Don’t Lose Money on Service Contracts.

Would it surprise you to learn that hospitals lose money on service contracts because they can’t use all the services or benefits they are entitled to before contracts expire? It’s easy to know if service for non-working equipment has been completed, but what about all the preventative maintenance visits, software upgrades, workstation replacements, training, and more that are often included in service agreements? Despite best efforts to track service utilization, it often goes unused for a number of reasons. For example, during the COVID pandemic, many hospitals restricted access to facilities, and service providers were not always allowed on-site, even if service had been paid for. Here’s one easy way to avoid losing money by paying for service you don’t use:

Review service contracts at regular intervals (including end of year) and use the service and benefits you are entitled to before contracts expire. Establish a regular time to review contracts – quarterly, twice a year, etc. – so you know what services still need to be scheduled before contracts expire. If there is not enough time to get service completed, consider asking suppliers to extend the expiration date – particularly for PMs or costly upgrades – so you get the benefit without having to pay twice. Most suppliers can find ways to accommodate reasonable requests and you should feel comfortable asking for their help.

As another challenging year for hospitals comes to a close, consider how the right information – in this case when service contracts expire and what is still due to you – can help you get the most value, and avoid losing money on equipment service contracts. This will help keep your budget in check and make sure your equipment is “up to snuff” and ready when needed for patient care.