Figuring out what to do with end-of-service healthcare technology is a classic administrative hot potato. Who’s responsible? Do we sell it, store it, or recycle it? How should we adjust our strategy with regard to the COVID-19 crisis? How do regulations like HIPAA come into play? And what’s it going to cost us?
The problem isn’t the questions themselves. Providers should be asking those questions and many more besides. The problem is when they’re asked – often just before a provider replaces obsolete technology.
But the right time to talk about retiring technology is before acquiring it.
That’s in large part because the acquisition method used to put your solution to work – buying or leasing – will have an outsized effect on how you put it to bed.
Why Consider End-of-Service Upfront?
When you buy technology, you’re entirely responsible for eventual asset disposition and all the costs that come with it. When you lease, you’re not. So the question becomes, “Does it make sense for us to be responsible for handling our solution at the end of its useful (to us) service?”
Here are a few points to think about when you answer that question.
All technology will become obsolete eventually, but mature technologies don’t advance at the breakneck pace of newer technologies. In general, you’ll use them longer and they’ll have a greater value on the secondary market, making owning the assets and managing lifecycles yourself a more compelling choice. On the other hand, technologies that change relatively quickly are often better suited to leasing, which relieves you of many asset management duties (and costs) and offers a much simpler upgrade path as the technology advances. In fact, the built-in asset management you get with a lease can be considered a major value-add by your solution provider and finance partner, often saving you far more than your leasing costs.
As COVID-19 continues to heavily impact the nation’s healthcare system, providers need more flexibility than ever when it comes to adapting to rapidly evolving needs. Technology leasing can provide a greater level of budgetary and operational agility by allowing quick changes to equipment, terms, payment structuring, etc. without slowing down to address end-of-service issues.
With technology comes data, often sensitive data that’s subject to a list of regulations as long as your arm. Of course, you’re responsible for adhering to those regulations while the technology is in service at your facility. But what about after, when the data runs a greater risk of escaping into the wild? In cases where this isn’t a concern or you have the capability to ensure data security, ownership of your healthcare technology can be a good choice, assuming other benefits are there. If, however, you see value in having someone else be responsible for handling data housed in end-of-service technology, consider a lease with a data security clause.
Before You Buy It, Talk About Retiring It
As with so many other decisions, acquiring healthcare technology should begin with the end in mind. Taking time to evaluate the solution lifecycle up front, before you decide to buy or lease, can not only help you control costs but also get more from your technology over its entire useful life.