system and takes out $100,000 worth of parts. But anything that is not an 'act of God' can be covered on a full-service contract, which means there is zero risk to the owner and all the risk is taken on by the service provider.”

The history behind equipment, including its most common failures and approximate replacement costs for parts, can tell providers a lot about their servicing needs.

“Maintaining a log of the service history, PMs, and cryogen consumption will give you an idea of how much coverage you may need," suggests Jim McCay, the northeast territory manager for MR, CT, PET/CT at MXR Imaging, the largest independent distributor of imaging sales and service in the U.S. "By understanding your equipment, you will know what you can and cannot carve out of your agreement to save money and mitigate risk,” he said.

Based in San Diego, MXR sells, services, and provides training on MR equipment, installation services, repair coils, and parts in-house. It also replaces cold head units, refrigeration and helium fills, and repairs and replaces magnetic shielding.

Going the distance
Travel time between a facility and its service company can be the difference between having a scanner up within hours versus days. For this reason, a small hospital in a rural area with low scan volumes may be better off going with a nearby ISO that can offer short response time and next-day delivery of replacement parts for repairs, versus an OEM located over 100 miles away in a major city with a national distribution point for parts.

“The OEM never offers a next-day service contract unless the customer requests it, or the manufacturer knows they have competition,” says McCormack. “Knowing there's a second source alternative to the OEM can help, even if they want to stay with the OEM. This strategy has allowed providers to negotiate next-day service contract pricing and given them a strong negotiating capability with the OEM to lower prices to a more reasonable rate.”

ISOs are often run by former OEM employees and also have field service engineers who previously worked for manufacturers, but there may be a huge difference in the quality of service provided between one ISO and another. Choosing the right one for your needs will require research.

Any partner should be ISO certified and in regard to parts distribution, should have test procedures and bases in place for quality analysis, according to Dave Neffinger, sales director at DirectMed Imaging. His company, which supplies over 60,000 MR and CT parts for GE HealthCare, Siemens Healthineers, Philips, and Canon/Toshiba scanners, and trains ISOs on these machines, has ISO 13485:2016 certification for MR and CT parts and service and offers fully tested parts such as specialized MR coils.

“To figure out if a parts provider is reliable or not when you're walking into a facility and you see that they have a test base and lots of technical expertise in the building, you know you can rely on that provider to give you tested working parts,” he said. “If you do a site audit, and they don't have those things, likely they're not as reliable as the others.”

Additionally, providers should know which MR makes and models an ISO specializes in.

“We only service Siemens Heathineers equipment and primarily MR systems,” says Knight. “That limits the kind of scope there may be in servicing other modalities and other OEM-made solutions. There may at times even be modalities and equipment that are impossible to service unless it's by the OEM.”

A new era of ISO service
Cuts to reimbursement and thinner margins mean some providers are entertaining greater risk as a way to offset spending, while providers with full-service coverage may feel pressure to maintain higher throughput and utilization of their MR equipment to justify the cost of these packages. For that reason, service providers are offering more customized contract options.

“If your equipment is over five years old, a ready supply of spare parts is on the shelf ready to go in the secondary market, knowing that parts will be available for same-day or next-day delivery, depending on your geographic location, is something that most independent healthcare providers don't understand,” says McCormack. “They don't know that an independent service provider even has access to the parts for same-day delivery in the market.”

The need to assess whether ISOs can provide quality servicing and parts replacement will also continue to be a necessity, says Neffinger. “When it comes to parts, it's all about quality. And obviously, saving money for the customer would be the second-best thing there, but it's all about getting that customer up and running.”

McCay says that in any service contract negotiation providers should question service providers on, “how they would handle a down system and if they and their external resources are both ISO certified.” They should also ask them to “describe their service call escalation process, and any specialty coverage they have that is unique to the market.”

While ISOs will continue to be limited to servicing MR systems produced by specific companies, the scope of those services is likely to expand over the next few years due to growing debates and lawsuits around right-to-repair laws, says Knight. Evidence, such as the 2018 FDA report which found no evidence to suggest that work by ISOs pose safety risks to patients, have led the FDA to establish new laws and provide clarification on different activities that make it easier for qualified ISOs to service equipment.

“We're going to see a trend that makes it easier for ISOs to get the information to do the service in conjunction with that,” Knight said. “We're going to see a trend by the OEMs to make the software more available to third parties. I think it's going to be easier for an ISO while putting a much greater focus on the OEMs to prove and do service in an upstanding way.”

No matter how servicing changes in the future or how advanced scanners become, negotiating a good maintenance and repair agreement will always require providers to know how much risk they can take on based on what they can and cannot do, and research, ask questions about, and compare the offerings of different service organizations. Only then will they be able to determine which one can meet their individual MR servicing needs best.