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Leasing medical equipment assists hospitals in acquiring new technology.

Leasing medical equipment assists hospitals in acquiring new technology.

Medical Equipment Leasing helps Hospitals Aquire New Technology

The lifeblood of healthcare providers is medical technology. They must have tools to improve patient care, and they must have the equipment when the patient requires it, not when the capital budget is free.

Supply chain leaders, risk managers, and CNOs are all aware of this reality, and they frequently have to persuade finance officers of the need for and benefits of acquiring or upgrading equipment, or they must forego having the technology. That is, unless they have access to alternative financing options.

Medical device companies frequently bring new or improved technology to market before the current devices’ expected (budgeted) life expectancy has passed. This timing may cause disagreements with the Chief Financial Officer (CFO) and clinical and supply leadership about budget access and spending priorities.

New or upgraded technology frequently improves care, patient and clinical satisfaction, and aids in staff recruitment and retention, as well as service marketing to attract patients. Although this appears to be a strong justification, upgrading to new technology may not meet the needs of all areas of the healthcare system.

The finance team must balance this against an ever-shrinking working capital budget, as well as strategic projects such as alternative care site acquisition, physician recruitment, and other revenue-generating sources and investments. The old adage “if it ain’t broke, don’t fix it” adds to clinicians’ and device salespeople’s frustrations. However, when it comes to finance, saving money and following the advice of clichés often seems logical.

Finance is also in charge of improving patient care and safety, as well as managing the budget. Patient care is as important to this area’s leaders as it is to clinical and supply chain leaders. Even the most seasoned veterans may find the balancing act difficult. Medical device manufacturers must offer options that meet both clinical and financial strategic objectives.

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The CFOs of the medical device company and the healthcare provider must ensure that there is enough cash available to invest in R&D, operational expenses, or other investment opportunities. The CFO or their team members are responsible for much more than just budget management. Finance executives are frequently in charge of strategic direction, as well as staying up to date on new regulations, customer expectations, and guiding merger and acquisition initiatives. These are some of the reasons why the reins of spending capital funds are frequently tightened and subjected to extensive scrutiny at both the provider and the device companies.

It is not enough to have the best technology and the ability to demonstrate cost savings and patient satisfaction. Many medical device companies provide more than just a purchase option, which can be difficult for the manufacturer’s CFOs to manage. Payment-over-time options entail credit review, approval, and administrative tasks such as billing, collection, title, and tax considerations. Often, the device manufacturer’s CFO will look for independent third-party companies to take on these risks and tasks.

These third-party relationships enable device companies to offer acquisition options in addition to their advanced technology without incurring the costs and risks associated with directly extending terms. However, assuming that any finance provider will provide the solution can backfire. When third-party terms, contracts, and customer service are unfavourable to the customer, it can cast a negative light on the device manufacturer.

Often, forming a partnership with a buy partner who has experience with both the end-user healthcare customer and the medical device industry can provide a solution. They understand the value of device companies’ products and services, as well as the risk of the healthcare provider.

Paxamedical has specialised in serving as a bridge to these diverse and often conflicting needs for nearly three decades. They provide finance options that meet the financial needs of the customers, while the device company aligns with and meets the needs of the clinician and supply chain staff.

They do so with a variety of financing options and frequently customise the terms to meet the needs of each individual customer. Paxamedical can provide private label plans, use agreements, and other innovative solutions that most medical device companies would not consider directly offering.

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