For both new and established medical practices, capital expense management is one of the most important aspects of running a successful business. Capital expenses can range from mundane, everyday office products to the technology that drives efficiency and revenue for your practice, such as computer systems and medical equipment.
While uniforms and furniture lend to your branding and aesthetics, well-chosen computer systems can improve workflow and billing, and modern medical equipment can create new revenue. For example, gynecology practices that provide 3D ultrasound imaging in-house are not merely increasing their bottom line — they are providing point-of-care exams for a patient who does not have the time to visit another clinic. Additionally, on-site ultrasounds can reduce the number of tests a patient must undergo before a diagnosis can be reached and minimize the need for more invasive procedures.
Choosing the Right Equipment
Incorporating state-of-the-art 3D ultrasound equipment is a big step for many small and midsize practices, and deciding whether to lease or finance this technology is key in capital expense management. When determining what type of equipment to acquire for your practice, consider the following questions:
- If your business already has an ultrasound machine, how many procedures does it perform on a monthly basis? What is the reimbursement per procedure?
- If you do not have ultrasound equipment, how many procedures do you send to other businesses?
- How would you practice differently if you had this diagnostic tool in-house?
- How much cash is available to purchase or upgrade existing equipment?
When to Consider a Lease
Perhaps the most important factor when deciding whether to lease is cash on hand. Leasing, rather than purchasing, decreases the upfront expense, and payments are usually deducted from total taxable income. Agreements can be flexible, which enables practitioners to negotiate the payment terms to ensure that the technology fits within the budget. Although a lease might cost more long term, the practice may be able to purchase the equipment at a reduced cost when the contract expires.
For practices that aim to offer the most advanced technology, a lease can be more advantageous for frequent upgrades than repeated purchases. This type of business branding is important to patients seeking state-of-the-art care.
When to Consider a Purchase
A business that has sufficient capital available to purchase or finance equipment is likely looking for a return on investment (ROI). The ROI is the point at which the equipment is owned outright and any reimbursements become real income. While the payments themselves are not tax write-offs, any interest paid on loans is credited. The equipment is depreciated over an appropriate number of years, further increasing the tax benefit of a purchase.
Capital Expense Management Is Not One-Size-Fits-All
Choosing the most appropriate way to obtain advanced ultrasound technology is crucial to both the financial success of your gynecology practice and your ability to deliver exceptional care to your patients. Every practice is different, so the question of whether or not to lease ultimately comes down to your patients' needs and the brand of care you want to establish for your business.
