The article by Rabinowitz presents an analysis of the necessary information that experts in the healthcare industry should understand regarding their choice whether to lease or buy medical equipment. According to Rabinowitz (2016), only a third of medical equipment is purchased directly, while two-thirds are either on lease or acquired in other different financial arrangements. Experts in the healthcare industry must weigh the options considering the high cost of medical equipment, which continues to go up. There are several advantages of leasing medical equipment rather than buying them. Leasing is advantageous because the facility uses the medical equipment and pay for the use, always between three to four years.
The choice to lease saves thee leaser cost of maintenance that may be high after prolonged use of medical equipment. In most instances, the medical equipment manufacturer covers the maintenance cost of the medical equipment over the first few years of the lease based on the agreement. The choice to lease medical equipment, therefore, serves as a cost-saving strategy. Besides, the leaser can purchase an extended warranty to cover regular maintenance of the medical equipment after the first warranty expires. Although an extended warranty might be more expensive compared to the original warranty, it is comparatively cost-effective when compared to the cost of maintenance when buying the medical equipment.
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Leasing also offers the expert the flexibility to make arrangements for payments that serve the facility’s structure based on forecasted income or cash flow. Sutton (2014) notes that leasing helps the business to save on capital and preserve its cash. A startup medical facility, for instance, may not have a reliable income over the first few months. Leasing, therefore, is a perfect strategy for the startup facility to arrange payment after an agreed period, maybe two or three months. Leasing, therefore, is advantageous compared to buying medical equipment.
References
Rabinowitz, E. (2016). Weighing the Benefits of Buying Versus Leasing Medical Equipment. MD Magazine . Retrieved March 31, 2019 from https://www.mdmag.com/physicians-money-digest/columns/financial-health-check-up/10-2016/weighing-the-benefits-of-buying-versus-leasing-medical-equipment
Sutton, W. G. (2014). Lease or loan? What healthcare providers must know. Healthcare Finance. Retrieved March 31, 2019 from https://www.healthcarefinancenews.com/blog/lease-or-loan-what-healthcare-providers-must-know
