Deciding between OEM and alternative parts
In a post-pandemic healthcare landscape, the cost of care and operation have increased, while we also face labor shortages and other challenges. According to the American Hospital Association, there was a 17.5% increase in overall hospital expenses between 2019 and 2022. And with inflation and other external factors, this economic issue facing hospital systems is likely not going away. This has led many to search for cost-cutting solutions, or at least opportunities to make more of their investments.
It’s not surprising, then, that third-party equipment parts are becoming more common. On the surface, they can be a quick way to save money with a lower-cost part. However, there are longer-term considerations that aren’t always factored in. And yet, the current landscape makes it difficult to look at the long-term impact rather than the short-term decision.
The reality is that decision-makers must weigh the benefits and drawbacks of third-party parts versus the trustworthiness and long-term benefits of OEM parts. In light of this mounting dilemma, here are some key considerations when determining whether to buy parts from the original manufacturer or a third-party provider.
Origin and quality control: Where did the parts come from?
A foundational element of everything from macro supply chain to farm-to-table restaurants is the concept of origin. Do I know where this product comes from, and how much does that matter to me? When it comes to healthcare equipment parts, third-party manufacturers often don’t have a clear story of where their parts came from or how they’re manufactured.
This of course is connected to your relationship with the manufacturer, as with an OEM you likely know a great deal more about the sourcing because of your research and longer-term engagement. However, third-party manufacturers tend to claim to have “clone” parts or “equivalent” parts but don’t provide information on how they produced them to be as similar to the OEM counterpart.
Additionally, even after the product has been manufactured, where is it being stored before it gets to your facility? Improper storage of consumable parts can significantly impact the quality and lifespan of the product, so knowing the entire journey of the part before it arrives is crucial.
Dollars and cents: How much does it cost?
Oftentimes, this is the leading value proposition for a third-party parts supplier. They can “clone” an OEM part to work just as well for a fraction of the cost. And while the sticker price may be cheaper in the short term, there can be hidden costs that aren’t taken into account.
These costs include shipping, service fees, and more, which aren’t accrued until later in the process. This is perhaps the most practical depiction of the importance of considering the long-term cost as opposed to the initial upfront cost.
But it goes beyond just the cost of the part. If the part doesn’t end up having the same lifespan or reliability as a proven OEM part, then you’re back to sourcing more parts, facing increased downtime, as well as increased stress on your staff.
Fulfillment: How quickly can I get it?
Third-party manufacturers may even feel like they deliver on orders more quickly, but that also is often fueled by a desire to close the deal. When it comes to OEMs, the general market perception is that OEMs should always have it.
Even for the parts that have incredibly rare failure rates, OEMs like GE HealthCare still maintain an inventory of parts (or the components necessary to make the parts) for customers. This is not an insignificant investment on the part of OEMs to be ready to serve customers as nimbly as possible.
Service: What kind of support is available?
While a new relationship with a third-party provider might seem easy, an OEM with a long-standing relationship with you is always going to be able to provide better support overall. If you consider the long-term effects of having various parts from different manufacturers, service is going to be more complicated all around, not to mention the process of the provider getting to know you, your needs, and your goals.
Data: Is there a difference in the information provided by the part/equipment?
Manufacturer consistency and standardization is a powerful benefit when it comes to data. Keeping all the parts and equipment in the same ecosystem boosts the data available because all of the parts and equipment work seamlessly together.
Take Tube Watch from GE HealthCare, for example. This proprietary technology helps to predict when imaging tube parts are going to fail, helping to decrease downtime and minimize the unexpected cost associated with replacing an expensive consumable part. However, for this to work, the system needs to have a streamlined ecosystem to pull data and properly apply the technology. No matter how hard a third party tries, they won’t have the proprietary data and system information to align with a program like Tube Watch or others like it.
Assurance: Can the third-party provider certify equivalency?
Much of a third party’s value proposition is that it’s indistinguishable from the OEM part, but much more affordable. However, what you’ll need to confirm is their certification on several key features.
First, is the part being used equivalent to the latest revision of that part from the OEM? GE HealthCare, for example, constantly monitors and works to improve the functionality of the systems, always making updates to make systems work more smoothly. When a part revision can improve the expected life or functional performance, those changes are made, and a new version of the part is available. It’s important to know if the third party can deliver the same proactive consistency.
Also, If a clone part is made, can the third party ensure that the part doesn’t alter the functional performance of the system? Take for example an “aftermarket” tube or collimator. Does the third-party manufacturer certify that the radiation dose the system thinks is being generated is truly what the patient receives? The reality is that an OEM would be the only provider that could confidently certify it to this degree.
Deeper questions to ask
These are all helpful in deciding what parts to source for your healthcare system or department, but while we’re discussing the “long term”, it’s important to examine the bigger picture. What do you want your operation to look like day-to-day? What do you value most when it comes to providing care? Here are some more to answer:
- What’s most important to me in the long term? Many will say that patient care is the most important, in which case you want to minimize risk and deliver the best care possible. That means having the highest quality parts that are proven and backed by a supportive OEM.
- What is the true cost of this decision? Instead of just the sticker price, also consider shipping, installation, service, performance, and lifespan.
- Will this make my clinicians’ and biomeds’ daily workflow easier or more complicated? Next to patient care, streamlined workflows are the most important priority of a hospital system, and you should make the choice that has the lowest impact on your clinicians when it comes to what they need to worry about.
The true value of OEM parts
In summary, in the search for cost-cutting measures, the real question should be more about how to streamline operations and invest in quality parts and equipment. While it may cost more upfront for an OEM part, it will save you in department productivity, uptime, and even morale, not to mention the performance and lifespan of your equipment. These four things are what OEM products provide:
- Compatibility: It’s designed to work with that specific piece of equipment.
- Quality: The OEM has the highest standards, and they also provide the most in-depth service and data for the equipment.
- Availability: Many OEMs will be able to provide parts quickly, but even if they can’t right away, you’re still getting quality parts that will serve you better in the long term.
- Experience: You’re going to be investing in a long-term relationship with your OEM rather than a one-off purchase with the alternate part manufacturer.
When it comes to the bottom line—which is an understandably serious concern for many— it’s always a good investment to minimize operational risk. There are so many questions to answer in the world of third-party providers that it’s best to stick to the quality that you know. Ultimately it’s about the performance of the equipment and how it helps deliver the best care possible for your patients and the best working environment for your staff.
