Category Archives: Cost

$24,000 Charge to Make a Service Call? Before The Work Even Starts!

Did you hear the latest way that some manufacturers are trying to embezzle money from the hospital?  How they are forcing them to sign service contracts that they don’t want and don’t need?

They refuse to sell the hospital ANY PART to the unit unless there is a service contract in place.  And if the company is required to make a service call, they charge $6,000 just to drive to the hospital’s front door!  (A different company allegedly charges $24,000 just to show up.)

I hospital I know needed a caster (a wheel) for an imaging machine.  They tried to purchase one.  The manufacturer stood firm and would not sell them one.  So the hospital had no choice but to have the manufacturer come in and make the replacement.  True to their word, the manufacturer (which is based in another country, not the United States) charged them $6,000 just to come to the hospital.  The cost of the caster and the labor were extra.

This is apparently legal.  This is just the latest tactic for unscrupulous companies to abuse the United States’ healthcare system by forcing them to make financially disastrous choices, or be faced with even more devastating consequences.  This is no more than blackmail or extortion, in my opinion.

 

I urge hospitals to identify these companies and to cease to do business with them.  If the President is serious about improving things in this country, he should champion legislation to make the access to repair parts and medical device service affordable and without the artificially imposed policies that these companies use to suck American dollars to their foreign corporate headquarters.  And pays little or no US taxes.

Advertisements

Leave a comment

Filed under Cost, Parts Dirt, Service Dirt

Here is the GE Letter about Software Sale

GE Healthcare Software Terms of Non-Resale

Leave a comment

August 19, 2016 · 12:18 pm

GE Letter Declares “Non-Base” Software Options Non-Transferable

Posted by Josh Block

Aug 3, 2016 12:00:00 PM

Over the last 30 days, third-party imaging equipment and service providers around the world have received copies of a letter from GE Healthcare notifying them of an unprecedented move to restrict sellers from including “non-base” software options with the sale of a previously-owned GE imaging system.

What the Letter Says

The core premise of this move is summed up in the letter as follows:

“Please be aware, unless otherwise explicitly stated by GE Healthcare in writing, software that is not part of the equipment’s base system standard operating software is non-transferable and only the original equipment purchaser has a non-exclusive, limited license to use such software.”

Who It Affects

At first glance, this move seems to be aimed at restricting competition within the refurbished equipment space- certainly an understandable goal as GE looks to grow equipment and service market share.

Far beyond independent refurbishment providers and their ability to provide useful software options in an economically feasible manner, however, there are several other parties who will be deeply impacted by this seismic shift:

  1. Everyone who owns a GE system:  Whether a hospital, imaging center, or ISO, the inability to sell (or trade-in) equipment with “non-base” software options decreases equipment resale values significantly and immediately.
  1. Finance institutions: For banks holding the paper on a capital or operating lease, the residual value of those agreements just dropped in noteworthy fashion.
  1. GE customers: The equipment being purchased today will include software that is non-salable or transferable.
  1. Patients: If a facility has purchased a system with ASIR, GE’s radition dose reduction technology, from a refurbished service provider and was unable to afford the $100,000+ option, the option would need to be deleted from the system and patients would begin receiving significantly higher radiation doses on a system that was once fully equipped to reduce dosage.

Who Wins

While it’s evident there are some less-than-desirable outcomes for quite a few stakeholders within the GE imaging space, it’s important to ask, “Who wins?”

  1. GE: For customers who only buy GE equipment, the opportunity is certainly present to capitalize on the sale of new equipment. There is a strong chance as well that GE will see a big short-term gain for sale of software to customers that need to replace options that have been removed. The GE Goldseal Refurbisment program will also be able to buy back equipment at greatly-reduced values.
  1. Siemens, Philips, and Toshiba: One has to imagine that carrying such a letter into a competitive sales situation demonstrating the reduced resale value of a GE system would provide a pretty meaningful benefit.

