Cardiovascular Business - May/June 2008 - (Page 15)

Mobile nuclear Camera: sample Monthly Breakeven Procedure Volume Chart $70,000 $60,000 $50,000 $40,000 $30,000 the typical lease term, says Rossi. That is, $20,000 an electrocardiograph will continue to add to the bottom line for years after the practice has paid for the system as a cash $10,000 purchase. The practice should review tax and cash flow implications, too. “A practice $0 that amortizes the equipment as a non49 59 69 39 19 29 cash expense over the life of the lease can Procedures add the expense back to cash flow and $16,116 $24,808 $33,500 $42,192 $50,884 $59,576 Revenue use the funds to remain current on other $30,610 $30,610 $30,610 $30,610 $30,610 $30,610 technology investments,” says Beveridge. Fixed Costs Various lease structures offer bottom$1,391 $2,141 $2,891 $3,641 $4,391 $5,141 Variable Costs line benefits. A capitalized lease, which $32,000 $32,750 $33,500 $34,250 $35,000 $35,750 Total Cost entails higher monthly payments, allows Breakeven occurs where revenues = total Costs, i.e., 39 procedures. this chart was created for the practice to purchase the equipment a mobile nuclear camera that would be taken to various communities surrounding the main locafor $1 at the end of the term and provides tion. the same principles, however, apply for coronary Cta or any other technology. (source: r. Beveridge) the tax benefits of depreciation over the life of the lease. An operating or off-balance sheet lease, however, offers cash-flow friendly lower monthly payments but no depreciation benefit. The practice retains the right to purchase equipment into the lease after the initial installation. “Practices the equipment at fair market value on an operating lease. on a tight budget should remember they are paid for basic image acquisition. Bells and whistles can be added at a later date if needed,” explains Weiss. That is, usually a practice that finances Leasing under the microscope through a vendor can wrap additional workstations or storage When Los Angeles-based Apex Cardiology decided to deploy into the lease over the life of the lease. a GE Healthcare CT scanner and Centricity PACS in 2005, the Still, leases aren’t right in every situation. “Practices will pay a practice evaluated various financing solutions. Leasing was more premium to lease equipment,” notes Burns. The question to anattractive than purchasing the system for several reasons, says swer: is the premium worth it? Mason Weiss, MD, managing partner. Cardiac CT technology continues to evolve, and the practice did not want to own an antiquated system at the end of the lease term. The lower monthly The last word cost of leasing also minimizes the impact on monthly cash flow. Practices investing in technology need to undertake due diliFinally, leasing offers options. gence, completing a thorough feasibility study, investigating If Apex Cardiology decides to sub-lease its CT scanner or all lease and purchase options and ensuring that pricing rePACS to another practice, the practice can require the partmains competitive. The end result justifies the time and effort ner to assume a portion of the lease rather then negotiate new as the practice that does its homework can tap into technolterms on purchased equipment. Because the practice decided to ogy to improve its bottom line, patient service and physician lease its systems through GE, it has been able to wrap additional workflow. CardiovascularBusiness.com Cardiovascular Business 15 http://CardiovascularBusiness.com

Table of Contents Feed for the Digital Edition of Cardiovascular Business - May/June 2008

Cardiovascular Business - May/June 2008 Contents First Word Cover Story - Coronary CTA: Drafting the Strategic Plan Financing New Technologies: Early Adopters, Lease vs. Purchase, and Joint Ventures Clinical Study Digest: ACE or ARB: It's Your Choice Can Off-Hour D2B Times Be Reduced Without Breaking the Bank? Digital Image Management Primer: Integrating Echo SPECT/CT for Cardiac Disease Detection: An Economic Conundrum Integrating the Healthcare Enterprise Connects IT Systems News & Views Calendar Reader's Resources The Back Page

Cardiovascular Business - May/June 2008

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