If your hospital capital budget is frozen, how can you proceed with acquiring the medical equipment you need? MD Buyline, the leader in healthcare supply chain management solutions, provides three financial considerations for hospitals with medical equipment budgeting challenges.

1. Making Your Way Through a Medical Capital Budgeting Freeze

2. The Need for Medical Equipment Acquisitions
Situation
Action
Result
Financial uncertainties in the market today and shrinking margins are making it more challenging than ever for providers to acquire the capital items they need.
Faced with mounting pressure, CFOs have instituted a capital freeze for their facilities to provide relief.
However, with providers relying on technology to compete in the marketplace, these capital freezes can inhibit hospital systems from investing in muchneeded technology.

3. The Good News
>>MD Buyline has seen more vendors be willing to work with hospitals to acquire medical equipment.
For must-have investments, there are opportunitiesin alternative financing options.
Historically, in a time of limited capital and slow medical technology sales, vendors have provided financing in the form of leasing, fee-per-useand discountingoptions (discussed on the following slides).
MD Buyline has seen vendor financing that was provided with little to no interest in order to help move their technology, although the financial risks to the healthcare provider need to be weighed.

4. Leasing
Leasing allows providers to acquire high-end technology with a short technological life expectancy.
There is potential risk when considering the fine print, such as length of term, service fees and buyout clauses.
Over the term of the contract, these additional costs can negate any potential savings seen from limited interest.

5. Fee-per-use
Fee-per-use contracts can also be very attractive in a limited capital environment.
They do not require upfront capital purchase and the length of the contract can be tailored to the user’s needs.
The risk lies in aggressive minimum procedure counts that may not be within reach of the provider and especially to those who own the technology at the end of the term.

6. Discounting
Discounting on capital equipment has also slowly started to increase during the last few years, which has made new technology more affordable.
The risk with this is that vendors may seek other areas to increase their margins, such as service, consumables and licensing agreements.
Because of this, any ROI performed should include all expenses related to the technology, for accurate comparisons.

7. The Bottom Line
Before considering any lease or financing agreement, MD Buyline recommends that you negotiate the capital costs of the technology, service and consumables to the lowest level possible.
Then apply these costs to the financing agreement.
If you are a MD Buyline member, don’t hesitate to contact us and see how we can help you with your technology acquisition.
If you are not a member but are interested, please send an email to info@mdbuyline.comor call 1-800-375-5463.