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TECHNOLOGY
Financing investment in medical technology
Keeping pace with technological advancements requires considerable capital expenditure. It is becoming essential for hospitals to seek new and sustainable ways of investing in new technology. Chris Wilkinson reports.
The UK public healthcare sector is experiencing serious pressure to reduce spending. The Government previously announced that public health budgets will be reduced by a further £200m as part of a programme to bring down public debt.1 The NHS has already implemented a number of changes to make savings and improve productivity. The resulting cuts make it increasingly difficult for NHS hospitals to provide the quality of care needed in order to cater for a growing and increasingly ageing society. Official figures released in May 2016 showed that ambulance Trusts, hospitals and other healthcare services in England had a record deficit of £2.45bn in 2015/16.2 Against this background, increasing investment in medical technology and equipment may not seem like sound advice for NHS Trusts. The expected cost of equipment, maintenance and replacement technology may discourage potential investment. Austerity measures have, however, already resulted in the continued use of ageing diagnostic imaging equipment across the EU.3
The long-term costs of using
out-dated equipment for patient diagnosis and treatment can often outweigh the short- term expense of its replacement or upgrade. This is because deferring investment in technology can directly impact productivity and quality of care. Additionally, the gains in efficiency and productivity that can be achieved through the use of modern technology may well more than compensate for the costs of the investment overall. In the long run, new equipment and technology can even help public healthcare providers reduce costs associated with diagnosing and treating patients. With the use
of state-of-the-art medical equipment hospitals can significantly optimise processes; reduce patients’ length of stay and cut down overall surgery duration. Costs for personnel and material usage, as a result, decrease. Patients, moreover, benefit from less invasive therapies, quicker healing and higher overall chances of recovery.4
Public healthcare
providers are therefore looking for financially viable ways to invest in modern equipment in order to realise the benefits of its use. Flexible asset financing methods can help leverage the benefits related to the use of state-of-the-art medical technology and make the acquisition more affordable for public healthcare providers. Solutions such as leasing funding allow for equipment costs
The long-term costs of using out-dated equipment for patient diagnosis and treatment can often outweigh the short-term expense of its replacement or upgrade.
FEBRUARY 2017
to be spread over an agreed period. Financing payments can be arranged to align with the expected benefits of its use, such as enhanced operational efficiency, more accurate diagnosis (and treatment) and improved patient care. This removes the need for a large initial outlay, thereby improving cash flow and working capital. Asset finance can thus give public healthcare institutions access to the latest technologies, while assisting with long-term financial planning and improving standards of care. Increasingly, in some technology categories it is no longer sensible to write down an equipment investment over longer periods (for example, ten years) as significant advances in technology are expected to drive shorter upgrade cycles. This demands hospitals to have a more flexible approach to planning and investment than more traditional ways of equipment acquisition hospitals in order to avoid having to shoulder the costs of equipment long after it has become outdated.
Using innovative medical technology helps public healthcare organisations expand the
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