By Matt Skoufalos
One of the most significant, costly and critical components of owning any piece of medical imaging technology is establishing a network of support around keeping it functioning at a high level for as long as possible. Critical to ensuring that support is a robust service contract; however, the variability and complexity of structuring such an agreement requires careful consideration and a detailed review by subject matter experts.
Dean Skillicorn is the medical imaging service manager for clinical engineering at St. Luke’s Health System in Boise, Idaho. A veteran of the medical imaging service industry, Skillicorn has decades of experience in contract management and device repair. He said the most important piece of advice he can offer to anyone working through a service contract is knowing, in detail, the terms and conditions of the deal.
“People need to understand what they’re trying to buy, first of all,” Skillicorn said. “What type of service agreement are we talking about? Is it a full coverage service agreement? Shared services? Point-of-sale versus warranty expiration? Organizations really need to understand the playing field of what they’re buying.”
When reviewing contract language, the organization should have a process by which legal, supply chain, IT, HTM, and the user of the equipment all understand the terms and conditions and what value those terms, conditions and options bring to the organization, he said.
“We have a group that’s been developed specifically for contract management in our organization,” Skillicorn said. “Supply chain owns the relationship with the vendor. They are brilliant about it. They ask HTM about what’s hidden in these contracts. Organizations need to manage their vendors, and it has to be through supply chain.”
Even in full-service agreements, explicitly defined terms and conditions can help protect a medical imaging customer from a significant, unanticipated bill. Moreover, Skillicorn noted, negotiating an “out clause,” whereby the parties have options for exiting a deal that no longer serves their interests, is another critical component of a contract.
“You have to understand what’s included, and the cost of that inclusion,” Skillicorn said. “If they have options – or what look to be options – buried in the service agreement, you need to have them separate those options out, and give you a value if you were to do it on a time-and-materials basis. A lot of people miss this opportunity, and they don’t understand the value of it. Customers need to become more knowledgeable about what is in their contract language and manage it for their benefit.”
Skillicorn also underscored that customers must understand their coverage options, whether they make sense, and if those coverages should be strengthened or relaxed based upon utilization data. For example, in covering CT scanner tubes, which are high-replacement parts, some vendors have moved on from measuring their lifespans in terms of number of slices used to the number of exams conducted.
“When organizations are reviewing and designing service agreements, they must understand their exposure for large-dollar and high-utilization components such as tubes, detectors, etc.,” Skillicorn said. “Customers have to understand their utilization. I’m not against point-of-sale service agreements, but customers need to be concerned with discounting and length of term after warranty expires. They need to better understand what they are purchasing.”
Comparably, for advanced imaging modalities, it’s advisable that customers specify contract clauses relevant to the unique nature of those technologies and their replacement parts. In cases such as these, Skillicorn suggests writing into the contract uptime performance standards that are related to device utilization. This means not only measuring the uptime during contractual hours, but understanding how those contracted hours affect the availability of systems should they be unavailable for service during peak utilization hours. He also advised that the contract should include expectations about parts delivery – including availability, restocking, and shipping costs – and performance penalties against each clause of the contract due to performance.
“These agreements are profitable for the vendor,” Skillicorn said. “You’re betting that they’re going to be in your organization servicing your equipment a specific amount of time, and you want that large value out of the deal. They’re betting that they can control that service and the cost of the parts based on remote diagnostics. The challenge is to make sure that as the customer you are getting the biggest advantage of your service dollars as possible. The goal? Significant uptime, very little service, and very little interference with peak utilization hours where the equipment is truly needed to deliver high levels of care.”
Skillicorn believes that the most important new option in today’s service agreements is an obsolescence management program.
“These programs can help an organization extend the life of a piece of equipment, and keep technology current, and keep upgrades off the capital books,” he said. “This is all about partnering with your vendor, but you have to be thinking about the life of that equipment and how long you can keep it in the organization. The solution that the vendor offers to extend life can be awfully attractive.”
