Keeping a healthcare facility properly equipped despite cash flow and budget challenges is not a new problem by any means. But at a time when hospitals and other providers are looking at first-half losses measured in billions, that task becomes dramatically more difficult, making a highly strategic approach to financing medical equipment and software more important than ever.
Elective Procedures, Essential Revenue
Elective procedures and associated revenue streams have been paused for months due to COVID-19. Though providers have begun digging into backlogged procedures, revenues will take time to arrive, hampering cash flow. Further complicating the matter is historic levels of unemployment, which is shifting the payer mix from employer-sponsored to publicly funded insurance with lower reimbursement rates.
While these impacts could easily last for years, the need for healthcare equipment and software remains, leaving providers scrambling for a financial solution that supports those acquisitions without compromising cash flow, capital reserves, and credit lines earmarked for other needs.
The pressure is easing as the number of COVID-19 patients begins waning in some areas and elective procedures are once again on the schedule. The $100B Provider Relief Fund, part of the CARES Act, helps too. But many providers still face an especially challenging cash flow and budget environment, and they likely will for some time to come.
A More Flexible Way to Get Equipped
A dedicated equipment and software financing program can provide much-needed flexibility in the way providers acquire and pay for needed medical solutions, as well as help control costs across the solution lifecycle. Here’s how:
- Improved cost/revenue pacing – equipment financing can be customized with variable payment options that help control cash flow while providers bring solutions online and ramp them up to full revenue-generating capacity.
- Start-to-finish, end-to-end financing – the right finance option can cover 100% of one-time and lifespan investments in a working solution, including hardware, software, services, and more, conserving cash throughout the solution’s deployment.
- Software-friendly terms – some finance solutions can handle multiyear software agreements that allow you to spread the cost over time while still enjoying the convenience, peace of mind, and potential discounts available with longer term agreements.
- Easier asset management – depending on the acquisition method you choose, you can forgo the administrative workload and cost of storing, selling, or disposing end-of-service assets, as well as take advantage of periodic technology upgrades with a minimum of paperwork and hassle.
- Preservation of other financial resources – by funding equipment and software solutions with a finance program created and customized for the purpose, you retain access to capital reserves, existing credit lines, and other financial resources that can then be deployed in more strategic ways.
What’s Your Healthcare Equipment Funding Strategy?
In a time of extraordinary financial challenges, getting equipped to propel a healthcare facility forward requires an exceptionally flexible funding strategy. By leveraging a dedicated equipment and software finance program, medical organizations can stay on the cutting edge while maintaining the financial strength and agility needed to be ready for what’s next.