The cost of acquiring brand-new medical equipment is often too great for medical institutions to shoulder, even with financing options for direct purchases. Fortunately, there is a sound alternative for small hospitals and practices that need medical equipment but have limited capital resources and cannot afford to buy them: healthcare equipment leasing.
Buying equipment offers benefits like warranty privileges, post-sales services, access to new technology, and insurance claims perks. But while it is understandable for an institution to aim for equipment ownership, there are situations when renting is the wiser choice.
Here are a few of the times when renting might just benefit medical practices and hospitals more:
When Hospitals Want to Raise the Quality of Their Healthcare Services with New Equipment but Have a Limited Budget
Hospitals are duty-bound to provide the best possible services to their patients. Part of that responsibility is to obtain modern, high-quality, and high-performing medical equipment.
The accuracy of diagnostic tests, timely discovery of results, and efficacy of the treatment are highly dependent on the reliability of medical tools and equipment, after all. If hospital revenues are insufficient and financing is still an expensive option, leasing is the best answer.
When Hospitals Need to Modernize & Take Advantage of the Latest Medical Equipment Technology While Keeping Costs Low
The upfront costs for medical equipment leasing are significantly less than the lump sum payment required for new equipment acquisitions. Monthly rental fees are also lower than loan repayment rates for direct-purchase medical equipment financing.
Moreover, renting saves practices and small hospitals from the double burden of paying for the maintenance and other scheduled services while paying off the equipment itself. Leasing is, therefore, more feasible if hospitals need to manage their cash flows and allocate liquid resources over a broad scope of needs (e.g., utilities, salaries, supplies, and operational costs).
When Hospitals Want to Protect Their Financial Health from Potential Losses by Upgrading Old & Obsolete Medical Equipment
Medical technology evolves, and its pace keeps getting faster. A brand-new piece of equipment today could be considered outdated in just two or three years. If a hospital buys it, the institution may be forced to maximize and keep using the equipment even though newer and more efficient versions are available, which, in effect, can also limit the medical personnel’s ability to provide top-notch healthcare services.
However, when your leased equipment begins to deteriorate or if new technology becomes available, hospitals can switch to newer equipment without suffering massive financial losses through their medical equipment leasing.
When Hospitals Need the Flexibility to Grow & Improve Their Practice & Their Medical Equipment Over Time
The affordability of leasing equipment and paying only for the duration of their use makes it easier for hospitals to scale and upgrade according to their need and financial capacity. This can help bottom lines, clients care, and credit availability all while helping practices grow and succeed.
When Hospitals Aim to Own Medical Equipment at a More Affordable or Staggered Payment Plan
This is one of the perks that lessors offer to customers in the medical field and a benefit that medical institutions can take advantage of. There are diagnostic and testing equipment, for example, with mature technologies or are ingrained in standardized workflows that it is unlikely for hospitals to change them soon.
Once the terms of the lease are fulfilled (e.g., the institution has rented the equipment for x number of years without violating agreement rules), the hospital can gain full ownership and reap the returns on their investment.
Regents Capital is Here for Your Medical Equipment Needs
These scenarios are all good reasons to lease medical equipment instead of purchasing them. If you need more information to support your medical practices’ financial decision on leasing or owning, Regents Capital would be happy to help!