“In addition to keeping medical imaging equipment functioning to the fullest, customers who have the resources and experience to manage their service needs in-house still need device-specific training and software keys to service those devices. Both should be included in the construction of any service contract,” Skillicorn said.
Vendors should be flexible on options and designing coverages for organizations based upon organizational needs.
“If you have the resources and the experience in house, you need the vendor because you need the service keys,” he said. “Aligning with the OEM, in my opinion, allows training and service keys to be brought to bear by in-house service organizations. Partnering with OEMs is important.”
“Some of the service agreements today, specifically for major imaging devices, come with the opportunity to have user education options, and I advocate purchasing those packages for users,” Skillicorn said. “Take a look at the education components of the contract. They can be beneficial to keeping staff updated on how to appropriately operate the system and educate new users.”
Finally, Skillicorn noted that all service contracts should utilize definable performance indicators and the vendors’ compliance with them. He advises evaluating the known history of a device over the lifetime cost of the contract as compared with time and materials costs for servicing it. Other opportunities might exist within that lead to negotiate relevant needs for the organization within the terms of the deal, including scheduling off-peak hours for repairs and preventive maintenance, stocking common replacement parts locally, and scheduling routine performance reviews to maintain compliance with terms of the deal.
“We create our own scheduled business reviews depending upon the organization and how much business a vendor does with us,” Skillicorn said. “We will do quarterly, semi-annual, and annual reviews. Normally we work with the vendor and say, ‘These are our expectations, and this is the penalty if performance expectations are not met.’ ”
“If expectations are not met, then it’s my job to engage supply chain management to assist in resolving performance issues,” he said. “When you start putting pressure on holding vendors accountable, then vendors start complying better. Utilizing routine business meetings provides you with performance data to ensure you meet your established performance standards.”
Eric Massey, regional director of operations, field service, for Intelas, described contract negotiations from the perspective of an independent, third-party medical imaging equipment servicing provider. Massey’s differentiators over other service options include Intelas’ quick response times from site-based service engineers and OEM-trained technical support engineers.
“What sets us apart is our commitment to putting dedicated technicians and engineers on-site,” Massey said. “It’s a model designed to give hospitals immediate response and peace of mind. Add remote access capabilities, and the response is instant – eliminating long waits for an engineer.”
He added that maintaining control of technical documentation is just as critical as rapid response. Hospitals, he said, should ensure they hold the service manuals, the latest software revisions, and preventive maintenance backups for their imaging devices. Without them, service can be delayed or limited, regardless of who performs the work.
Intelas maintains a network of imaging engineers and biomedical technicians who are capable of providing surge capacity or vacation coverage. Having the combination of on-site, field service, on-demand traveling BMETs, regional and national imaging support provides a breadth and depth of experience that is unparalleled in the HTM service world. This flexibility also allows for cross-training and career path opportunities, including a robust BMET apprenticeship program, and a BMET-to-imaging program. This enables continual investment in and expansion of talent. To meet specialized hospital needs, Massey brings in expert talent and simultaneously trains the on-site team, ensuring immediate resolution and long-term service readiness.
“We have a talent pipeline built that can quickly fill in and support a wide range of needs across the HTM spectrum,” said Massey.
In addition to on-site engineers with remote access, Intelas can offer predictive service modeling based on remote-access data and error logs, which can be used to anticipate common device failures before they happen and proactively schedule repairs on critical assets including CT, MR and interventional imaging systems.
Intelas leverages its forward stock warehouse locations nationwide to support sameday repairs, a capability that helps meet key performance indicators critical to clinical teams.
Massey emphasized that structuring contracts carefully is essential to balancing coverage, cost and longterm readiness. He advises hospitals to evaluate service requirements for new equipment, especially if it is a new platform. In some instances, it makes sense to consider extended warranty terms or a short-term OEM service contract until the new technology is proven and reliable.
“It allows time for our team to evaluate the technology, build the service plan and put a training program in place to transfer knowledge to the hospital’s on-site staff,” Massey said. “That way, they’re fully supported when the OEM warranty or contract expires.”
