maintain, fails more often and impairs a hospital’s ability to deliver high quality patient outcomes. Conversely, newer equipment and technology enables healthcare providers to reduce operating costs due to lower expenses for equipment maintenance and, through increased utilisation, decrease the ‘cost per patient’. Modern scanning equipment and technology also allow for greater throughput, which means more patients are scanned per day and waiting lists are shortened. The financial benefits alone that result

from early, accurate diagnosis are widely recognised as far outweighing the cost of treating a lifetime of ill health. Escalation of future costs as healthcare demand grows – the result of an ageing demographic along with chronic conditions arising from lifestyle habits that tend to accompany growing prosperity - can be reduced. Early, effective diagnosis can radically reduce: lifetime chronic treatment costs; expensive invasive surgery and other procedures; and wasted therapies resulting from diagnostic errors or inaccuracies. The use of up-to-date machines enables more targeted treatments, with fewer and less severe side effects and higher treatment success rates.9 Most importantly, it can save lives and create a more healthy society. At the cutting edge of diagnostic technology, exciting developments are currently in progress with super-magnet

imaging that will have a particular impact on neurologic and oncological diagnosis and research.10

Smart software developments are also appearing on the market, which allow, for instance, rapid set-up change so that research imaging happens at night while therapeutic diagnostics operates through the same unit during daytime patient hours.11 And yet, healthcare equipment spending in most countries is estimated to be only a small proportion – around 5% – of total cost of healthcare delivery. Keeping pace with technological advancements requires considerable capital expenditure and therefore acquiring the latest healthcare technology may seem out of reach for many healthcare providers.

Sustainable ways to acquire technology

In line with the severity of problems posed by aging demographics, private healthcare clinics face a similar level of concern over the challenge of accessing sufficient funds in a capital-constrained environment. Taxation-derived capital budgets are less and less equipped to fund necessary investments in technology as demands for healthcare access and quality rise. Against the background of limited availability of traditional sources of funding, however, equipment acquisitions and upgrades have become difficult for many healthcare providers. As a result, sustainable and affordable

It is widely attested that equipment age and sophistication are important because ultimately these factors underpin the quality of services and drive improved patient care.

MAY 2019

ways have to be found to acquire the necessary technology. Healthcare CFOs are drawing on a wide range of financing sources and techniques to maximise their access to finance and to find the most appropriate financing solution for their particular needs. This contrasts with the former position where hospitals and clinics used to be primarily reliant on tax-derived capital budgets or traditional loans.

Arrangements can also include the option to upgrade to newer, more efficient equipment, enabling healthcare providers to harness technological advances to improve patient outcomes. Such a package can, for instance, take the form of an operating lease that allows for use of a machine without transferring all of the risks of ownership to a hospital, with payments being allocated to a hospital’s revenue budgets. Alternatively, under a finance lease the financier purchases and owns the diagnostic imaging equipment and leases it to the hospital. During the agreed term, the cost of the machine, interest and charges are paid by the hospital via regular payments tailored to suit their cash flow. A finance lease also enables upgrades during the contractual term. Furthermore, expected maintenance costs for the leased equipment can be added to the lease rentals thus facilitating appropriate maintenance. Providing a total payment for both equipment and maintenance, this increases transparency of Total Cost of Ownership (TCO). Alongside leasing, other sophisticated financing solutions are coming to the fore. More specifically, over the last few years, there has been a significant growth in the availability of and interest in the idea of paying for business outcomes, rather than paying to use the technology that the acquirer believes will produce beneficial outcomes.


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