NHS leasing wider range of medical equipment, according to SFS research
3 February 2013
Leasing in the NHS is growing in popularity and extending to a wider range of equipment, according to a new analysis by Siemens Financial Services (SFS) of leasing activity in 2012.
Although diagnostic imaging equipment still constituted the largest proportion of equipment tendered in 2012, there was an 8% increase in the number of leasing tenders for a variety of other medical equipment including incubators, pressure relieving mattresses, haemodialysis machines, automated endoscope reprocessors and washer disinfectors.
These findings suggest that leasing is growing in popularity as NHS trusts seek to acquire the most up-to-date equipment and underpin patient service quality and efficiencies, without tying up scarce capital, focusing funds instead on front-line service delivery.
Chris Wilkinson, Head of Sales, Public Sector Leasing at SFS, comments, “Finance managers in healthcare need to master the challenges of maintaining high service quality standards in the face of budget constraints and efficiency targets. With capital being a scarce commodity nowadays, NHS Trusts need to fund frontline services using a financially sustainable method.
"Asset financing techniques such as leasing help align costs with the efficiency savings enabled by modern medical equipment, thereby allowing healthcare organisations to make affordable technology investments even at a time of downward capital pressure.
“The increasing proportion of healthcare equipment being acquired through asset financing techniques can help free up “frozen capital” — inefficiently deployed capital funding as a result of up-front equipment purchasing — in the healthcare sector for frontline services. Currently, close to £2 billion of capital is “frozen” in the UK healthcare sector. Using asset finance, financial managers can harness private sector capital and spread the cost of equipment in regular monthly payments over the financing period. In addition, such financing arrangements can often incorporate service, maintenance and technology upgrade during the leasing term.”
In 2012, West Suffolk Hospital hospital decided to acquire three static and one mobile Mammomat Inspiration Full Field Digital Mammography systems from Siemens Healthcare after a competitive tendering. To finance the significant investment, the hospital opted for a lease provided by Siemens Financial Services (SFS) in a separate competitive tender.
Nigel Beeton, Imaging Services Manager at West Suffolk Hospital, said, “To balance the need to drive cost savings while ensuring the highest standard of patient care, financial sustainability has been a fundamental element in our investment strategy. The finance lease from SFS allowed us to realize the diagnostic and clinical efficiencies delivered by digital machinery while removing the need for a one-off capital payment on the balance sheet.
"Instead, the lease agreement spread the lease payments to assist with asset and financial planning at the Trust. This finance model has enabled us to acquire state-of-the-art technology for the delivery of high quality and efficient healthcare services.
"Siemens’ expertise and experience in delivering innovative medical equipment and technology means that SFS has a proficient understanding of the medical equipment market. We are very pleased with the specialist finance solution that is tailored to our specific needs and individual requirements. Combined with the very competitive prices, the finance offering, together with the first-class equipment, represents a true value for us.”
Siemens Financial Services Whitepaper. Melting the Iceberg, May 2012.