Equipment Maintenance: Calculate hidden costs

Q. What are the hidden costs of DIY respiratory equipment service?

A. When you think about servicing your ventilators in-house, O2 concentrators and other respiratory equipment, it seems pretty simple and cost-effective. Just hire a few technicians, order the parts, put them to work and voila! You saved the expense of sending your equipment to an outside service provider.

When you begin to examine the not-so-obvious expenses related to performing these services, you may decide after all to send them out for service.

Let's take a look.

Technician expense: You have the management and overhead costs of interviewing and hiring the right technician. Ventilators must be serviced by a factory certified technician. As you might expect, you must send the technician to the OEM for training. O2 concentrators are easier to service, but still require weeks of on-the-job training before a technician is self-sufficient.

Parts management expense: Someone must consistently review and report on parts inventory. Depending on how many different models of vents and concentrators you have, the number of SKUs needed can easily exceed 100 unique parts. Then consider inventory shrinkage and monthly and annual inventory cost, and the administrative costs become pretty clear. Also, someone needs to test incoming parts and return bad parts to the vendor for credit.

Poor quality expense: Service quality can be fleeting, depending on the technician, his/her training, and how they feel on any particular day. In the respiratory equipment business, poor quality of a ventilator repair can cost a patient their life. Now that can be very expensive.

Most well-managed HME companies focus on what they do best—patient care—and they leave equipment service to the professionals who do it for a living. Their businesses have fewer moving parts, are easier to manage and, ultimately, more profitable.

Jim Worrell is chief commercial officer at Quality Biomedical. Reach him at jworrell@qualitybiomedical.com.