As hospitals and clinics become more analytical about their purchasing decisions, they are starting to evaluate the total cost of ownership (TCO) of capital equipment, including portable capital equipment, rather than the initial outlay alone. Hospitals and clinics are recognizing that if they want to control and contain their costs, they must rst understand what they’re actually spending over the lifetime of their equipment. New resources are emerging to support these calculations. At a recent Radiological Society of North America (RSNA) meeting, for instance, a forum was held where industry experts discussed critically important components of TCO for the purchase of imaging equipment specically. These components included the nancial, quality, and technical aspects of the equipment’s future maintenance and repair. Similar resources include a recent retrospective study reported in Imaging Technology News and conducted by Alpha Source that calculated TCO in part by tracking the service history of a large, nationwide installed base of a specic type of ultrasound equipment over a three-year period (2010 to 2014). The evidence-based report considered the economic benets and risks of comprehensive service contracts versus service and repairs billed hourly versus in-house biomed resources, and ultimately found a wide range of expenditures by type of ultrasound machine. Although the average total annual spend across all units was $9,800 per year, the high end of the range was over 5 times (5X) that. Furthermore, about one quarter of the hospitals were found to have spent 50 percent more than the average cost of a contract, and 10 percent of hospitals spent twice the average annual price of a service contract by purchasing hourly billable service (T&M) and parts. Such analysis is insightful and gets to the specics needed for a TCO calculation. However, service and repairs are only part of the story regarding the total cost of owning imaging equipment—other categories of costs, discussed below, also need to be taken into account.

Training and Education

When thinking about total cost of ownership, hospitals need to make sure the technology vendor behaves more like a partner by educating its users into expertise. For instance, the vendor should provide a robust training program that can give users a high level of condence to operate, and to a certain extent troubleshoot, the equipment they will be working with. That training must necessarily comprise both onsite and online modules to satisfy the need for in-person communication as well as access on demand, any time. Forward-thinking OEMs are today providing training portals that include a rich array of technical how-to content; application/use case advice and techniques; and workshops, seminars, and other formats that feature increasingly sophisticated multimedia. If the OEM is offering all of these resources as a value-add benet, it represents a major cost saving for a healthcare institution because training and education can be an expensive proposition.

Warrantees and Service Rates

An OEM’s warranty is a good barometer of their condence in the quality and durability of their equipment. Customers with longer warranties often have a lower TCO as those policies cut service costs signicantly. Robust, longer warranties can help keep annual service costs in check—as low as 2% of the purchase price versus the high end, which can range from 10-14%. Aside from warranty duration, providers should study the contract for details about coverage before a purchase decision. Some of the strongest warranties cover user-driven failures, for instance. Warranties that cover expensive ultrasound transducers from user-driven perils like damage from drops can save the purchaser considerable money. In many ways, warranties are the real linchpin of a TCO calculation. Organizations such as KLAS rate who has best-in-class user experience; these evaluations are worth referencing when considering a medical equipment purchase. An in-depth examination of warranties with advice will follow in a second article in this publication.

Conclusion

A better understanding of true TCO will enable providers to make smarter decisions about durable imaging equipment, and ultrasound in particular. An article to follow will focus on one of the consequential and complex aspects of TCO, the warranty