In today’s post-pandemic environment, hospitals are still encountering numerous financial challenges – including the availability of sufficient capital funding for new medical equipment (medical, lab, and IT purchases). Many hospitals report that the capital needed to fund their “ideal” equipment replacement strategy simply isn’t available, and many facilities don’t anticipate those needs being addressed in the foreseeable future. Amidst the many other challenges hospitals are currently facing, it may be easy to accept this limitation as unfortunate yet inevitable – to cross your fingers, hope your current equipment doesn’t fail, and try to hold out until matters improve. But luckily, there’s another strategy to overcome this problem.
Work with your supplier to identify alternative payment strategies for equipment replacement. Today, a growing number of medical equipment manufacturers offer creative financing options (leases, deferred payments, placement agreements, etc.) to help hospitals fund equipment purchases, even in our current capital-constrained economic environment. This can provide some much-needed budget flexibility in the short term, while still allowing you to deliver on critical purchases of new medical equipment for your hospital. And while not all CFOs are comfortable with some of these creative financing options at first, they may warm to the idea if you can demonstrate their value.
Recently, a Miga hospital client calculated that the total capital needed to fund replacement of all “critical” equipment totaled more than $113 million…when they had only budgeted $23 million in the upcoming fiscal year. However, hospital took advantage of creative financing from several manufacturers (along with accurate benchmarking information), and they were able to fund nearly 85% of the most urgent items from their wish list. After key members of C-suite were convinced of the power of these alternative options, they made it clear that the hospital should plan to repeat this strategy in future years as a way to keep their clinical technology current and deliver the highest quality of patient care possible.