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Financial leases in the hospital industry. An analysis of California hospitals.

Using California hospital data, this study examined the extent to which capital leases displace debt in the hospital industry. Moreover, it analyzed how hospital and financial variables affect utilization of lease financing. In contrast to the theoretic belief that lease financing displaces debt financing, the results showed a greater use of debt with leases. The study also found smaller, free-standing facilities with a greater investment in plant and equipment employed the lease option.

California

Purchasing medical imaging equipment.

This report presents a summary of the steps and factors involved in the purchasing of medical imaging equipment. Although the range of variations in this process is broad, some fundamental common factors are useful to consider before initiating the acquisition process.

Capital Expenditures

Congregate living for the mentally ill: patients as tenants.

The authors describe an apartment-living project for chronic mental patients released from the Hillside Division of the Long Island Jewish-Hillside Medical Center. The apartments, which are rented by the hospital and sublet to the patients, are located in modern, well-maintained high-rise buildings within commuting distance from the hospital. To avoid creating a psychiatric ghetto, the project rents no more than two apartments in buildings of a hundred or more units. The hospital was able to rent the apartments by assuring the landlords that the hospital would be a financially responsible tenant and that staff would be in continuing contact with the patients, would be available to the landlords if problems arose, and would remove troublesome tenants. Some of the problems encountered by the patients in the program are described, as are guidelines for selecting those who have a reasonable chance of benefiting from such a program.

Adult

[Charges on leases].

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Financial Management

Laser technology planning.

Lasers continue to be a highly useful and important surgical tool, and, in today's competitive healthcare environment, they are also an effective marketing tool. The public perceives lasers to be "high-tech" instruments, associating them with excellence of care. And the availability of state-of-the-art equipment such as lasers is often critical to medical staff recruitment. However, lasers are not universal surgical tools, as some proponents suggest. They are costly, and other less expensive technologies are acceptable and sometimes more desirable for certain procedures. Also, marketing reasons alone cannot justify laser acquisition. Faced with new, more restrictive federal regulations for Medicare reimbursement of capital expenses, hospitals need effective technology planning more than ever, particularly when planning for such "high-ticket" items as lasers. They can no longer afford to acquire lasers based on the perceptions of the public or the demands of one or even a few physicians; poor planning in the past has caused many new lasers to collect dust from low utilization. (ECRI's 1991 user survey on general-purpose surgical lasers found that, on average, hospitals use lasers in less than 5% of their total surgical procedures.) Hospitals need to approach the acquisition of laser technology cautiously to ensure that the appropriate equipment is obtained, that it will be well utilized for procedures in which it offers a demonstrable improvement over alternative technologies, and that it will also conform to the overall strategic plan of the institution. The purpose of this article is to provide guidance on the technology acquisition process, whether a hospital is acquiring its first laser or has a well-established laser program.(ABSTRACT TRUNCATED AT 250 WORDS)

Capital Expenditures