Acquiring the latest medical equipment is a key component of any successful plastic surgery practice growth strategy. However, medical equipment costs can quickly eat into your practice’s operating capital. For this reason, many practice owners weigh the benefits and drawbacks of leasing vs. buying medical equipment. Here, we break down some of the pros and cons of each scenario and help you decide which option could be right for your plastic surgery practice.
Pros and Cons of Medical Equipment Leasing
Leasing medical equipment allows plastic surgery practices to use the latest technology without the large upfront costs of purchasing new equipment. This option comes with several pros and cons:
Pros of leasing equipment:
- Lower upfront costs. Leasing medical equipment reduces the initial financial burden that comes along with buying new equipment, making it easier to fit into limited budgets.
- Fixed expense. Similarly, monthly lease payments are predictable and can be easily worked into your practice’s budget.
- More flexibility. As medical technology continues to advance or patient needs change, leasing allows you more flexibility to adjust your equipment as needed without committing to a large purchase that will inevitably become outdated down the road.
Cons of leasing equipment:
- Higher long-term costs. While monthly payments can be more manageable than paying upfront, leasing can end up costing more over time than purchasing outright.
- No ownership. At the end of the lease, you don’t own the equipment unless you negotiate a purchase option.
- Contractual obligations. Breaking a lease early may lead to penalties, depending on the terms of your lease.
Pros and Cons of Buying Medical Equipment
Purchasing medical equipment outright or through financing is a long-term commitment that can offer significant benefits. However, this option also comes with some drawbacks.
Pros of buying equipment:
- Cost-effectiveness. Although upfront costs will be higher when you purchase equipment, you will generally pay less in the long run for the same equipment than with a lease.
- Tax benefits. Purchasing medical equipment may qualify your practice for depreciation and other tax benefits, adding to the cost-effectiveness of this option.
- Ownership. Once purchased, the equipment is yours, allowing for greater control over its usage and resale value.
Cons of buying equipment:
- High upfront costs. Buying medical equipment typically requires a significant initial investment, which may strain your practice’s finances.
- Less flexibility. Medical technology advances quickly, so purchased equipment may become outdated just as quickly. This can give your practice less flexibility to adapt to rapidly changing technologies or patient needs.
- Maintenance and upkeep costs. Ownership means you are responsible for the costs of repairs and upkeep.
Tips for Managing Medical Equipment Costs
To manage medical equipment costs effectively, build these expenses into your long-term growth strategy and prioritize investments with strong ROI potential. Partnering with private equity groups like Olympus Cosmetic Group can help to offset upfront costs, making it easier to stay ahead of the latest plastic surgery trends and technologies.If you would like to learn more about our invite-only network of some of the most elite plastic surgery practices nationwide, we invite you to contact us online to express your interest.
