A new article in Radiology Today explores how using flexible financing for investments in MRI, CT and other types of advanced equipment may be instrumental in helping some rural hospitals not only survive, but thrive.
Challenges strain rural hospitals
The article by James Seiferth, manager of healthcare finance at Key Equipment Finance, describes the complicated challenges rural hospital face that can't easily or quickly be overcome. This includes lean margins and tight budgets, as well as physician shortages, fewer patients and a higher percentage of Medicare patients than urban counterparts.
In fact, data from the Cecil G. Sheps Center for Health Services Research at The University of North Carolina at Chapel Hill showed 119 rural hospitals have closed in the United States since 2010. Also, a 2018 healthcare vertical market report from the Equipment Leasing & Finance Foundation attests that more than 20% of rural hospitals in the United States are near insolvency.
Flexible financing may offer lifeline
Rural hospitals may find some relief in equipment financing.
“There is a snowball effect that drives a lack of capital, which causes an inability to invest in everything from technology to electronic health records to imaging to keep up with the standard of care,” says Daniel DeBehnke, MD, MBA, CEO of the Omaha-based Nebraska Medicine system and coauthor of a recent Navigant report referenced in the Equipment Leasing & Finance Foundation report.
This is good news for rural hospitals in desperate need of new equipment while facing major funding challenges.
Nonstandard financing is one avenue
Commonly referred to as alternative or “nonstandard” financing, these newer, more flexible equipment finance options are more than just a new product or service offering; they represent a shift in mindset toward a more solutions-based approach to financing equipment.
In many cases, nonstandard equipment finance starts with a much broader “team” approach to meeting a hospital’s needs. The team can include the equipment manufacturer, a variety of service providers, an equipment finance expert, and other potential partners. Hospital leaders can select partners and solutions based on who can provide the greatest flexibility, which can include everything from usage-based payment plans to early cancellation.
New MRI helps hospital thrive
For Boone County Health Center in Albion, Nebraska, discovering tax-exempt financing was the key to a new MRI scanner and, unexpectedly, a new community of patients.
When Boone County executives began researching new high-end scanners, their equipment vendor brought an equipment finance partner into the conversation to take a closer look at the hospital’s specific needs and financial situation.
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