Understanding Self-Insured Maintenance (SIR) Programs — Healthcare Equipment Maintenance

The current economy has forced healthcare organizations in the united states looking for ways to save money. As a result, many organizations are investigating the annual cost of maintaining their healthcare equipment inventory. In the past, it was common practice for healthcare organizations to purchase Original Equipment Manufacturer (OEM) service agreements for all their healthcare systems from patient monitoring to sophisticated diagnostic imaging systems. However, OEM service agreements are often very costly, service options are limited, and reports on financial cost benefit analysis, vendor issues, or equipment performance are rarely provided.

As an approach to reduce maintenance costs and gain control over their maintenance budget, many healthcare organizations are challenging the rising cost of OEM service agreements by building in-house service capabilities, purchasing multi-vendor service programs, and working with providers of Equipment Maintenance Management Programs for customized solutions. Many healthcare organizations have found that a hybrid solution, using a combination 私密處止癢 of in-house biomedical staff with an Equipment Maintenance Management Program (EMMP) and the selective purchase of necessary OEM service agreements, provides best long-term and cost effective solution. This method provides greatest level of control, vendor flexibility, and cost containment possible to handle the wide range of equipment used by healthcare organizations.

Over the past few years, insurance brokers have been promoting an insurance solution to address the healthcare maintenance cost issue — the Self-Insured Maintenance (SIR) Program. In insurance terms, this product is known as a deductible program. While the MISTER Program is currently offered by a handful of insurance companies, aggressive insurance professional marketing of this product in the healthcare space has created interest, questions, and some confusion.

The MISTER Program is explained in more detail below. It is important to note that the potential financial benefits of the MISTER Program rely on many variables and can be overstated by the insurance professional if they trust unreasonably low maintenance cost assumptions. In order to measure the potential selling point of the planned MISTER Program, it is imperative to consider all the factors described below.

MISTER stands for Self-Insured Maintenance, which is insurance coverage using an aggregate deductible structure as an approach for constraining overall maintenance costs for insured equipment. Unlike your typical personal insurance experience, whereby a homeowner’s policy occasionally includes a “per event” deductible limit, the MISTER Program is an aggregate deductible. This means the insured must pay for the cost of maintaining their equipment, and the insurance policy will provide no financial protection, prior to the policy deductible limit has been satisfied. When this occurs, the deductible policy begins to work like a traditional insurance policy and future maintenance expenses, “losses”, may be eligible for refund.

The MISTER Program replaces OEM service agreements with an insurance vehicle for constraining maintenance costs. The healthcare organization identifies specific equipment to be insured, cancels the OEM service agreements, and enters into the MISTER Program to limit maintenance cost exposure for that equipment. The insured (healthcare organization) pays the provider insurance premium for the coverage, plus an admin fee to cover account providing and insurance professional commissions. The insurance coverage only becomes relevant when the client has satisfied the policy deductible. The insurance company unilaterally determines what maintenance expenses will be applied to the deductible. The client accounts for paying all maintenance costs for the covered equipment until such time as the insurance company believes that the maintenance expenses were both eligible for coverage you.

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