Clip and Copy: Making sure new equipment pays off

Use this form to calculate whether an instrument, machine, or other purchase will pay for itself.

Whether you're in the market for office equipment or a clinical instrument, you want the new item to pay for itself through the time it saves or the revenue it generates.

"You might be looking to replace basic items, like an aged ECG machine or telephone system, or deciding whether to invest in something extra, such as a document scanner or a cosmetic laser," says Keith Borglum, a consultant with Professional Management and Marketing in Santa Rosa, CA.

The form below, from Medical Practice Forms: Every Form You Need to Succeed, by Borglum and his colleague Diane M. Cate, helps you determine whether a potential purchase is cost effective.

Cost-effectiveness, Borglum points out, is calculated in profits generated as a result of the new item and physician and/or staff labor saved. "In addition, the item might increase reimbursement, add services," Borglum notes.

If you purchased equipment within the past two years or plan to do so next year, meet with your CPA now to see if you can take advantage of the 2003 tax laws related to these buys. First-year expensing deductions have been increased from $25,000 to $100,000, and the bonus depreciation deduction has been increased from 30 to 50 percent for business equipment purchased after May 5.

You can customize the form for additional variables, like adding a document sorter to a copier purchase.

—Gail Garfinkel Weiss
Senior Editor

To view the form in Word you must have Word 2000 or better. If you don't have this program you can download the free Microsoft Word 97/2000 Viewer. (You cannot edit an open document in Word Viewer. However, you can copy text to the Clipboard to paste it in other applications).

Other forms and patient handouts are available in the Clip and Copy section of our Web site at www.memag.com .

Gail Weiss. Clip and Copy: Making sure new equipment pays off. Medical Economics Aug. 8, 2003;80:86.