Beware excess coverage.
That was the first lesson of a 1-year-old U.S. Health Corp. asset management program. The system expects to save more than $1 million, or 18% of previous annual spending, by the end of this month because service contracts were revamped after a careful evaluation of its needs.
Too much maintenance coverage for equipment repairs was a bigger cost drain than inadequate maintenance, said Daniel Loch, director of materials management operations for the Columbus, Ohio-based system.
"People typically don't have enough information to estimate what is an appropriate level of coverage-so they compensate by over-coverage," he said.
Last year, U.S. Health signed a contract with Serviscope Corp. of Wallingford, Conn., covering three of its eight hospitals and $65 million in equipment (See chart). A fourth hospital recently was added.
Under the agreement, Serviscope took over responsibility for maintenance at the hospitals. Using data on the expected performance of equipment, it renegotiated service contracts with outside firms. In some cases, Serviscope decided to maintain equipment itself or use hospital engineers.
Several firms recently began marketing similar asset management programs. Besides making equipment maintenance more systematic, such programs also are meant to help hospitals use equipment more wisely.
In one example of "capital conservation," U.S. Health chose to enhance the capabilities of three cardiac catheterization rooms, instead of replacing just one, at about the same cost. "(Upgrade only one) and physicians don't like the old rooms," Loch said.
It will draft a five-year plan with Serviscope for replacing and upgrading equipment by next April. In the long run, the system expects to use Serviscope data to tie equipment cost to clinical pathways, Loch said.