Cost of Service Ratio and HTM

If you are a Healthcare Technology Management (HTM) leader then you will likely be asked by the Chief Financial Officer about the Cost of Service Ratio (COSR) to maintain the facility medical equipment.  Patrick Lynch, HTM Mega- Guru, defines COSR as:

 Cost = Original Cost of Equipment / Annual Cost of Maintenance = ___%

• Equipment Price = Original Equipment Manufacturer (OEM) list price and standard warranty.  Training and extended warranty excluded.

The lowest COSR is generally full in-house maintenance, the next tier is 3rd party, and the costliest is OEM support. As you try to be good stewards with your facility finances, you must consider several factors:

• Do I have the internal resources to include personnel and test equipment?
• If not, is training available to bring the service in-house?  If so, do a Return of Investment analysis
• If internalizing the service is not an option, what are possible 3rd party support?  Please carefully evaluate their capabilities and quality.  Be sure to negotiate.
• If OEM support is the only option, perform a risk analysis to compare contract to time & material support.

Unfortunately, it is virtually impossible to maintain everything in-house, but by analyzing and measuring all the possibilities pros and cons, you can make cost conscious decisions without negative patient impact.  I hope this high-view look at COSR has been helpful.