Today vs tomorrow: thinking about lifetime costs in NHS purchasing.
When it comes to making procurement decisions within the NHS, cost is quite rightly a key concern. Any new purchase needs to be as cost-effective as possible in order to help the healthcare sector do more with less and cope with the challenges of an aging and growing population – and that includes new technology purchases.
The trouble is, whether we’re talking about hardware or software, measuring how cost-effective a new piece of technology is can be more difficult than it first seems. To gain a truly accurate picture of the cost of a new purchase, there are three key areas to consider.
What needs adding on?
Frequently, additional costs need to be layered on top of the headline price. Installation of new technology, whether hardware or software, often incurs additional expense both in terms of the initial setup, and integration with the existing technology portfolio. This can involve purchasing brand-new interoperability platforms or even replacing existing tools and applications outright. Specialist third parties may need to be brought on board to carry out this work.
Then there’s staff training to consider, particularly when a whole new operating system or vendor has been selected. Such training may involve both an up-front cost and cost incurred by taking staff out of normal duties. Or, in the instance of software, there may be a need for additional modules which are not part of the core, basic deployment.
Predicting such additional costs accurately can be difficult, but healthcare organisations can go a long way by asking their supplier to talk them through every stage of deployment, from preparation, through installation to ongoing operation.
Are there ongoing charges involved?
Technology deployments can easily incorporate unavoidable ongoing charges. Software, for example, may incorporate ongoing subscription or licensing fees for a certain number of users. Hardware, on the other hand, may be tied to very specific ongoing maintenance, tests and upgrade charges in order to remain compliant.
Whilst these costs should, of course, be clarified as part of the initial proposal, they can all too easily be hidden away in the small print, or not accurately modelled as part of the organisation’s ongoing growth plan. A software platform with a high cost per user license, for example, might quickly become cost-prohibitive if the organisation knows that the relevant team is going to double in size over the coming year. A piece of hardware that requires routine maintenance after performing a certain number of operations might be cost-effective at current levels of demand, but if the hospital’s catchment area is set to grow dramatically, it might quickly become a drain.
What is the predicted lifespan of the technology?
Having to replace an expensive piece of technology after a relatively short period of time can be the costliest problem of all. Just as consumers are advised to invest in one or two top-quality, long-lasting investment pieces of clothing, so healthcare organisations are advised to remember that short-term purchases may rapidly become costlier in the long-term.
On the hardware side, this means considering factors such the materials used in composition, the level of detail and quality on the finish, and the ease and cost of replacing individual components as opposed to the entire piece of kit. Many pieces of hospital equipment, including mobile screens and carts, rely on an internal battery in order to operate, with the useful lifespan of the equipment therefore relating directly to the battery life. A higher-grade piece of equipment, like those produced by Howard Medical might be more expensive upfront, but if it lasts for years longer than a cheaper alternative, then ultimately it is likely to prove a less expensive choice.
A day or a lifetime?
All of these different cost models are a reminder that the price of something today is very different from the cost of something over a lifetime.
At Distec, we take the long-term view necessary to ensure the most cost-effective technology deployments. By choosing our products, you are investing in medical equipment designed to last.