The Takeaway

There’s no question that software has proprietary elements and that the investment and creativity involved with imaging applications are to be applauded and compensated. That being said, in this time and marketplace, this move is certainly a head turner, especially given the significant price already paid for the intellectual property by the initial purchaser.

Block Imaging looks forward to attending the IAMERS European meeting to hear more from GE on the intent and immediate implications of this action. Furthermore, we look forward to hearing and providing additional information to bring more clarity on this matter to the imaging industry and customers around the world.

…………………….

Written by Josh Block

Josh Block is the President of Block Imaging. He is also a husband, father of two, triathlete and self-proclaimed waffle chef.  Josh strives to live out his passion for people by investing in and aligning the Block Imaging team to deliver a noteworthy customer experience and impact lives around the world through providing outstanding refurbished equipment, service, and parts.

Leave a comment

Filed under Cost, software

Medtronic’s CEO Made a Ton of Money Last Year

Posted in Medical Device Business by Chris Newmarker on July 27, 2015

Much of Omar Ishrak’s $39.5 million in compensation was related to Medtronic’s $48 billion merger with Covidien.

Medtronic Omar Ishrak
Medtronic CEO Omar Ishrak

Chris Newmarker

Total compensation for Medtronic CEO Omar Ishrak skyrocketed to a whopping $39.5 million for the company’s fiscal year ended April 24, according to Medtronic’s recently filed proxy statement with the SEC.

The $39.5 million amount would make him one of the highest paid CEOs in the medical device industry. About $25.6 million of the compensation, though, was mostly to help Ishrak pay for the special U.S. excise taxes he and other top Medtronic executives personally owed after the January closing of Medtronic’s $48 billion acquisition of Covidien. (Here’s a timeline of the deal.)

Such excise taxes came on top of capital gains taxes that Ishrak and all other existing Medtronic shareholders owed after the deal had them swapping the old Medtronic stock for stock in the new Medtronic plc, said Medtronic spokesman Fernando Vivanco.

“They also have to pay their capital gains tax like every other shareholder does,” Vivanco said of the senior leadership.

The acquisition allowed Medtronic to move its official headquarters from Minnesota to Ireland, saving money on U.S. taxes over the long-term. Many companies involved in such inversion deals have justified tax reimbursements to top executives because the excise taxes would otherwise penalize the executives for pursuing a strategy that financially benefitted the company.

Medtronic says in its proxy statement: “The payments are required to neutralize the effect of the excise tax so that [named executive officers] were neither harmed by, nor benefited from, the transaction.”

That didn’t stop long-time shareholders, including some among the companies’ earliest employees, from giving Ishrak an earful during the company’s annual meeting in August 2014. Ishrak responded that he understood the shareholders’ pain over the capital gains taxes they needed to pay. A shareholder lawsuit was filed in federal court over the compensation plan, but a U.S. District Judge in Minnesota declined to issue an injunction in December, according to the Star Tribune of Minneapolis.

Ishrak’s $39.5 million in total compensation handily exceeded what most other top medtech CEOs received in their company’s most recent fiscal years. That included $25.0 million for Johnson & Johnson CEO Alex Gorsky, $9.1 million for Stryker CEO Kevin Lobo, $10.5 million for Boston Scientific CEO Michael Mahoney, and $10.2 million for St. Jude Medical CEO Daniel Starks.

Total compensation for Ishrak was $9 million for the 2013 fiscal year and $12 million for the 2014 fiscal year.

Ishrak’s salary rose slightly to $1.5 million in 2015. The salary was more in line with Ishrak’s peers such as Gorsky ($1.5 million), Lobo ($1.1 million), Mahoney ($921,302), and Starks ($1.1 million).

For fiscal year 2015, Ishrak also received nearly $3.5 million in stock awards, $3.1 million in option awards, $5.6 million in non-equity incentive plan compensation, and $192,470 in changes to the value of his pension.

