When to Replace Medical Equipment

For over 25 years, Anesthesia Plus has been providing physicians, surgery centers and hospitals with quality new and refurbished medical equipment. The optimal function of all of the equipment we sell is ensured by our team of knowledgeable professionals.

One of the most difficult decisions a medical facility has to make is whether or not to replace its equipment because there are no hard and fast rules. Patient and staff safety must take top priority, but the age of equipment, as well as its ability to continue to be maintained, is also critical.

When the demand for new equipment by staff or patients and rapidly-evolving technology are taken into consideration, the right answer becomes that much more elusive. However, there are several indicators which can help you determine when equipment replacement is imminent.

Equipment Carrying Cost

The “carrying cost” of equipment refers to how much it is costing a facility to keep that equipment. The cost to maintain equipment may become higher as time goes on and equipment ages. When certain machines or their components are discontinued by the manufacturer, there is no other option but to purchase new equipment. Of course, the ideal scenario is to replace equipment long before it gets to this point.

The cost to repair equipment on a yearly basis should also be taken into consideration. No two years will be alike, as parts for some devices will be in shorter supply than others. As well, you will need to balance the demands of your facility’s financial department with those of manufacturers who want you to purchase new equipment.

Current Inventory

Before you can know what kind of new or used medical equipment you need, it’s important to take stock of what equipment you have. Inventory can be conducted in a single session, but this can be incredibly time-consuming. That being said, it can be a good idea to inventory your equipment according to certain categories.

For example, you can inventory all of the patient monitoring equipment in your facility, and then move on to blanket warmers. Inventory can also be accomplished by assessing equipment according to the department.

Regardless of the way in which equipment is categorized, it’s essential to ensure that inventory for your facility is as comprehensive as you can make it. This can be done by considering all facets of a piece of equipment, including frequency of failure, alternate device availability, recalls, and other considerations.

Effectiveness of Maintenance

It’s certainly true that maintenance can significantly lengthen the life of medical equipment. However, unless you can calculate the cost of that maintenance over time, you will be in the dark as to how much it is really costing your facility to keep its existing equipment.

One very effective way to find the answer is to calculate the cost of service ratio (COS). To do this, you will need two figures:

  • The value of the equipment in terms of initial cost
  • The total annual cost to operate your medical equipment program; this includes external contracts, repairs, parts, and labor hours

Once you have these two values, simply divide the total annual cost for your equipment program by the equipment’s value. Then, compare the COS with your facility’s goals for service and technology upgrades. This will tell you how much money is available for new equipment.

How Equipment’s Technology Becomes Obsolete

Knowing what equipment is in your facility and figuring out its cost of service will provide you with valuable information. Another piece of the puzzle is knowing how your various pieces of equipment become obsolete.

You may have received a memo from the equipment manufacturer that software or another technological aspect of your equipment will no longer be upgraded or available after a certain date. This is known as planned obsolescence and can occur when the cost to support current technology is too high for the manufacturer to maintain. It can also occur when the manufacturer is planning to introduce new technology.

The inability of technology to be repaired due to compatibility issues is referred to as functional obsolescence. A good sign of this is when the cost to repair a piece of equipment is getting near to its depreciated value.

Technical obsolescence occurs when a widespread introduction of new technology takes place. One example is when the recordable CD replaced the floppy disk. Technical obsolescence is important to keep an eye on, as it can cause some of your facility’s equipment to have limited performance capability.

Equipment Has a Life Expectancy

You can hold off on equipment becoming obsolete, but this will not make equipment last forever. Eventually, you will need to find new or refurbished medical equipment for sale. The cost of new equipment can be difficult to carry. Unfortunately, the longer you wait to replace your equipment, the more equipment you will have to pay to replace.

Financing New Equipment

It is true that you can purchase your equipment brand new. Thanks to low-cost and low-risk financing options, your facility can get the equipment it needs in a very short amount of time. However, before anything can be purchased, there are a few aspects to consider.

First, what is the equipment’s shelf life? Knowing this will allow you to predict the costs to maintain and repair it. For example, non-technical equipment like hospital beds may only need replacing every decade or so. However, diagnostic imaging and other technical equipment like anesthesia machines need to be replaced far more frequently—often every 3 to 5 years.

Capital Leasing

Equipment that has a shelf life of 10 years or less can be obtained via capital lease, which allows your facility to own equipment once the lease has ended. This allows you to retain your cash for other purposes as you pay for your equipment over time.

Operating Lease

Equipment needing replacement every 3 to 5 years is best suited for an operating lease. This option provides you with the opportunity to return equipment once the lease ends and receive updated equipment in return. Not only can you ensure you always get the most current equipment, but it also allows you to remain competitive.

Another benefit of this option is that, at the end of the lease, you’ve only paid for up to 80% of the equipment’s cost.

Purchasing Refurbished Medical Equipment

Buying your needed medical equipment refurbished does offer several benefits. Companies offering refurbished equipment not only repair or replace any worn or damaged parts but will also rigorously test equipment for optimal function. Doing so is an industry requirement in order for any refurbished equipment placed on the market for resale.

The Same Quality as New Equipment

Purchasing refurbished medical equipment doesn’t mean you have to sacrifice quality; used machines have not only been repaired, but the parts used for repair are often of higher quality than those installed at the time of manufacture.

Immediate Access

Refurbished medical equipment can be delivered to your facility when you need it. This allows patients to have immediate access to the treatment they need.

Doesn’t Require a Large Expenditure

The purchase of refurbished medical equipment means more money saved, as this option costs a fraction of what you’d pay for new equipment. The money saved can be redirected to other areas of your facility, which may need funding, or to the purchase of larger and more expensive equipment.

Considerations to Make for Equipment Purchase

Whether purchasing new or refurbished equipment, its suitability, quality, and size will need to be considered.

A piece of equipment is only valuable to your facility if it does what you need it to do. Ensuring its suitability before you purchase will prevent having to return it later. Take the time to ask questions about the equipment so that you can be sure.

The same is true of functionality and features; ensure you can see the equipment working properly and have all features demonstrated for you so you know exactly what you’re getting.

You’ll also want to make sure that your equipment will not occupy too much space in the room it’s placed in. If space is at a premium, another option is to purchase mobile equipment, which will be more compact and can fit where it’s needed.

Expert Advice Is Best

Where it comes to the purchase of medical equipment, there is simply no substitute for expert advice. The knowledgeable specialists on the Anesthesia Plus team can not only answer all of your questions but can ensure your facility gets the right equipment to provide patients with the best possible care. Discover the benefits of working with Anesthesia Plus by calling 1-800-887-8161.