ECRI Blog

To make more effective and efficient decisions regarding budgeting and managing medical equipment, it’s essential that healthcare organizations focus on capital budgeting, medical equipment selection, and recall management. 

Capital budgeting is the process of allocating funds for the purchase of long-term assets, such as medical equipment. The goal of capital budgeting is to ensure that a healthcare organization has the funds necessary to purchase needed equipment and can do so while maintaining a balanced budget.  

Equipment selection is an area of critical focus during the process. To select the right equipment, healthcare organizations should understand the benefits and drawbacks of the various different types of medical equipment.  

We all know the adage, the squeaky wheel gets the oil. It can even apply to your hospital’s capital budget planning exercise.

Capital requests include both replacement items for existing equipment and new or additional purchases, and the process tends to move quickly. Unfortunately, the loudest voices usually get the bulk of the available capital dollars, and smaller departments often are left out.

A Predictive Replacement Plan, or PRP, can streamline this process and provide objective recommendations regarding the replacement of capital equipment in a systemic manner.

A PRP is a deep dive into the capital medical inventory of a health care institution which is then used to develop and coordinate an unbiased 5 or 10-year replacement schedule, based on multiple objective factors, including organizational goals and patient needs. It is not based solely on the age of the equipment or the subjective desire or influence of a department director or physician. A PRP is based on multiple objective factors including device recall data, OEM support, part availability from OEM and aftermarket sources, changing technologies, device utilization, and clinical needs of the clinician.