Watch out for 5 used equipment pitfalls

The money you save might be your own

by Thomas W. MacVaugh

There are a number of potential pitfalls and faux pas commonly experienced by even seasoned resource and materials managers when acquiring used equipment. Although any of these can be incurred with any equipment transaction, they are most commonly encountered on the high-end/high-technology side.

Pitfall No. 1: Know your source

Although the vast majority of purveyors are reputable sources the buyer must be wary on every transaction. Have you dealt with this source before? Have you checked their references? Have you checked their financial viability? How quality-focused are they? Where do they get their equipment? From reputable sources such as medical centers or manufacturers, or do they source it through unknown brokers?

Pitfall No. 2: Know your item

Due diligence must be followed on used equipment even more carefully than on the purchase of new equipment. What is the real condition of what you are buying? Has it been in service recently or has it been subjected to the abuses of long term storage? What kind of a physical environment has it come from? Was it in dry storage, or was it submerged in [Hurricane] Katrina or otherwise exposed to fire or other harsh environments? How reliable was the equipment in its former home? Is it worn out? Why was it traded in? What is the maintenance history? (i.e., get a "CarFax"-type service history, or check it through the manufacturer’s service records, reliability reports from such organizations as ECRI Institute, etc.)

Pitfall No. 3: How was it uninstalled?

You should get evidence on both who and how the equipment was uninstalled from its former base. Was it done by factory-authorized technicians or by day laborers? Was the integrity of the equipment kept intact (e.g., cables retained, housing undamaged, rigged appropriately, etc., or was it yanked out by the roots and shoved onto a trailer to be hauled over to you)?

Pitfall No. 4: Is the technology really what you want?

Unless the buyer is lucky and finds just what is needed from another facility that has fallen on hard times, chances are what you are buying is well-worn and being disposed of due to technological advances. Do you really want to rush into a transaction for a used third-generation whatever when rapidly changing technology advances may make the fourth or fifth generation available in the market within the next six months? Just look at what happened to multislice computed tomography units – many mid-range-slice [16-, 32-, 40-slice] CTs were purchased and were not even installed when 64-slice and even higher units came into the market within a 12-to-18-month window.

Pitfall No. 5: What are the real costs?

Usually the motivation to acquire used equipment is economic. You need the extra device to meet volume demands or competitive pressures or just to appease the docs, so you try to buy it "on the cheap." Stories abound with seasoned materials managers who thought they were getting a bargain price (which they probably did) but then were burned on the hidden costs – uninstallation fees, rigging, transportation, construction/renovation, reinstallation, recertification, retraining, etc.

Forewarned is foresight

Be sure to look at a used equipment transaction as thoroughly as you examine a new piece of medical technology.

• Define your true needs/specifications/existing environment and facilities features, etc.

• Know your potential source(s) and make sure they are qualified and capable of meeting your needs – financially, physically, quality, etc.

• Know your market and technology environment. Scene the technology using experts, such as ECRI Institute and/or do some "Horizon Scanning" for emerging technology as performed by Hayes or other qualified health technology assessment firms.

• Examine the particular device very carefully to know its true condition, as well as it potential need for upgrades, retrofits, etc.

• Look at the transaction from a total cost perspective. Incorporate realistic estimates for the device, the logistics involved and the potential staff (yours and vendors) that will be involved in making it a useful asset in you facility.

It is not just caveat emptor (let the buyer beware) that matters. It is being fully aware when evaluating one of these transactions.

Thomas W. MacVaugh, BSBE, MS, is Regional Supply Chain Officer at Lourdes Hospital/Ascension Health, Binghamton, NY.

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