An interview with Ardy Cortez, Executive VP, Americorp Financial
Should you have that older Capsa product repaired, or buy a replacement? It is an age-old question. Just as we wrestle with throwing good money after bad with an aging furnace at home, many of the same factors must be considered when the product in question is medical equipment. Whether a 7-year-old Avalo treatment cart or a 14-year-old Kirby Lester KL15e pill counter, all mechanical items eventually need maintenance – or they wear out.
If the product is not ancient or does not have significant issues, Capsa makes it simple to source parts on our revamped ShopCapsa.com. Our Service & Support crew regularly gets top reviews from our customers, who appreciate our painstaking efforts to minimize downtime and maximize your product satisfaction. In addition, for extended warranty options, ask your Capsa rep.
However, when the product in question is causing problems, we consulted with an expert. Ardy Cortez, Executive VP of Americorp Financial and Capsa’s long-time leasing partner, has helped thousands of healthcare customers navigate this decision using finance programs to acquire equipment affordably. She says no mathematical equation or Magic 8-Ball exists to identify at what time medical equipment is cheaper to repair or replace. However, she shared her checklist that helps healthcare customers work toward the best decision for each scenario.
10 Questions: Should You Repair Or Buy A New Medical Device or cart?
- Is the Product Discontinued or Obsolete? Companies frequently cannot repair or provide parts for products beyond a certain age. Moreover, a discontinued item is obsolete anyway as the manufacturer replaced the outdated product with a superior design. This usually makes for an easy decision: acquire new equipment.
- Computerized or Not? New products are often significantly better than the old version with more features and included upgrades. In some cases, older versions pose interfacing or compatibility problems for the IT environment. Things move faster for a higher-tech product versus a strictly mechanical product. Most people will want to upgrade tech sooner.
- Is Patient Safety Affected? If yes, then I usually advise upgrading. A storage bin sitting in a corner of a medical clinic is different than life-support equipment. Fix the first, then replace the second.
- Are Controlled Medications Involved? Certain medical devices have new technology specifically for narcotics. I advise to go new instead of repairing a product that doesn’t include safeguards. If it helps avoid employee diversion, or patient errors, or inventory holes, it’s worth the spend.
- Is Employee Productivity Affected? Time is money. Staff efficiency is money. When faulty equipment starts to affect productivity or workflow, buying new equipment becomes the easy choice.
- Will New Equipment Cost Less to Operate? Can the latest version save in indirect ways (aka, soft ROI)? New designs may use less power, prevent costly errors downriver, or alleviate a problem for the maintenance staff. The old adage, “They don’t make ‘em like they used to” is proven untrue by none other than Consumer Reports. Its annual surveys show similar repair rates year-over-year. The only difference involves the technology – some newer products may stop working altogether versus work poorly. Neither is good for your patients or staff.
- Can You Benefit from Tax Savings or Incentives? If you are purchasing outright or leasing to own, Section 179 tax deductions provide a real savings for for-profit organizations. If you are unfamiliar with Section 179 (truly a gift from our government), ask your Capsa rep. Manufacturers also may offer seasonal incentives that ease the pain of buying new versus repairing.
- Do You Have A Devoted Maintenance Crew or Handyman Skills? Not everyone is good with a wrench or has budget for a repair team. Small businesses run across this issue more than larger corporations. A pharmacy owner’s time is money. Negotiating and then waiting for repairs may become more expensive to your business than replacing.
- Is the Product Breaking Frequently? Medical equipment is not like a car where you can squeeze out a few more good years. Equipment gets more rickety over time. Replace the device if downtime is increasing.
- Are You Already Leasing? If your equipment is close to the lease end, upgrading to new equipment and removing outdated equipment is simple and seamless: roll over your existing lease agreement. Some benefits include: updated technology and warranty; no large, upfront cash outlay for the equipment; 100% financing with no large downpayments; avoids technology obsolescence (upgrade, buy or return at lease end); you determine the fixed monthly payment (generally the payment would be close to what the current payment is for easier budgeting); and applicable Section 179 tax deduction benefits.
“I am strongly in favor of investing in your business, versus patching up and limping along,” Ms. Cortez added. “Think hard about pouring time, resources, and money into old equipment that will soon be obsolete. If it’s costing you time and money now, it’s only going to get worse.”