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Financial options for the procurement of medical equipment

Friday 18 November 2016

In recent years it has become increasingly difficult for NHS Trusts to finance medical equipment purchases using capital budgets. With the backlog of aged medical equipment increasing and Trusts being tasked with maintaining assets beyond their recommended lives, exploring alternative financing options to effectively manage medical equipment is critical.

These issues were explored by key figures from the finance sector and the NHS during NHS Supply Chain’s most recent asset management webinar. Specifically, the session focused on the alternative methods a Trust can take advantage of to finance medical equipment replacement plans.

Simon Goldie, Head of Asset Finance at the Finance and Leasing Association, gave an overview of the medical equipment leasing market in the NHS, the services and products available to trusts and the benefits that leasing can bring. His key message to the NHS centred on the benefits of leasing (such as the ability to spread payments over the life of the equipment through the revenue budget), the importance of active lease management and practical advice on how a Trust can get the most from their lease portfolio; 

“Actively manage the lease portfolio, make sure you understand all the equipment you have on a lease, when you want to renew and what you will want to do once the lease ends.”

Building upon this, Dr Scott Brown, Capital Investment Manager at Royal Cornwall Hospitals NHS Trust, provided insights into the process his Trust undertakes when determining the most appropriate way to finance their replacement plan. Given the vast range of medical equipment procured and used within the trust, Royal Cornwall utilise a mix of capital, lease and loan financing. Scott outlined the benefits and limitations each route provides, explaining that the right financing option depends on the equipment being bought and the Trusts strategy.

“There is no right or wrong solution as this will depend on the type of equipment, there may even be a blend of options used to suit our financial position.”

Finally, Lee Singh, a Solutions Development Manager at NHS Supply Chain, focussed on the role the Independent Trust Financing Facility (ITFF) can play when looking for addition finance. The ITFF is a loan fund managed by the Department of Health which provides a facility to fund a range of assets including medical equipment and enabling works. Lee provided key insights into the application process for an ITFF loan, identifying best practise when submitting a business case for funding and how to avoid delays in the approval process.

Further information

Throughout 2016 we have been running a program of webinars with the theme “Managing Medical Equipment in a Financially Constrained Environment”. If you would like to watch the webinar referenced in this article or any previous recordings please visit our dedicated webpage:
https://www.supplychain.nhs.uk/capital/asset-management/medical-equipment-management-webinars/

The next webinar in this series titled “Understanding Outsourcing” is on the 15th December and will look at Managed Equipment Services in the NHS. If you would like to join us full details about the event can be found here:
https://www.supplychain.nhs.uk/events/calendar/2016/12/15/asset-management-webinar/

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