AAMI News February 2018

Asked & Answered: Managing Service Contracts

This regular feature showcases questions and answers from professionals participating in AAMI’s online discussion groups, collectively known as AAMI Connect. AAMI does not endorse specific practices or advice. Participants in these forums are sharing their own experiences and insights.


Q: Managing service contracts is one of the primary tasks that healthcare technology management (HTM) should be on the top of, especially with the drive to control costs, whether deciding the level of support and whom to use or bringing the service in-house through a defined training and resources plan. Has anyone developed or written a policy that can help a healthcare organization create guidelines and responsibilities for each party (HTM, materials management, IT, end users, etc.), giving HTM the needed access and control over such contracts?


A: Managing the service contracts at your facility requires a relationship with the clinical staff, materials management, IT, and facility leadership. There needs to be a level of trust established between you and that multidisciplinary team: Trust between you and the end users so they believe you will deliver what you say you will deliver and that service will be equal to or better than what is currently delivered. Trust between you and materials management so that they believe you can work within the confines of their purchasing structure, which includes ethical behavior associated with purchasing decisions. Trust between you and IT so that they know you will source vendor relationships that abide by and respect the security needs of the network they are responsible for at your facilities. Finally, trust between you and the organizational leadership so that they understand you will be prudent with the fiscal resources, ethical in your behavior, and focused on delivering exceptional service. Once you develop that trust, then you can deploy a policy and process that defines how the HTM team will manage service and service contracts. Don’t think of it as “control” over service contracts; think of it as earning their trust to handle the responsibility of managing service delivery for the tools-of-their-trade that help them deliver exceptional patient care.

—Christopher Nowak, CBET, CHP, CSCS, corporate director of HTM and integration for Universal Health Service, Inc. based in King of Prussia, PA

A: There was some pushback initially, but over the years, we have demonstrated that HTM has the data to make educated decisions on the type of service coverage that best meets the operational and clinical needs of the hospital at the lowest cost, and the clinical leaders love that they no longer need to deal with the vendors and contracts.

To have an effective contract management program, you need:

  • Leadership support.
  • An arrangement with departments that may see clinical device service contracts you missed so they send them to HTM.
  • All contracts entered into your computerized maintenance management system with start and end dates, cost, coverage summaries, and equipment covered.
  • A written process outlining the steps a contract must go through to be executed and who has signing authority.
  • An HTM management team that can accurately budget for annual service contract costs.
  • A communication process that ensures all impacted parties are aware of the contract negotiations, can provide input, and know where the contract is in the process.

It also helps immensely, but is not necessary, to have one person responsible for contract management.

We have saved millions of dollars over the years by taking a centralized and standardized approach to managing clinical device service contracts.

—Heidi Horn, vice president of healthcare technology management at SSM Health


Do you have a question? Get answers from your peers on AAMI Connect, www.aami.org/connect.