He added that in many cases new equipment is built on an existing platform where Intelas already has deep expertise. In these scenarios, the transition can happen sooner.
Looking beyond that initial new technology maturation period, Massey said the focus shifts to ensuring stability and efficiency over the long term.
“By the time we assume service, we already have the data, the trained staff and the forwardstocked parts in place,” he said. “That means hospitals see a seamless transition with no disruption to patient care.”
Critically, Massey emphasized that service providers must be candid with clients about what they can provide and whether those needs can be met immediately or in the future.
“While our service process follows proven standards, each program is customized to the specific needs of the hospital,” Massey said. “Every customer has unique requirements. For new clients, we typically request a 60 to 90day startup period to develop and implement a service plan that meets their goals and ensures continuity. For existing clients, we provide a comprehensive inventory and contract database, giving customers options and time to refine their service program next steps with confidence.”
That proactive approach not only prevents disruption but also supports financial predictability and productivity for the organization.
Importantly, Massey said that each service contract is built around key performance indicators (KPIs), like service response time and device uptime, with financial penalties tied to each if they are unmet.
“That holds us accountable. I’m fully transparent with my customers,” he said.
Shelby McCarty, imaging director of service at Renovo Solutions in Irvine, California, highlighted key considerations that often may be overlooked when medical imaging device customers review service contract terms. These include technician training, coverage exclusions, end-of-life agreements, loaner equipment provisions during downtime, and contract termination options.
Although most contracts outline scope of coverage for issues such as replacement parts, labor rates, service hours, and software support, McCarty emphasized the importance of setting clear expectations between equipment owners and service providers, including escalation processes for managing issues, and exit strategies for moving out of an agreement, if necessary. Shared-risk agreements among service providers are increasingly common, he noted, as are contracts tailored to specific operational needs.
In evaluating contracts, McCarty identified valuable performance indicators that should be stipulated in the agreement, including mean time to repair (MTTR), first-time fix rate (FTFR), preventive maintenance compliance, and response time windows. Performance-based contracts should detail how these metrics are measured, and include penalties for non-compliance. Robust contracts also feature escalation and penalty clauses, along with processes for documenting issues; if terms are not met, customers may renegotiate, switch vendors or, as a last resort, pursue legal action. Regular contract reviews (quarterly, or more frequently) can help avoid major issues, he said.
When drafting contracts, McCarty said professionals with expertise, budgeting authority, and operational roles should be involved, including those in clinical engineering, imaging leadership, supply chain, finance, legal, IT teams, and executive leadership, when possible.
Whether signing a service contract with an OEM servicer, an ISO (independent service organization) provider, or creating a hybrid, shared-responsibility model, each offers benefits, McCarty said. OEMs may offer system upgrades and exclusive software access, while ISOs can provide flexibility in parts sourcing, service levels, and sometimes even onsite staffing.
“Cost savings and flexibility are key,” he said. “ISOs often excel in servicing equipment past end-of-life dates and focus solely on service, not equipment sales. Hybrid models can also succeed when roles are clear and internal support is strong.”
For customers who don’t sign with OEMs, it’s critical that they have plans for sourcing replacement parts, technical manuals, and service delivery, McCarty said. He recommended ISO-certified suppliers for OEM and aftermarket parts, AIAT documentation portals for access to OEM service documents, and trusted, vendor-agnostic third-party remote monitoring service providers.
“Remote monitoring of ‘big-iron’ devices is crucial in today’s healthcare economy when device downtime is often detrimental to hospitals,” McCarty said. “Troubleshooting time and travel time to the site can often be greatly reduced through these remote access capabilities. This leads to fast diagnosis and better uptime for the organization and more scan time for the customer.”
For rural or distributed hospitals facing resource or staffing challenges, McCarty recommended remote support, shared services, tiered contracts, or training onsite staff for basic maintenance.
In every case, however, he believes that the service contract review process is where organizations can make informed decisions that optimize service, value and flexibility. The review process can also ensure that all stakeholders are prepared to choose the best path forward for their organization.
