GE signs landmark service contract with Columbia/HCA hospital chain

March 15, 1995

Five-year, turnkey deal covers hundreds of acute-care hospitalsGE Healthcare Services of Brooklyn Heights, OH, signed a five-yearagreement on March 2 to provide comprehensive equipment maintenanceand asset management services to hospitals owned

Five-year, turnkey deal covers hundreds of acute-care hospitals

GE Healthcare Services of Brooklyn Heights, OH, signed a five-yearagreement on March 2 to provide comprehensive equipment maintenanceand asset management services to hospitals owned by Columbia/HCA,the nation's largest hospital chain.

The contract covers hospitals in the rapidly growing Columbia/HCAsystem. The company owns 201 acute-care hospitals, but a pendingmerger with HealthTrust could boost that total to 311 facilitieswith annual revenues over $15 billion, a Columbia/HCA spokespersonsaid. The merger was announced in October 1994 and awaits Securityand Exchange Commission approval.

The addition of HealthTrust hospitals to the agreement wouldgreatly increase the logistical complexity of managing the contractand its profit potential. Most HealthTrust facilities are equippedwith fewer than 150 beds and are based primarily in rural Southernand Southwestern communities.

The agreement between GE and Columbia/HCA calls for broadbasedcooperation between the two companies in equipment selection,asset management and service, said Brian Johnson, a GE spokesperson.

The agreement applies to all imaging equipment regardless ofmanufacturer and covers imaging systems operating in all existingand future facilities owned by Columbia/HCA in the next five years,Johnson said.

"The program is focused on improving quality and increasingproductivity for Columbia/HCA," he said.

Johnson was unable to attach a price tag to the deal. ManyColumbia/HCA medical engineering personnel displaced by the arrangementwill be offered positions with GE, according to Eve Hutcherson,senior public affairs manager at Columbia/HCA. The contract iseffective April 2 and will be implemented in stages, she said.

Representatives from Columbia Bio Medical Services Group andGE Healthcare will meet with personnel currently servicing Columbia'sdiagnostic equipment to ensure a smooth transition, Johnson said.

GE Healthcare Services was formed as a division of GEMS lastyear to manage the company's expanded equipment service managementprogram (SCAN 4/20/94). Breaking long-standing taboos, GE becamethe first multimodality equipment manufacturer to seek turnkeyservice contracts covering all imaging equipment operated by hospitalradiology departments. The Columbia/HCA contract is believed tobe the biggest deal signed since the division's formation.