Let's walk through the process.
1. Equipment cost. The first step is to input the actual cost of the
equipment. Be sure to include sales tax. That's easy enough, right?
2. Recurring cost. This encompasses the maintenance agreement,
the staffing required to use the equipment, disposable supplies
required and training expenses.
3. Utilization rate. How many procedures are projected to be per-
formed on an annual basis using this equipment? How many patients
will the equipment be used on? It's easy to overestimate these num-
bers. That's a dangerous trap. If you're too optimistic, you could end
up with a positive rate of return on paper when the actual rate of
return is negative. Project this over a 4- to 5-year period, which is the
time period usually used for these calculations. I'm sure you've seen
the six-figure piece of equipment a surgeon just had to have that is
now hidden in a storage closet (lead apron hangers) or in a hallway
collecting dust. This is always an inherent risk in any large capital pur-
chase.
4. Reimbursement. Finally, what is your expected reimbursement
for each case or test? You'll have to estimate this based on your cur-
rent payer mix.
A new C-arm?
Let's take a look at an example of the purchase of a large C-arm. Your
upfront equipment costs are somewhere around $140,000. You have
required maintenance for the equipment and staff required to do the
cases and to run the C-arm and any training costs incurred. For labor
and supplies, you can use the average labor-and-supply cost per case
for your facility. If you don't have an X-ray tech on staff, you need to
add the costs to bring one in. The average reimbursement at your
facility for orthopedics is $2,500. See the table atop the next page.
N O V E M B E R 2 0 1 8 • O U T PA T I E N T S U R G E R Y. N E T • 2 1