GE launches nationwide program to provide multi-vendor service

April 20, 1994

Effort could transform service of scanner installed baseThe service market for medical imaging equipment has been ripefor a shakeout as competing pressures put stress on equipmentvendors and health-care providers alike. Declining equipment

Effort could transform service of scanner installed base

The service market for medical imaging equipment has been ripefor a shakeout as competing pressures put stress on equipmentvendors and health-care providers alike. Declining equipment saleshave made vendors more reliant on service revenue, while at thesame time, customers are balking at high service costs. Somethinghad to change, and quickly.

A peek at what that change might be came this month, when industryleader GE Medical Systems of Milwaukee lifted the wraps on itslong-rumored program to provide multi-vendor service for health-carefacilities. In one fell swoop, GE is establishing an industrystandard for a new approach to health-care equipment servicing.

GE's nationwide service program is breathtaking in scope, inboth its current form and its potential to revolutionize the medicalimaging equipment industry. The program will seek to provide maintenanceand upkeep for potentially all the equipment at health-care facilities-- from medical imaging devices to biomedical equipment to computertechnology -- regardless of whether the equipment was manufacturedby GE.

GE has formed a new division within GEMS, GE HealthCare ServicesGroup, to handle the new service program. The group was formedin response to customers who said they were tired of dealing witha multitude of vendors for equipment service, according to StephenKellett, general manager of GE HealthCare Services Group.

"Customers are saying, `I'd like to go to one source tohandle all the requirements for services in the hospital,'"Kellett told SCAN. "Their main objective is to reduce theiroverall administrative burden."

GE's program gives customers a one-stop shopping source forequipment service, with GE either servicing equipment directlyor hiring subcontractors to do the work. The program can be tailoredto each customer's needs, ranging from equipment service on aradiology department level all the way up to hospital-wide service.

For hospitals with more comprehensive programs, GE will placea technical account manager on site to oversee the facility'sprogram. The account manager tracks the service histories of thecustomer's equipment and provides monthly and quarterly reportsto hospital management. The account manager's mission is not onlyto oversee the program but to consult with hospital administratorson ways to improve equipment service.

"The intent is to take an active participation in theoperation, to look at how everything is run to bring some costsavings to the operation," Kellett said. "We don't say,`Here is your price, you manage it.

We are right there with you managing it to hopefully makeyour operation better."

The overriding goal of the program is to improve the efficiencyof equipment service, which in turn should lead to better qualityand lower costs. GE is adhering to ISO 9000 quality standards,both for itself and for its subcontractors.

One of the program's first sites is Good Samaritan MedicalCenter in Zanesville, OH. GE is servicing all of the hospital'smedical imaging and biomedical equipment, Kellett said.

Opening Pandora's box. GE's effort is a bold move to changethe way medical equipment is serviced. But it also raises a hostof fascinating questions. For example, will GE engineers serviceequipment from, say, Siemens or Picker? Or will Siemens and Pickeremployees work as subcontractors for GE?The answer could be alittle of both, according to Kellett.

"We have a number of engineers who have multi-vendor trainingand background," he said. "We will fill any gaps thatwe may have in delivery of service. We will also subcontract inthe event that those gaps cannot be filled readily, and that subcontractormay be the OEM or an ISO."

The needs of the customer are paramount, however, Kellett said.If a customer wants its Siemens MRI scanner serviced by Siemenspersonnel, GE will accommodate them. GE has contacted other vendorsabout the plan to enlist their support for the program.

Another issue concerns intellectual property rights regardingthe advanced diagnostic software used to service imaging equipment.GE has aggressively defended its copyrights on advanced diagnosticsoftware from unauthorized use by ISOs. The vendor is maintainingthe same position with regard to software of other OEMs, Kellettsaid.

"We will go strictly by the rules as to what's generallyavailable and what's proprietary. If it's proprietary we won'tuse it," Kellett said. "We are committed to developing(our own software) if that's what's necessary."

Finally, GE and its customers must cope with conflict-of-interestissues regarding new equipment purchases. Any single-source multi-vendorservice program would give the primary contractor great influencein the equipment purchasing process.

GE will provide objective consulting regarding equipment purchases,according to Kellett. Giving customers biased information wouldonly damage the vendor's credibility with an account, he said.

Competition drives the medical imaging industry, and it ishighly unlikely that GE's multi-vendor service program will gounanswered by competitors, who are rumored to be developing similarprograms. Indeed, when GE contacted other OEMs to ascertain whetherthey would support a GE contractor, several vendors respondedby asking if GE would return the favor if they developed theirown program, Kellett said.

Ironically, GE's effort corresponds to what independent serviceorganizations have been saying for years: Customers increasinglywant to deal with only one vendor for medical imaging equipmentservice. GE's program is only the first of many that will reshapethe service industry, according to Thomas Quinn, president ofImaging Equipment Services, a Pittsburgh-based ISO.

"This is only the start of what is going to happen,"Quinn said. "It suits the customers' needs better to havea one-stop shopping company."