4 Methods for Managing Medical Equipment Acquisitions in Your Facility

The cost of medical equipment and supplies is the second-largest expenditure in your medical facility’s budget, after labour. At any given time, the average hospital owns or rents over 35,000 different medical devices. Cost management is the bane of many administrators’ existence. On the one hand, medical facilities can only function if their finances are secure. Medical facilities, on the other hand, cannot ethically or legally compromise patient safety. Here are four ways that purchasing medical equipment gives you financial control:

Billing Authority

The best way to navigate the health insurance bureaucracy is to ensure that all billings are accurate and complete. Billing errors can cause a variety of issues, including:

• Publicity that is negative

• Revenue lost as a result of missed charges

• Insurance companies’ refusal to pay bills with obvious errors

All of these issues converge on one unavoidable solution: discounting bills to keep patients, insurance companies, and the general public from labelling your facility as heartless, incompetent, and greedy. This risk is reduced by ensuring that billings are complete and accurate before they are sent. Alaris pumps use coding systems to record and associate each product consumed with the patient’s record. It not only reduces medical errors, but it also makes billing errors nearly impossible because this information is recorded in real-time. In other words, Alaris smart pumps do not rely on transcription of billing entries from handwritten documents or your medical staff’s memories to record billing entries. Rather, Alaris pumps have an optional barcode scanner that captures the patient’s wristband code and the IV infusion code and associates them with one another. This type of automatic record-keeping is critical for reducing or eliminating billing errors, reducing or eliminating medical errors, and creating a paper trail in the event that the facility must dispute whether a billing error or a medical error occurred.

Budgetary Control

Budgetary allocations are frequently handcuffs from which administrators must devise inventive ways to break free. Programs for medical equipment financing and medical equipment rentals provide administrators with a single avenue for acquiring medical equipment while staying within their budget constraints. For example, medical equipment rentals enable administrators with limited capital acquisitions budgets to rent rather than buy. Similarly, medical equipment financing allows administrators to pay for equipment over time, reducing the impact on the capital acquisitions budget. Terms are often flexible with both of these options, allowing the hospital to maintain its financial health without compromising healthcare services.

Taxation Authority

While it may appear morbid for a healthcare administrator to use the old adage, “the only things that cannot be avoided are taxes and death,” unless your facility is a non-profit, tax strategy is frequently one of your considerations when purchasing equipment. The cost of acquiring revenue-generating equipment, such as Alaris pumps, can be divided into two categories. If you buy an Alaris pump, the value of that purchase depreciates over the life of the equipment, and the annual amount of depreciation is tax-deductible. The best strategy for your medical facility is dependent on your specific situation. For example, if an Alaris pump generates a significant amount of revenue, the offset provided by expensing the total rent may significantly reduce your facility’s tax liability more than the depreciation deduction would.

Take Charge of Your Balance Sheet

Medical equipment financing is a type of equipment loan that appears on the balance sheet as a liability. Medical equipment buys, on the other hand, are recorded as an expense on the balance sheet. Depending on your balance sheet and situation, either option may have advantages or disadvantages. Liabilities on your balance sheet, for example, may be interpreted as detrimental to your medical facility’s financial well-being if it is part of a publicly traded corporation or is seeking loans. Purchased equipment, on the other hand, is an asset that contributes to the financial health of your facility, whereas rented equipment is not. The various options for purchasing medical equipment can provide you with control over your facility’s budget, taxes, balance sheet, and billings.