Graduate Management Project: The Capital Equipment Acquisition Process at The Johns Hopkins Hospital Evaluating Acquisition Strategies Through Financial Analysis
AIR FORCE INST OF TECH WRIGHT-PATTERSONAFB OH
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Academic medical centers face a unique challenge when deciding whether to acquire new technology. With increasing reliance on medical technology for diagnostic and medical treatment in the marketplace, academic medical centers continue to make large investments in capital equipment while simultaneously attempting to reduce costs. More stringent technology assessments are now employed by many institutions to ensure capital dollars are used to purchase necessary and cost effective equipment. The purpose of this paper is to first develop an equipment evaluation process at The Johns Hopkins Hospital which considers both clinical and financial factors when allocating capital dollars to acquire equipment. Once the decision to acquire the equipment has been made, the next step is to select the most financially beneficial method of acquisition. The second goal of this project is to provide decision makers with a spreadsheet which will compare the costs of lease versus purchase financing to help them select the least expensive option.
- Economics and Cost Analysis