How to Reduce Equipment Repair Costs without Impacting Quality

Today more than ever, the healthcare delivery system is being challenged to innovate how and where patient care is provided. As the need for more integrated networks continues to grow, the relationship between the physician, health system, and technology becomes more important.

In this paper, BRG’s Joseph Arruda and Eric Alexander, along with St. Luke’s University Health Network, discuss strategy and approach for providers to evaluate and reduce equipment repair costs and other service expenses.

Purchased services, broadly defined as any purchased, contracted, or outsourced service across all functional areas of a hospital or health system, contribute to approximately 35 percent of the total supply chain spend. When reviewing equipment service agreements, it is a challenge to determine if your rates are competitive and balanced with the quality of services you are receiving. Equipment service agreements represent a large portion of the purchased services expenses that require subject-matter expertise, benchmarking, and market trends data, as well as repair cost/consumption rates.

The below case study examines the strategy, approach, and outcome of a recent equipment repair initiative with St. Luke’s University Health Network (St. Luke’s), which partnered with Berkeley Research Group (BRG), that resulted in $949,000 of savings/benefit. The organization’s strategy and approach provide a blueprint for other providers to evaluate and reduce equipment repair costs and other service expenses.