Age of medical equipment highest since 1940’s
A US Bureau of Economics and Analysis study indicates hospitals are using their medical equipment longer. The study shows the average age of medical equipment is now 4.7 yrs. Some may say this is a bad thing and that hospital infrastructure is deteriorating, but it may be a good thing. It indicates healthcare facilities are running more efficiently.
In the 1990’s/early 2000’s when hospitals didn’t worry about budgets or any kind of spending, they bought the latest technology as soon as it was available. Then the crash of 2008 and rise of Obamacare and lowering reimbursements happened. Now, hospitals have to be wiser with their dollars. They need to maximize their capital assets and this study shows they are. Capital purchases are now more scrutinized, so the department requesting the equipment will need to show it is necessary.
Hospitals spending less may also drive the price of capital down. Suppliers need to find ways to sell their latest/greatest products. New technology may not be enough anymore, so financial incentives may be added to deals.
To read the full Bloomberg article about increasing age of equipment: http://www.bloomberg.com/news/articles/2016-10-06/america-is-aging-in-more-ways-than-one
Hospital Expansion and Renovation
With hospital growth and aging facilities comes the need for building expansion and renovations. The impact of this goes way beyond brick and mortar. Hospitals have plenty to consider prior to starting any expansion or renovation project:
- Outlining calendar for engagements
- Selecting third party firms (architects, construction companies, equipment planners etc.)
- Planning for patient and staff impact/transition
Another area that is impacted by expansion/renovation projects are the assets currently being housed in these departments. This might include but is not limited to medical devices, furniture, IT equipment etc.
With any project, knowledge = power and proper planning for expansion or renovations will assist with minimizing costs, delays and negative impact on staff and patients located in these areas. When a hospital decides to move forward with an expansion or renovation project, it’s important to take a detailed look at assets housed in these areas.
Third party vendors can provide a detailed inventory of assets with condition assessment outlining remaining useful life to assist in the decision making process. The following questions can be answered with information captured in asset audits:
- What assets do we have?
- Can we use current assets in the renovated or expansion areas?
- Are assets technologically viable for the new area or should we plan on replacing?
- Are the assets streamlined with technology throughout the system for PM’s?
- How will we manage the equipment transition process?
- What new purchases will be required?
- Can we use old assets for trade-in credits on new purchases?
- Do we have storage space to accommodate assets the will be reused?
- What is the best course direction for assets that will not be traded-in or reutilized?
- Who will handle the disposition process for these assets?
As with any project, proper planning lays the groundwork for a successful job. Understanding the impact of assets housed in these areas will play an important role as the expansion or renovation progresses. Including assets as part of the strategic process enables you to properly prepare for the new/renovated location.
- MRG conducted an inventory and appraisal project for a MI Medical Group with assets valued at more than $600,000.00
- MRG completed liquidation of medical assets located in an Ohio Surgery Center
MRG Appraisal of the Month:
GE/OEC Flexiview 8800 C-arm
-Fair Market Value: $30,000.00
MRG Hospital Fun Fact:
I see big bucks in your future. Could a CAT scan cause you to lose your psychic powers? A Philadelphia woman sued Temple University Hospital in 1976 for her loss and was awarded $988,000. I guess she didn’t see that coming.
Source: Friday Fun Facts About Hospitals