Service Contract; worth the money or not?

Service Contract; worth the money or not?


Service Contract is a big deal. ID-10095034 freedigitalphotos.net It’s talked about all the times and often brought up during sales process as a bargaining chip.  Is it worth the cost?  How do you know if it has a good coverage or not?  Honestly, this is one of the toughest question to answer.  Short answer is ‘depends on what you’re buying and your comfort level’.  This in article we’ll explore a few different examples of C-Arms deals and explore what might be the best option based on different scenarios.

And most doctors/customers probably heard you’re saving money by getting a service contract.  Is that true?  An answer to this is not so simple.

On a C-Arm, typical service contract range from $10,000 ~ $16,000 per year.  Its price tag is expensive enough to make you wonder.  Am I wasting money with service contract or is it worth the cost?

When you’re buying a TV or major household appliance, many media and online sources say you most likely won’t need a service warranty.  Chances of your TV or Fridge having a major issue within first few years is slim to none thanks to advanced technology and manufacturing process.  Then what about for medical devices?  Medical device technology is just as advanced, isn’t it?  Sales people do tell you that a brand new unit has life span of 10+ years.  And 7+ years even for a refurbished unit.  So are they just lying when they try to convince you to get a second year warranty?

It’s not a simple yes or no.  Consider referenced core parts price below.

z7 parts cost

C-Arm in the picture is ZEN-7000.  And this unit’s parts pricing is one of lower end in the market.  But as you can see, main parts on this unit has very high price tag.  A mishap with monitor can cost you $2,400 while unexpected tube issue or damage to lens within I.I can cost up to $14,000.  And this price doesn’t include labor portion.

When your TV or appliance break at home, what do you do?  You would either Google or look in yellow page (if you still got one) for a repair man nearby.  And usually their fees are affordable mainly because there are plenty of repair shops around. (Or you can find one on Craigslist)  And while you may regret not getting that 5 year contract from Sears, bill from this repair probably won’t cost an arm and a leg.

But then, you didn’t pay $85,000 to buy your TV.  At the end of the day, it’s all relative.  Unlike electronics or appliances, finding a technician who can diagnose and fix these medical equipment are a bit more difficult.  And just because a tech has experience with a C-Arm, it does not mean the tech can fix all kinds of C-Arm.  Due to this factor, labor portion of any repair job is significant.  And it often comes with premium due to travel cost associated with the repair.  A typical daily labor charge can vary from $1,000 ~ $2,500 based on your location and what kinds of work is required.

ID-100271334 from freedigitalphotos.netLastly, shipping for these parts are also a factor.  Because these medical equipment are something you use almost everyday and is directly connected with your revenue source, you do need these units to be fixed right away.  It’s rare to find a clinic that says ‘Take your time fixing the unit.  We don’t need it for next two weeks’.  Expedited shipping cost for these core parts which are very heavy and bulky due to protective packaging can cost anywhere from $500~1,000.

So, let’s add up.  If you are having a major issue and need a new tube.  Here’s your estimate to fix it.

Parts $12,000 + Labor $2,000 + Shipping $1,000 = Total $15,000

Now, chances of you needing to replace tube within first few years is slim.  Other mechanical parts or monitors along with boards are usually first ones to go which cost significantly less.  But even when you’re having no issue, you are supposed to get the unit calibrated to meet state regulation either every year or every other year. (Depends on state)  Normal labor charge of $1,500 ~ $2,000 would apply in those cases along with any required parts or extra time charge that might be needed to repair the unit as needed.  However, I have seen customers who will just have unit inspected by state without calibration and pass for many years.  After all, calibration is just to make sure it can pass inspection, technically.

If you look at the shockingly high costs, you can’t help feeling little bit more warm toward service contract.  In a sense, medical device service contract isn’t same as an extended warranty for your electronics.  It’s more of an insurance policy to protect your ability to run your clinic when something goes wrong with one of your machine.  Getting a service contract for your device, as it always as been, is your choice: between taking risk or buying a peace of mind.  When you do decide to get a service contract, just make sure it includes all the essential parts you will need.

[Future Article: Read about: How to choose a right service contract]

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