Aging Equipment Maintenance Costs – Part 2
Last week we discussed the life cycle of aging equipment and associated costs including new equipment and equipment that is only a few years old. This week we will finish out the life cycle with mature equipment, as well as extending the life of equipment and the costs associated with both.
As equipment begins to mature, it’s no surprise that end users start experiencing more issues and as a result, maintenance costs steadily increase.
A common question is–
Why do I have to pay more for maintenance for my older equipment? Shouldn’t it be cheaper?
In fact, equipment costs, much like healthcare costs increase with age. It’s simply because sourcing parts and locating trained technicians becomes more challenging…again, think supply/demand.
- Remi’s research shows that some facilities impose guidelines that help them manage their mix of newer equipment versus older equipment:
- Ideally 60 percent of equipment should be less than five years old
- 30 percent of equipment between six and 10 years old
- 10 percent greater than 10 years old
Of course, this is just a general guideline and organizations can vary on how they handle aging equipment.
Escalator Clause: Another important factor when thinking about aging equipment is whether your equipment maintenance contracts contains an escalator clause (which Remi does not include). This clause basically increases pricing up to 3-5% each year as equipment ages.
Extending the Life of Equipment:
Even though equipment ages, it shouldn’t be counted out. Extending the life of equipment after end-of life or end-of-service-life by the OEM doesn’t mean you need to rush in and buy new. If you want to learn more about end-of-life or end-of-service-life, check out our blog series that addresses the topic.
In many cases, Remi can identify technicians and parts to be able to maintain the equipment several years after equipment has been deemed end-of-life by the manufacturer. So, while the equipment maintenance may be slightly more expensive in the later years of life, it is still can be more cost effective than purchasing new.
Tell us what you think about this blog post. Are you paying more for your aging equipment due to an escalator clause? Comment below.
This blog was also published on AHA Service Guiding Healthcare Solutions.