surgical Equipment and scanning monitors

 

 

 

 

 

 

 

 

 

Capital Equipment Strategies

How best to maintain or purchase new

When you have three ASCs of different ages, capital equipment is almost always on your mind, says Erika Noll, chief operating officer of Peachtree Orthopedics. The organization operates a new ASC, a 10-year-old center and a 20-year-old center in the Greater Atlanta, Georgia, area. “The equipment is very expensive, so we want to always get the most out of our purchases,” Noll says. “While capital equipment is built to last, we also recognize that there will come a time when we need to replace our equipment, or we will want to change equipment because we can become more efficient and make better use of our space.” Considering the high cost of capital equipment and the integral role it plays in the operations and success of an ASC, surgery centers should make strategic decisions about their existing capital equipment, says Letitia Moore, director of supply chain and clinical innovation at Simply Supply in Minneapolis, Minnesota.

 

Extending the Life of Your Equipment

Nothing is likely more important to keeping capital equipment running properly than preventive maintenance, according to Patrick Blair, president of Surgery Center Services of America in Mesa, Arizona.
Capital Equipment Rendering of a surgery table

“A car can go for 200,000 miles, but you need to have it worked on regularly. The same is true for ASCs and their capital equipment.”

He advises setting up preventive maintenance contracts with external experts to evaluate and service your capital equipment regularly.

“This is not a place to try to save money. The people who do this work and do it well—who dig under the hood and check every little thing for you—are worth the investment and will end up saving you money in the long run.”

How often capital equipment should receive preventive maintenance will vary between types of equipment, Moore says. While your preventive maintenance provider should be able to advise you on the frequency, the original equipment manufacturer’s (OEM) instructions for use should include the recommended maintenance schedule.

Staff turnover has the potential to reduce the life of capital equipment, Blair says.

If the individual(s) tasked with performing ongoing upkeep, maintaining the calendar for preventive maintenance visits or communicating with service providers leaves the ASC, this introduces risk.

“You need to always have someone handling these responsibilities,” Blair says. “I have visited facilities that had some turnover and discovered they had paid for five years of preventive maintenance services which were never provided, so a piece of equipment needed a complete overhaul. Proper management helps you avoid getting behind the 8 ball.”

When you bring on staff who will use capital equipment, their onboarding should include training on appropriate use, Moore advises. “It is about pride of ownership. If you are careful and treat your equipment properly, you will have fewer problems.” Noll regularly communicates with her capital equipment vendors to stay current on upgrades.” Adding new software to imaging equipment may give us more time before we need to seriously consider a replacement.” If a piece of equipment is aging and showing declines in functionality but remains clinically appropriate and safe, having the OEM or a third party rebuild the machine and bring it back to its original OEM specifications might be an option, Moore says. “This can be an economical way to get a few more years out of your equipment.”

 

Making Strategic Replacements

As capital equipment ages and its end of life starts to approach, Blair advises ASCs to begin financially preparing for purchasing a replacement.
“Determine what you are likely going to need to spend and start putting aside money on an ongoing basis, building up a slush fund. When the day comes that you need to make the purchase, you can do so then and there and not need to worry about where the money is going to come from.”
When researching replacement equipment options, Peachtree Orthopedics considers multiple vendors. “We want to know who can give us the best price,” Noll says. “That is important, but we also look for vendors who can meet our desired installation window. We ask questions about whether vendors provide ongoing maintenance services or if that is something we need to arrange ourselves. If we had challenges working with a vendor in the past, we will factor in those experiences as well when weighing our options.” Determine your plans for the new equipment before making a purchase, Moore advises. “In some instances, you may be looking at ‘workhorse’ equipment you do not intend to upgrade in the next 10 years. In other instances, you may believe you will only use the equipment for 3–5 years. This should factor into your research and planning.” While an outright purchase might make sense for a piece of capital equipment you expect to hold on to for a long time, leasing, renting or another purchasing option might make more sense for equipment you only plan to use for a few years, Moore says. “Discuss with vendors what options are available. There are many more choices for ASCs than in years past, and each has potential risks. Understand the terms of the different types of agreements you can choose from so you can make the best decision.” If you decide to finance a purchase, explore your options here as well, Noll says.  “If you have a local banking relationship, find out what they can do for you. Banks can often give you a better financing option than a vendor.”

 

Buying refurbished equipment can be a way to save money up front, Blair says, but he advises ASCs considering this tactic to proceed with caution.
“There are some items I would highly advise against buying refurbished, including washers, sterilizers and ultrasonic cleaners. It is simply not worth the risk.”
Part of the risk, Blair says, is not knowing what has happened with the equipment in the past, including any repairs that were made and whether preventive maintenance was performed regularly and appropriately.
“You are also likely to get a shorter warranty than if you purchased new and will likely begin to encounter problems sooner because of the equipment’s age,” he says. “Whatever you think you are saving now, you may end up spending it—and possibly even more—later.”
When speaking with physicians considering whether to purchase refurbished equipment critical to their ASCs’ performance, Blair encourages them not to focus on the price.
“$80,000 is a lot of money, but I tell them think about their equipment purchase like a car payment. It costs $100 to use the equipment, and you are getting all the benefits of something new versus used.”
Blair points out another of the significant risks that can come with trying to save money in the wrong places.
“If the machines that are part of the engine for your ASC go down, you may not be able to do surgery and could lose control of the situation. Purchasing is like maintenance: It is always better to be preventive than reactive.”

Article Formatting edited. The original article was printed online by ASC Focus, The ASCA Journal.  With an ASC Focus subscription, the article can be accessed at https://www.ascfocus.org/ascfocus/content/articles-content/articles/2024/february/capital-equipment-strategies