Urgent Care Medical Equipment: Get the Most Bang for Your Buck
Urgent care owners and operators are often faced with a dilemma when it comes to medical equipment. Should you buy or lease equipment, and should you get new or refurbished equipment? Analyzing the pros and cons of each option can help you stretch your dollar and make the best decision for your practice.
New vs. Refurbished
While it’s always nice to have the latest and greatest models of equipment, not everyone can afford it. If you want to own your equipment instead of leasing it, refurbished pieces offer a cheaper alternative.
“Refurbished is the best way to get the biggest bang for your buck, especially if you’re a new center that’s just starting out,” Bruce Latourelle, Regional Sales Director at Soma Technology, says. “You can get the equipment you need at a savings of 40-80% off list price of new unit pricing.”
Latourelle advises urgent care owners and operators to buy any basic equipment refurbished, instead of new. Equipment like lighting, cardiac monitors and defibrillators are great refurbished options for an urgent care setting.
“Take an EKG machine for example – that technology has been around for many years, and new machine will cost you almost $8,000!” Latourelle says. “But you can get one from the refurbished market starting for only around $1,000.”
Sometimes, you’ll have to bite the bullet and buy the newest, latest piece of equipment, but Latourelle offers ways to help offset that cost. A piece of equipment like a C-arm will end up paying for itself after just a few uses.
“The procedures typically performed on a C-arm have a great pay back and great reimbursements from Medicare and insurance companies,” Latourelle explains. “If you’re paying $2,500/month for a C-arm, but you’re getting anywhere from between $250 and $1500 per procedure, and you’re doing five procedures a day, you can see how that cash flow is going to help a center be more successful in acquiring new or different equipment.”
If you own multiple centers, and have providers and staff rotating through the various clinics, Latourelle says that refurbished equipment is the best way to go.
“There’s plenty of equipment out there, so you can go with an item that would be the same at every facility so that your staff doesn’t have to worry about trying to get trained on different models and pieces of equipment at each location,” Latourelle says.
Companies that have seen refurbishing sales take off have started having their own models come back, according to Latourelle.
“Those older models will be cheaper than new coming directly from the manufacturer, as they try to break into the refurbishing market,” Latourelle says.
When purchasing urgent care medical equipment, center owners/operators have a few different payment and financing options: buy, lease, or lease-to own.
“If you finance and lease-to-own, you can get tax benefits that can offset your costs and get an increase for your income to make you more successful,” Latourelle says.
“The IRS does not consider certain leases to be a purchase, but rather a tax deductible overhead expense,” Scott Daugherty for HealthLeaders Media says in his article: 12 Benefits of Leasing Equipment. “Therefore, medical practices can deduct the lease payments from income, thus reducing the net cost of the lease.”
Latourelle says that if you plan on leasing a piece of equipment, it would be better just to purchase it. However, that may not always be the best move.
“If you just add up the monthly lease payments over the lease term and compare that to the purchase price, you might think it would never make sense to lease,” Drew Haynes, EA, CHBC says in his Medical Economics article: Medical equipment: Should practices buy or lease? “However, what you must consider is that repair and maintenance costs come out of your practice’s cash flow when you purchase. If you anticipate that there could be some costly repairs in the future, leasing may be the right choice.”
If you’re unsure of how much you’ll utilize a piece of equipment, Latourelle says you can rent equipment for a short period of time.
“The ideal length of time to rent a piece of equipment would be about one or two months,” Latourelle says. “Rent it for a month, see if it fits your needs, and if it doesn’t, you’ve only paid one month’s rent. If you decide you want to keep it, you can then pay for it in full, or go through a financing company and then pay it off over a longer period of time.”
Lease-to-own is an ideal option that reputable equipment companies will offer. Latourelle says this is a great option to utilize if an expensive piece of equipment breaks.
“Say you had a C-arm that had an electrical faulture, and it’s totally destroyed,” Latourelle says. “You need another one, but you just can’t afford it right now. You’re a good candidate for lease-to-own.”
Before making a decision, Latourelle says it’s important to do your homework.
“Like used car financers, these medical equipment vendors could hit you with a high interest rate,” Latourelle warns. “Don’t take the first offer; shop around.”
“It boils down to analyzing your financial situation and weighing the pros and cons of both leasing and purchasing,” Haynes says. “Take some time at the outset to learn how each scenario could play out. The best decision you can make is an educated one.”
Bundling and brand names
Buying all of your equipment or multiple pieces of equipment from the same company can save you time, money and effort.
“You can find 900 different items in one urgent care facility, and if you get them from 900 different vendors, that is way too much work,” Latourelle says. “If you stick with one company, you may get the benefit of preferred pricing, as well as engineering, installation and other free services.”
Bundling for the sake of installation and engineering services can be well worth it.
“When you purchase from a good company, your equipment will come with the engineering background for what needs to get done,” Latourelle says. “When installing heavy equipment, you don’t want just anyone with a pocket calculator trying to figure things out. You want an engineer that knows how things will affect the structure of the building.”
Brand names and brand loyalty are two more things to take into consideration when purchasing new or refurbished equipment.
“When you’re dealing with refurbished equipment, go with a name brand,” Latourelle advises. “Stick with a company you know. There will be a lot of people out there that know how to work on those pieces, a wide general knowledge base and a lot of available parts in case something goes wrong.”
Brand loyalty can be a good thing when it comes to bundling equipment together, but sometimes it can be difficult, according to Latourelle.
If you only like certain elements of one brand of equipment, finding exactly what you want becomes complicated. However, Latourelle says the refurbishing companies can help with that.
“You can find a refurbishing company that supplies products from different brands,” Latourelle says. “Then you can mix and match the combinations you want, without the hassle of going back and forth between different vendors.”
Latourelle even says you can customize combinations of old and new equipment.
“When you talk with an equipment vendor, they’re going to try to sell you the newest product,” Latourelle says. “While you may want or need a piece that’s brand new, you can still save money by combining them with refurbished pieces.”
Certification and accountability
The word ‘refurbished’ often comes with a negative connotation and stigma attached to it, so some people may be hesitate to go this route, even though it can save them a lot of money.
When going the refurbished route, it’s important to make sure you’re dealing with a reputable company.
“See if they offer a tour of the facility, if they’re ISO certified and if they’re a member of a GPO,” Latourelle advises. “Check and see if the company actually has a store front, and that they’re not just someone selling equipment out of their garage or storage shed.”
Latourelle says that certification is a big deal.
“ISO-certification shows that their processes and procedures have been validated by an outside engineering source,” Latourelle says. “You should also see if they have a vetting process; that will be strong indicator of what a company has gone though to be able to sell their products.”
In addition, Latourelle also advises buyers to be smart when considering buying from Ebay.
“You are purchasing an item that the FDA required that has to go through years of testing in order to be used on patients, and then you have someone selling it on EBay,” Latourelle says. “For many items, there’s no guarantee, no warranty and no quality control behind it.”
Overall, the best thing urgent care center owners/operators can do is weigh their options and shop around for the best deals, but don’t be afraid to buy used! Refurbished equipment and lease-to-own options can help you get the items you need and get you the most bang for your buck.
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