UK healthcare system grapples with cost of replacing outdated medical equipment
Due to legislative reform, demographic change and rising prosperity, demand for healthcare services is rising across the world, fueling the requirement for up-to-date medical equipment that plays an indispensable role in the provision of high quality healthcare. This is, however, exerting considerable financial strain on the European healthcare systems where a proportion of medical equipment is currently out-of-date and needs to be urgently replaced.
According to latest research from Siemens Financial Services (SFS), UK healthcare organisations will have to invest around £294 million between 2013 and 2015 to replace out-of-date diagnostic imaging equipment (defined as equipment over 10 years old) alone. The capital expenditure required for these essential replacements is even higher for Spain and France, totaling £368 million and £373 million respectively.
As public finance continues to be stretched by austerity measures and efficiency policies, healthcare organisations need to find ways of accessing efficient and available finance to fund urgent medical equipment upgrades and renewals. SFS previous research has shown that asset finance, for instance, is growing as a financing technique for the acquisition of medical equipment across the world.
David Martin, General Manager for SFS in the UK, comments, “Up-to-date medical equipment plays a crucial role in the provision of quality healthcare services and improvement of health outcomes. In particular, diagnostic imaging technologies facilitate accurate, early diagnosis and reduce invasive procedures, making a vital contribution to efficient and effective healthcare provision. It is therefore imperative that healthcare providers urgently replace the backlog of outdated medical imaging equipment. At a time of acute budgetary pressure, equipment replacement can often be made affordable through the use of asset finance techniques such as leasing and renting.
“Asset finance allows healthcare organisations to spread the cost of equipment over its useful lifetime. Such financing arrangements often cover not only the equipment acquisition cost, but also maintenance, service and sometimes consumables. Their growing popularity with healthcare providers around the world indicates the usefulness of being able to align payments with benefits gained.”
Methodology:
Based on a range of proprietary and third-party data on future medical device market projections as well as official studies into the age of the diagnostic imaging equipment, a conservative estimate model was built to calculate the cost of replacing diagnostic equipment over ten years old between 2013 and 2015. The report studies the financial scale of essential medical equipment acquisition in ten global healthcare markets.
The Financial Services unit of Siemens (SFS) is an international provider of business-to-business financial solutions. SFS helps facilitate investments, providing commercial finance, project and structured finance with specific asset expertise in the energy, healthcare, industry, and infrastructure & cities markets. Employing more than 2,900 employees worldwide, SFS supports Siemens as well as other companies with their capital needs and acts as an expert manager of financial risks within the Siemens company. By leveraging our financing expertise and our industrial know-how we create value for our customers and help them strengthen their competitiveness. Beyond that, financing is key in creating trust for technological solutions – and acts as a key enabler when it comes to the market launch. As of September 30, 2012, the total assets amounted to €17.4 billion. For more information, visit: www.siemens.com/finance.