Pros and Cons of Different Service and Maintenance Contracts

All-Inclusive Service 

An all-inclusive contract is a very common service and maintenance agreement that is comparable to having an insurance style package for your patient handling equipment in place. Within this contract, all of your assets and services are covered within your policy for a set, monthly figure, for an agreed contract term.

With an all-inclusive, your care facility and your provider will work together to go through the full spectrum of your assets on site to determine their viability for coverage. Your care facility and provider will as well outline the inspections and services included during the term of your contract.

Pros to an All-Inclusive Contract

With an all-inclusive contract your care facility benefits from having peace of mind knowing that your assets are covered. This benefit can also contribute to the reduction of equipment downtime as your service provider will not have to wait on approvals to complete the required work as it arises.

Your facility also has the added benefit of financial security/budget control as you are in the know as to what your costs will be in an all-inclusive contract with no hidden operational costs. With an agreement such as this, your facility can know with confidence that all of your patient handling equipment  will be managed properly.

Cons to an All-Inclusive Contract

With an all-inclusive contact, your supplier must audit the equipment you have on site and consider worst-case scenarios in order to properly project costs of labour and parts should repair or replacement be required. Additionally, and from your suppliers point of view, the equipment your facility has on site needs to be of a certain standard in order for it to be covered and economically viable for repair. This base principle can be a direct cause of paying a higher premium for an all-inclusive contract.

It is also good to note, that typically with an all-inclusive contract, damage to patient handling equipment due to misuse will not covered and can incur your facility additional costs.

Standard Contract

Entering into a standard service and maintenance contract for your patient handling equipment is the most common contract on the market. This agreement allows your care facility to pay for services, replacement and work as and when it is required.

Typically, a standard contract can range from a 1-5 year time frame and during this agreement, you are locking in your agreed upon rates  subject to the terms and conditions.

Pros of a Standard Contract

With a standard service and maintenance contract, the upfront costs can be competitive as you pay solely for work that is completed as and when it is required. The rates your facility will pay depend on the specifics of the item, the type of service you require, the frequency of service, supplementary charges of labour, and your call-out charges. Many care facilities can benefit from cost savings upfront and have certainty around pricing for the duration of the contract.

Cons of a Standard Contract

Although standard contracts can appear quite competitive and affordable upfront, your facility is subject to unpredictable unknown costs that have the potential to cause your facility to go over budget on any given month.

This fact can often times make it difficult for your facility to budget well as some month’s costs may be low and some month’s costs difficult and high.

There can also be timing challenges that arise with a standard contract as your provider will often have to wait for approval from yourself  on work quotations before actioning the servicing of your equipment.

Semi-Inclusive Service and Maintenance Contract

You can think of a semi-inclusive service and maintenance contract as a combination of an all-inclusive and a standard contract. This type of contract is typically tailored to your requirements, e.g. you  may decide whether all your equipment parts are included but pay for labour as it is required, alternatively, you can choose to have all labour included and pay for parts as and when required. Furthermore, with a semi-inclusive service and maintenance contract, you will agree with your provider up to a certain value of service and maintenance that will be covered to keep you in compliance. Once your service and maintenance costs go over that threshold of your monthly premium, you will then begin to pay for those additional costs. The pros and cons to a semi-inclusive contract are very similar to the previous mentioned contracts of both the all-inclusive and standard contract and is dependent upon which elements of coverage you select.

Pros to a Semi-Inclusive Contract

With a semi-inclusive contract, you will benefit from having some budget control as your care facility will only pay additional costs when your service and maintenance charges goes past your premium level. Your facility may also find the cost of a semi-inclusive contract to be an affordable option for your facility.

Cons to a Semi-Inclusive Contract

With a semi-inclusive contract, you and your supplier will need to manage the tracking of spend on your account which will require an extra amount of admin and attention to detail when it comes to your monthly costs.

Read Our Article: 6 Benefits of Using One Supplier for the Service and Maintenance of Your Patient Handling Equipment 

Rolling Contract

When you are in the duration of a service and maintenance contract agreement, unless you cancel or renew your agreement, your contract will likely become a “rolling contract”. What this means is your contract will be ongoing and your care facility will retain the terms and conditions of the initial contract. However, it is good to know that your service and maintenance provider can potentially raise your rates at very short notice.

What to Look Out For

For all contracts, there are benefits for both the supplier and your care facility. Longer agreements offer you as the customer peace of mind over your assets. For the supplier, the longevity of the contract allows them to both plan the workload efficiently and better service your facility. With a short-term contract, your facility benefits from the flexibility to move providers should your partnership not best serve you, however with a short-term contract, you must be diligent in reviewing your contracts costs and terms on an ongoing basis as they can change at short notice.

With any contract it is important that you are doing your due diligence before hand to clearly understand your facility’s requirements in regards to your service and maintenance needs, the inspections your equipment requires, and the fleet  of assets you have on site. It is good practice to have clarity on what your clear deliverables are – for example, do you seek quick call-out times? Do you need both your beds and your mattresses serviced? These two differentiated assets are often missed.

We’ve Created a How to Compare Supplier Quotes for Service and Maintenance Providers Resource [Checklist and Details] Here

When it comes to the service and maintenance contracts available for your patient handling equipment, there are endless options that can be specially tailored to your care facility’s needs. Here at Medaco, we understand that your facility and assets are unique, and we work with care homes, special schools and NHS trusts to help clarify which contract will work best for your requirements. If you have further questions about what type of contract will best suit your facility, get in touch with Medaco, we are available nationwide to help.