From the August 2017 issue of HealthCare Business News magazine
Second to safety is the question of who has the legal right to service equipment. For years, medical device manufacturers have been required to provide service manuals to users of the equipment.
Recently, the U.S. Supreme Court examined whether the original patent of the equipment is broad enough to include the service, refurbishing or even licensing of the equipment. In June 2017, the Court ruled that the use of service tools and repair parts of a technology does not fall under the original equipment patent. This means, that for the time being, whoever purchased the technology has the right to service the technology.
The proposed law would also require a third party to maintain the same standards certified by the FDA for the OEMs. This does not affect in-house clinical engineering departments.
The bottom line is that ISOs emerged for a reason. As with any industry, service is an important issue when technology is involved. Along with the initial expense of acquiring technology, service can be a significant factor in the cost of ownership — anywhere from 3 to 7 percent of the cost of the original technology per year. (IT accounts for 20 percent per year.) Although small in comparison to a facility’s overall labor costs (50 percent) or even what a hospital spends on consumables (15 to 20 percent), service on medical technology could mean at least a $1.5 million to $2 million-plus (0.5 percent of the overall budget) line item for a 200-bed hospital. Larger teaching facilities could see this number easily reach $3 million to $4 million. Though OEMs should be able to provide the highest level of service, ISOs emerged to provide competition and a lower-cost option for health care providers.
Now it’s up to the FDA to decide whether there is a safety issue. It’s a debate that will probably go on for a while.
About the author: James Laskaris is an emerging technologies analyst at MD Buyline, Inc.Back to HCB News
