For hospitals, aged care centres and other healthcare facilities, medical equipment is one of the biggest expenditure items. Not only does it require a significant outlay to buy, but maintenance and cleaning costs all add up. As do repairs when equipment gets damaged and becomes unserviceable.
That’s why leasing is an attractive option for many healthcare operators. With some equipment suppliers offering generous lease terms and extra perks (such as ongoing maintenance programs), leasing can make a lot of sense. That being said, buying medical equipment may be a more serviceable option for certain equipment that has longer life cycles and needs less maintenance.
Getting it right is important - just a few weeks ago, a hospital in Melbourne had to cancel hundreds of patient procedures due to breakdown of two surgical equipment washing machines. It came to light afterward that the machines were outside their serviceable lifecycle, and should have been replaced years earlier. Whether a funding issue, or breakdown in maintenance and replacement policy, the end result is patients are negatively affected.
Let’s take a closer look at the biggest considerations of leasing and buying healthcare equipment.
Budget and cash flow
It’s no secret that buying medical equipment requires a sizeable capital investment. Equipment costing includes not just the initial purchase cost, but also maintenance and repair cost, depreciation and replacement cost.
The advantage of buying equipment means right of ownership that makes it part of the facility’s capital assets. Depending on the financial landscape of the facility, this can tip the scales in the favour of buying, especially for hospitals and larger organisations that get government or public funding.
However, smaller privately funded facilities may prefer to lower costs and keep their cash flow more fluid by opting for leasing agreements. Another advantage of leasing equipment is that the initial capital expenditure is eliminated, as is the need to pay capital gains tax.
Quality and patient care
One of the most important considerations when it comes to leasing vs buying is how fast the equipment will be outdated. Medical facilities are always looking for ways to improve patient care, and providing the best equipment is part of maintaining a high quality of care.
Diagnostic equipment in particular is regularly updated, often making last year’s equipment purchase obsolete. Equipment such as beds, mattresses, and chairs can also bear the brunt of lots of wear and tear, shortening their lifecycle.
Leasing offers the flexibility to replace old or damaged equipment with a newer version on a year-to-year basis. So the questions you need to be asking here are -
“How quickly will this equipment get outdated?’’
“What is its useable lifecycle?’’
“How often will this equipment be used by patients?’
Maintenance, cleaning and repair
As previously mentioned, healthcare equipment can undergo some pretty rough treatment. Facilities need to ensure robust maintenance, cleaning and repair programs are in place to prolong equipment lifespan, and also protect patient safety.
At Keystone Healthcare, we offer a maintenance and repair service to our leasing clients that takes the burden off their own staff. Not only does this help our healthcare clients, but it also allows us to ensure equipment is properly maintained.
We also offer a regular cleaning service for the same reason.
For specialist equipment it is also important to ensure equipment is quality tested and is safe for staff and patients to utilise. This has the potential to positively contribute to ongoing quality accreditation for hospitals.
The choice to lease or buy equipment ultimately depends on what you can afford, how fast the equipment will be superseded by a newer version, and the value of outsourcing services like cleaning, maintenance and testing.
If you can easily afford to buy the equipment outright, there are many types of equipment that become valuable assets. But if buying puts your facility under strain or risk for any of the reasons highlighted in this article, you may want to consider leasing.
For over 10 years, Keystone Healthcare have been providing a wide range of high quality safety equipment to facilities in and around Melbourne on both a lease or purchase arrangement. If you’d like to discuss which option might be best for your facility, our knowledgeable and friendly staff would love to help advise you of the best option for your circumstances.
Give us a call on 1300 547 877 to discuss your facility’s needs.