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What Lies Ahead for Capital Expense Budgets?

Karen Minich-Pourshadi, for HealthLeaders Media, March 7, 2011

Bob Lavoie, who heads the New York office of L.E.K. Consulting and co-leads their MedTech Practice, says while hospital leaders are increasingly looking for more than a strong return on investment. He explains that healthcare leaders making large medical equipment purchases now will want more than a promise that the item will save time or improve processes or outcomes—they’ll want proof.

“[Healthcare leaders] will want the vendor to show them a similar 135-bed hospital that has achieved the same kind of value-based outcomes the product claims to achieve and they are hoping for,” he says. “More forward-thinking vendors will be working toward quantifying the impact in terms of hard- and soft-costs on their products. And more forward-thinking hospitals are going to expect some risk-sharing if a product that touts certain efficiencies doesn’t produce.”

Whether vendors step up to provide more than just promises remains to be seen. However, at least for now, both the HealthLeaders and L.E.K. Consulting reports seem to indicate that 2011 won’t be a big year for capital spending—which means I’ll be revisiting this topic again in 2012 to see what the future holds for hospitals.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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1 comments on "What Lies Ahead for Capital Expense Budgets?"


Linda Ollis, FACHE (3/8/2011 at 10:57 AM)
Hospitals and healthcare providers are certainly not exempt from the effects of an economic slowdown and protracted recovery from the recession. In fact, we need to be aware of another trend already developing in the consumer/demographic segment [INVALID] that of the widening gap between the have's and the have-nots. Decreased capital spending by smaller hospitals and safety-net hospitals who have assumed an increasing share of the underinsured and uninsured will place them at even greater risk of failure. And this risk, at a time when baby boomers are poised to make even greater demands on the healthcare system is one we should take seriously. Congress should stop blocking the progress on healthcare reform as it's clear how dire the situation will become due to inaction.