A financial analysis is critical before buying testing systems equipment. It allows the financial decision-makers to make necessary, informed decisions. The essential components of the economic analysis are to perform a cost analysis that includes an operation cost study, the break-even point, operating leverage, and return on investment indicators. It is best to determine the operating cost of current testing practices and the operating expenses of each prospective instrument being considered. The vendors can help provide some of the data needed for a study but should not be counted on to give an unbiased cost analysis. Operating leverage is an essential measure of the risk of the purchase. The break-even point is an important indicator of when a test pays for itself and becomes profitable. Payback, net present value, and internal rate of return are return on investment indicators that reveal the financial feasibility of a purchase.
The majority of hospitals are paid primarily through managed care systems. In a managed care setting, such as a health management organization (HMO) or patient-provider service organization (PPO), that includes patient care services (including lab) as part of a prepaid patient payment plan, profitability is most likely not a factor. Since revenue is included in the patient payment plan, the primary considerations in capital equipment acquisition will relate to the instrument's initial cost and operating cost. Further, will the new instrument improve the efficiency and quality of patient care, resulting in better outcomes and less time spent in the hospital? Some hospitals have extensive outpatient services that are based on service fees. In this case, determining the financial indicators such as break-even point, operating leverage, payback, net present value, and internal rate of return would be helpful.