Ishrak is often cited as a top CEO in the medical device industry. Qmed readers picked him as best medtech CEO in a survey last month.

Leave a comment

Filed under Cost

10 Corporations that are not paying their fair share (includes GE)

Bernie-Sanders-Corporate-Tax-4001

Leave a comment

May 12, 2015 · 2:09 pm

Apple Watch is Based on “Planned Obsolescence”

Company breaks open Apple Watch to discover what it says is ‘planned obsolescence’

Tech website iFixit found that Apple had ensured that the technology would eventually fall out of use, forcing customers to buy new products

Jamie Campbell

Saturday 25 April 2015

Tech repair and upgrade website iFixit has claimed that the Apple Watch won’t be a long term option for those hoping to continually upgrade their device.

CEO Kyle Wiens has always been a vocal critic of Apple’s obstructive policies on third parties fixing and upgrading iOS devices and his company provide an online “free repair guide for everything” where methods to repair or improve electronic devices are posted.

Upon the release of the Apple Watch, Wiens’ company immediately got down to the business of (iBuffs look away now) tearing the brand new product open and evaluating it from the inside.

Their prying work has discovered that the “overall device construction limits further repair options”.

“The S1 SiP [internal system in package] is encased in resin, and is further held in place by a mess of glue and soldered ribbon connectors. In short, basic component replacements look nearly impossible.”

The s1SiP is custom-designed Apple technology that integrates a number of subsystems like the chip into one package. It is encased in resin to increase its durability.

Read more:
iFixit: A million little pieces
Apple watch goes on sale
Apple watch: First version unlikely to be a measure of success

Therefore, according to iFixit, the Apple Watch has intentional obsolescence built into it as it will become technologically redundant as processors become faster and apps are supported only by the newest models.

This tactic is known as ‘planned obsolescence’ and has been an accusation levelled at Apple for a number of years.

The current operating system for iPhones, for example, only supports some of the newer models and it appears that the Apple Watch will find itself in a similar position.

This revelation may trouble users, who will have paid £479 for the standard model or even up to £9,500 if they bought the 18-Carat Rose Gold Case edition.

The exploratory work by iFixit revealed that the device includes a 2-5mAh battery, compared to a 300mAh battery found in competing devices, like the Motorola Moto 360 and Samsung Gear Live. The device also includes an ARM Cortex mj3-based touchscreen controller.

The research also interestingly found that, although Apple has promoted the device’s heart rate monitoring feature, it is actually bundled with a plethysmograph that could act as a pulse oximeter. This could allow users to measure their own blood oxygen levels.

Apple has never commented on claims that this is policy that they pursue.

Leave a comment

Filed under Cost, Information, Service Dirt

Ortho Clinical Diagnostics – outrageous charges?

I recently was sent a letter from Ortho Clinical Diagnostics by a friend in a hospital.  I publish it below, with my highlighting.  It is a glaring example of how a company can use obscenely high charges to pressure customers into signing a service contract.  I’ve had problems with Ortho’s customer service and pricing for many years.  I guess they haven’t changed.

To summarize, they say in the first sentence that the purpose of this letter is to encourage customers into signing contracts.They profess LIMITED TECHNICAL SUPPORT over the phone, but even that is at prevailing labor rates – up to $1,580 per hour, with a 2 hour minimum.  So a 10 minute phone call is going to cost a hospital between $1,580 and $3,160!

Zone charges are $1,530 per trip. without regard to how far they must travel, or haw long it takes them.  A trip across town would incur a $1,530 charge!

Adding the minimum labor, the minimum charge for an onsite visit would be $3,110, even if the service engineer were across the street.

I believe that these charges and rates are flagrant attempts to place undue pressure on hospitals to sign contracts,which themselves are very lucrative for the company.

Please factor these after-purchase costs in when deciding which medical equipment to purchase.                          Pat Lynch

Ortho Rate Sheet

Leave a comment

Filed under Cost, Service Dirt