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 3
The ROI calculation considers
depreciation (the reduction in the
value of an asset with time passage
due to wear and tear) and estimates
the life of the equipment at 5 years.
You'd need at least 32 cases per year at the contribution margin of
$950 per case. You calculate the contribution margin by taking the
average revenue per case ($2,500) and subtracting the supplies, labor
and contract labor per case ($1,550). We calculated the service con-
tract and initial startup costs (training and procurement) into the
expenses. Based on our assumptions, this looks like an obvious pur-
chase that will provide substantial profit.
If your facility is concerned about cash flow, you can consider financ-
ing or leasing. You can also rent some equipment on a per-case basis.
This can be a good option if you have low confidence in your utiliza-
tion, as it eliminates the possibility of the equipment sitting in your stor-
age area collecting dust. Be sure you're not running afoul of regulatory
requirements with any per-case agreement.
When your facility invests in a new piece of equipment, you need to
know what kind of financial return the investment will yield. It's criti-
cal to calculate your net financial gains or losses and to consider all of
the resources invested and all of the amounts gained. This will miti-
gate your financial risk as you continue to grow your business and
improve the quality of care for your patients.
OSM
Ms. Courtay (rena.courtay@gmail.com) is the president of Solutions for
Outpatient Surgery, a consulting firm specializing in ambulatory and office-
based surgery.
The big decision centers
around your facility's ability to
earn its money back after
purchasing the equipment and
then to go on to reap a profit.