With hospital budgets continually being squeezed, flexible equipment financing is an increasingly attractive option.
“You have hospital departments, radiology departments, that have older CT scanners or MRI scanners, that they know they need to upgrade since they’re eight to 10 years old, but they’re being told the capital budget will be going towards IT … and electronic health records, so you’re just going to have to make that CAT scan system work for another year or two,” said Stephen Jasiukiewicz, vice president healthcare sales, Key Equipment Finance. “And so, leasing or financing tends to be a flexible way to battle that budget issue.”
There are a number of benefits to going the flexible equipment financing route, said Richard Gundling, vice president, healthcare financial practices of the Healthcare Financial Management Association.
“As part of any healthcare organization’s strategic and capital planning process, flexible equipment financing is factored into the decision-making equation,” Gundling said. “Some of the benefits include limited or no cash up front, quicker access to up-to-date equipment/technology, and cash flow management – payments matching to revenue.”
Gundling said flexible equipment financing is most attractive when an organization needs immediate access to new equipment and technology, wants to conserve cash, eliminate risk of owning obsolete assets, wants to upgrade technology easily, and wants to manage their long-term costs (by spreading payments over several years).
“To remain viable, all organizations must make good investment decisions based on objective analysis,” said Gundling.