Finance plays increasing role in procurement of medical equipment

New report from Siemens Financial Services reveals pressure on equipment manufacturers to come up with sustainable financial techniques to enable purchasing of high-value medical equipment

Asset finance tools are becoming increasingly important to enable hospitals to purchase equipment

Finance packages are playing an increasingly-important role in enabling the procurement of high-value medical equipment, according to new research.

A report by Siemens’ Financial Services unit (SFS) shows that, among the global top 40 medical equipment manufacturers, close to 70% of respondents had seen an increasing demand for healthcare equipment finance from their customers over the last two years.

During this period, the proportion of global medical equipment sales financed through asset finance had grown by an average of 6.9% a year. And, more than 60% of respondents believe that finance penetration will continue to rise over the next two years.

Other underlying trends also emerged from the research. Two thirds of respondents reported that their healthcare customers are feeling a squeeze on their capital budgets; 57% reported increasing demand for tailored financing for healthcare organisations to acquire new equipment; and 64% also observed customers’ increasing application of Total Cost of Ownership (TCO) methodologies in equipment acquisition evaluation. This reflects the demand for financing techniques that can embrace other associated costs - installation, service, life-time maintenance, upgrades, etc - over and above the simple cost of initial purchase.

“Using sustainable financing techniques such as asset finance, healthcare organisations can afford essential equipment upgrades and replacement to deliver better diagnoses and improved health outcomes despite budget pressure

“Healthcare organisations around the world are labouring under increasing financial pressures,” said Chris Wilkinson, head of sales for healthcare and public sector for SFS in the UK.

“Constrained budgets, however, should not compromise diagnostic and clinical efficiency and accuracy, which can only be maintained through continuous technology investment.”

The research also reveals growing financial sophistication in global healthcare. Instead of owning medical equipment outright, healthcare organisations across the world are increasingly embracing the notion of ‘cost to use’ that equipment. Respondents expect this development to further fuel demand for financing methods that can help healthcare professionals manage treatment/reimbursement through transparent cost-to-use calculations.

Constrained budgets should not compromise diagnostic and clinical efficiency and accuracy, which can only be maintained through continuous technology investment

Wilkinson said: “Using sustainable financing techniques such as asset finance, healthcare organisations can afford essential equipment upgrades and replacement to deliver better diagnoses and improved health outcomes despite budget pressure.”

The research was conducted by independent organisation, MindMetre Research, among the global top 40 medical equipment manufacturers in spring this year. In each respondent company, multiple interviewees held responsibility either for a region of the, or had a global remit. Respondents were interviewed on their views in relation to recent trends in demand for asset finance from healthcare organisations worldwide, their future projections for this demand, and the country differences in demand for asset finance and its main drivers.

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