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When do I need to replace my medical equipment?

The question of when to replace your medical assets is not an easy one and there are a lot of factors to take into account. For every piece of equipment there is invariably a fine balance between annual maintenance costs, what the item would be worth if it was sold and the price to replace the item new.

A medium-sized hospital of around 200·400 beds will often possess more than 20,000 medical devices, with a lifespan per item on average of 5-10 years. Obviously, equipment is not replaced all at the same time, which means that there is a constant flow of equipment coming into a hospital and a similar sized river going out. This is, however, a very generalised estimation, as bed count is not a good rule of thumb to estimate the value of medical assets and establishment possesses. Take into account specialist clinics like eye hospitals, for example, that have no beds, but a lot of high value equipment.

The tipping point

A fine financial threshold resides between; the item costing you more to repair than it would to buy new and sell the old. That is assuming that your health care organisation has the funds and the inclination to regularly replace medical equipment. Here are a few red flags to look out for that indicate your organisation should start to think about replacing your device:

Age: Based on regulations and guidance, you will have guidelines on when you should start to replace your equipment and this will differ with the type of device.

Maintenance cost: If your annual maintenance costs exceed 15% of the initial purchase price, then this is a good indicator that the item is becoming inefficient. Preventative Product Maintenance Contracts are usually renewed every 3-5 years and if you notice that your provider is negotiating a higher rate, then this usually indicates that they estimate a longer service time for one of your items. It is not unreasonable to discuss with them which item it is and whether they recommend its replacement.

Frequency of repair and down time: If your device is disrupting patient services with the time that it is out of service or the amount of errors it is creating during service, it can start presenting a danger to your patients and it is time to think about other options.

The model stops being manufactured or replacement parts stop being made: Good quality models of medical devices enjoy longevity in the market, as a brand’s reputation is built upon its equipment being known for being ‘a workhorse’, but if that model stops being produced then there is likely to be a sudden depreciation in the value of the item. If this is of no importance to your organisation, you will still have to bear in mind the consequences a few years down the line. Needless to say, if you cannot obtain the parts to keep your equipment being maintained, then the item is destined for obsolescence. Bear in mind that you may still get half a decade of useful life out of the item before it heads for the WEEE pile, so consider contacting a resale agent to make the most from your redundant equipment.


There are other factors to take into consideration when deciding that your devices are obsolete, including:

Equipment type: The type of device will have a direct effect on the general perception of when it should be replaced. Life support devices, such as; dialysis machines, defibrillators and incubators, are perceived to need replacing sooner, as they are critical to patient life and newer units offer greater clinical efficiency.

Equipment specification: For example, a 64 slice CT-scanner will obviously be preferential over a 16 slice CT, as it provides a direct diagnostic benefit and give a direct improvement on patient care.


In a private healthcare situation, it is also worth noting:

Brand values and marketing objectives of your healthcare organisation: It would be obvious to assume that these directly influence the spend allocated for new equipment; the higher the desired perception of the brand or the frequency that a competitor replaces their equipment, then the more frequently medical devices will be renewed to give the impression that the organisation is a market leader. However, more often than not private hospitals have a more relaxed approach to replacing their equipment as they don’t fall under the same guidelines as the national health service.


Forecasting and budgeting

It is important that you carry out a cost-benefit analysis for all of your assets. The merits of medical devices existing within an organisation’s structure should be evaluated on the Total Cost of Ownership for a reasonable length of time, to be able to work out fluctuations and averages in costs; 5 years is a good standard term as a rule of thumb. Evaluating the cost of medical equipment over time will identify the total cost of operating the devices and how it affects profit in a healthcare organisation. Whatever the number of items that your organisation is in possession of, you should have a database of all your assets that contains all of the essential information for the assets, including; age, physical condition, service history and the annual costs of repair. Most importantly you should have estimated replacement dates in the calendar to be able to project capital expenditures over at least the next five-years.


Valuation and asset management software solutions

There are software-as-a-service systems on the market that can calculate how much your old medical equipment would be worth if sold it now and how much it would be worth if you sold it in X number of years. These systems are especially useful if you have to plan the management of a large number of medical assets, for instance if you are a private healthcare organisation or a lease company. However, if you only have a couple of items that you are replacing then any reputable medical resale agent will happily give you a free valuation of your items. As we are all aware, from the depreciation of items like motor vehicles the same amount of depreciation is not lost each yeah. A car is likely to depreciate more in the first few years and less as it is nearing the end of its life. Good residual value prediction software will give you a smooth curve. Beware of lease companies and medical asset resale agents that calculate depreciation in essence as a straight line, from price new to zero value at the end of its life. As long as the item is still working there will be someone out there willing to buy it.


Disposing of your medical devices

There are various options to consider when removing redundant equipment from site. Some manufacturers will happily buy back old equipment to keep the value of their new equipment high. Disposing of medical devices is not as simple as throwing the device in the skip, sending it to the scrap yard or putting it up on eBay when it is considered to be obsolete. As all electrical bio-medical devices have the potential to contain patient identifiable data and the data protection act of 2018 decrees that any potential for the data to be passed on must be removed. Even putting items in the skip, you will have to follow the Waste Electrical and Electronic Equipment recycling (WEEE) directives to make sure everything is accounted for. Items that could possible hold data have to have data wiping certification before disposal. It can be often perceived that it is too much hassle to dispose of equipment, however, this usually is due to lack of resources within the organisation. Even though your organisation may perceive the item to be obsolete, the item or its parts may still be of use to someone else. Many healthcare organisations from other countries cannot afford £60,000 for a brand-new ultrasound, but they are willing to pay £8,000 for your functional second-hand one; giving you funds that you can re-invest back into your patient services. In addition, selling your redundant medical devices through a resale agent removes the hassle of organising data wiping, WEEE disposal, removing the devices from site and presents your organisation with a cheque at the end of it all.