Facts About Renting Medical Equipment

By Lila Bryant


Medical facilities are faced with one of the most expensive and somehow sophisticated equipment investments. In order to have a significant impact on their clients, individuals and institutions that are engaged in practicing medical services are faced with the need of procuring the latest and state of the art equipment. However, with all this investment, the very tools are quickly rendered obsolete by the passage of time and the ever changing technology. It is therefore important and necessary to thoroughly analyze each and every investment decision in order to realize the most economical use of the scarce financial resources. This particularly entails a close comparison between making a purchase and renting medical equipment.

It is possible to finance your medical facility 100 percent by renting tools. Some of the medical implements offered for rental include; X-ray and ultrasound machines, surgery items, MRI machines, computers, imaging diagnostic tools and EMR software. There are however some considerations to be made before settling on the rental decision.

First and foremost, closely analyze the financial implications of both a buy and rent decision. This is the surest way to enhance the most effective financial decision. It entails the prices of the concerned products across various major manufacturers and dealers while comparing with lease quotes from the medical leasing companies.

But to enhance an inclusive financial analysis, be sure to collect all your pertinent financial data at your disposal. It is this information that will enable you to analyze and evaluate the feasibility of a particular investment. Determine the incremental cash flows (additional revenues and expenses) resulting from the investment. Incremental analysis will illustrate how a particular investment is going to improve the overall business performance, as opposed to simply analyzing whether or not a single portfolio will generate profit on its own or not.

The comparison should however not stop here. Further analyze the data with a break even analysis, a net present value analysis and a payback value analysis. With these analyses, you are furnished with both the short and long term financial implications of the particular investment. It also denotes the duration of time it will take to recoup the initial investment.

However, it is worth considering that the cost of renting is, to a better extent, determined by the rate of the lease. It is therefore necessary to put in mind the factors influencing medical equipment lease rates. One such vital factor is the period of the lease. Before making the decision to rent, ascertain the period you are going to rent the equipment and evaluate the financial implications.

The frequency of repair of the concerned item must also be considered, together with the kind of lease to be adopted. The service schedule (the frequency and convenience of repair) of the tool ought to be put in mind. A good deal should entail fewer repairs, with the service being undertaken on-site. Leases can also be classified as capital and operating. Capital leases have capital allowances, with residual ownership of the equipment while, operating leases are purely rental agreements. As such, capital leases are relatively expensive.

Simply put, the decision process whether to rent or buy a medical equipment relies more on ascertaining which option will be more beneficial to your practice; the bottom line; evaluate how the investment fits with your general business plan, compare it to alternative opportunities in your practice and determine whether it will be profitable on its own while improving the present and future overall financial performance of your practice.




About the Author:



No comments:

Post a Comment