NHS interest in financing techniques to purchase medical eqipment soars
20 February 2012
New research from Siemens Financial Services (SFS) has revealed steeply rising interest in leasing in the NHS. The research tracked the number and the value of leasing tenders issued by the NHS — financing arrangements designed to help healthcare organisations acquire new technology.
An increase of 28% in the number of NHS leasing tenders was observed in 2011 compared to the previous year. In terms of the aggregate value of those leasing tenders, the increase was 68%. These figures provide evidence of an increasing focus on the use of financing techniques by NHS purchasing professionals to acquire more efficient and effective healthcare technology, in an environment of downward pressures on capital spending.
Chris Wilkinson, Head of Sales, Public Sector Leasing at SFS, notes, “There is major financial pressure on the NHS, despite budget protection compared to other government departments. NHS spending as a whole has been “ring-fenced”, yet over £20 billion of efficiency savings have to be achieved by the middle of the decade, while capital spending is to fall by 17% by end of the period.
“Acquiring up-to-date technology is critical to meeting efficiency targets. Many studies have shown that up-to-date healthcare technology often has a disproportionately large and positive impact on delivering better health outcomes and operating efficiencies. A relatively small investment in technology can have a large effect on radically improving the cost, efficiency and effectiveness of diagnosis and treatment.
“The big question is how to afford that technology, and it looks like there is a growing groundswell of NHS finance professionals now exploring the full range of options available to them. Also, the system of working with an expert financing advisor, utilised by most Trusts, and the streamlined tendering system to find the best value offer, makes the process easy for Trusts and for financiers alike.
“A previous Siemens’ study has shown that some £615m (€732m) is currently ‘frozen’ in the UK healthcare system – tied up in outright equipment purchases. Financing arrangements such as leasing free up that frozen capital, making such technology acquisition affordable for cash-pressured NHS Trusts by spreading the cost across several years of affordable monthly payments, embracing service and maintenance in the deal, and often offering technology upgrade options during the leasing term.”
Source: Siemens Financial Services