Decommissioned assets: key areas of impact
It’s not uncommon for hospitals to be reactive around decisions associated with reselling decommissioned assets. This mindset starts with replacement budgets and runs through the time when equipment is retired and removed from service.
When replacing capital equipment there are 3 key area’s that can impact the decision making process:
• Annual replacement budget
• Negotiating new purchases with the OEM/Trade-ins
• Removing the decommissioned asset from service
Identifying valuation data at each of these key phases during the equipment disposition life cycle can provide valuable information to support decision making. This allows the hospital to take a more proactive approach with the disposition process.
Annual replacement budget: When budgets are being discussed and capital is being allocated toward new equipment purchases, it is beneficial to have a third party reseller assist with providing a replacement budget valuation. This gives the hospital a snapshot of marketability each asset has in the secondary marketplace. Does the asset have potential resale value versus discarding the asset once decommissioned? This snapshot doesn’t ensure the asset will retain the secondary market value applied nine months down the road but does provide valuable information as you plan to replace the asset prior to negotiating the new purchase.
New purchase negotiations/trade-ins: It’s not uncommon for hospitals to trade-in assets that are being replaced with new purchases. Many times the OEM will offer a discount off the new purchase to account for trade-in value. The challenge is most hospitals have no idea if the trade-in offer is fair which can leave money on the table. Knowing the fair market value of an asset prior to negotiating the trade-in provides information that can be leveraged during the negotiation process. Identifying the fair market value of the asset can assist with increased trade-in credits from the OEM and also provides the hospital an alternative option by selling the asset on the secondary market if the trade-in credit is too low.
Assets removed from service: If the hospital has taken either of the previous two steps then it should have a good idea if the decommissioned asset has viability on the secondary market. Decisions should already be determined, outlining the best course of direction for the asset: trade-in, repurposed within the system, resold via secondary market, donated or salvaged. There will always be unexpected one-offs that come out of service various reasons, but having decisions made prior to an asset being decommissioned will minimize the need to put assets into storage or undervaluing the asset by accepting low purchase offers from vendors.
Being proactive with assets impacted by new purchases helps hospitals address challenges surplus equipment can place on decision makers. Having answers to questions surrounding capital equipment creates increased potential for trade-ins, minimizes storage space, and increases return on investments. It also maximizes efficiencies for the departments overseeing the disposition process. An important note when selling any surplus equipment, make sure you have cash in hand before the asset leaves the property and don’t pay fees for transportation or warehousing by third party sellers.
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