Need to purchase imaging equipment? Consider all costs of ownership.

Sonosite are exhibitiing at the EBME Expo 2019As hospitals and clinics become more analytical about their purchasing decisions, they are starting to evaluate the total cost of ownership (TCO) of capital equipment, including portable capital equipment, rather than the initial outlay alone. Hospitals and clinics are recognizing that if they want to control and contain their costs, they must first understand what they are actually spending over the lifetime of their equipment.

New resources are emerging to support these calculations. At a recent Radiological Society of North America (RSNA) meeting, for instance, a forum was held where industry experts discussed critically important components of TCO for the purchase of imaging equipment specifically. These components included the financial, quality, and technical aspects of the equipment’s future maintenance and repair. Similar resources include a recent retrospective study reported in Imaging Technology News and conducted by Alpha Source that calculated TCO in part by tracking the service history of a large, nationwide installed base of a specific type of ultrasound equipment over a three-year period (2010 to 2014). The evidence-based report considered the economic benefits and risks of comprehensive service contracts versus service and repairs billed hourly versus in-house biomed resources, and ultimately found a wide range of expenditures by type of ultrasound machine. Although the average total annual spend across all units was $9,800 per year, the high end of the range was over 5 times (5X) that. Furthermore, about one quarter of the hospitals were found to have spent 50 percent more than the average cost of a contract, and 10 percent of hospitals spent twice the average annual price of a service contract by purchasing hourly billable service (T&M) and parts.

Such analysis is insightful and gets to the specifics needed for a TCO calculation. However, service and repairs are only part of the story regarding the total cost of owning imaging equipment— other categories of costs, discussed below, also need to be taken into account.

Understanding Soft Costs

While customers focus primarily on purchase price and secondarily on future costs, they often overlook what are known as “soft costs.” These costs include those necessary to upgrade equipment as well as to train and educate users. Other “soft costs” that tend to be overlooked include how the vendor’s maintenance track record and reputation may affect the equipment’s trade-in value. Service rates and warranty specifics also vary by vendor. The following is a soft cost checklist of some of these components, and reasons why they need to be considered up front in the decision-making process:

  • Upgradability
  • Training and Education
  • Track Record
  • Downtime and Redundancy: Importance of Rapid
  • Replacement Loaners
  • Warrantees, Maintenance contracts and Service Rates
  • Trade-in Value

To discuss in detail the decision making process when considering all cost of ownership of purchasing Ultrasound equipment visit FujiFilm SonoSite on booth D27