Digital mammography brightens outlook for 2014 capital budgets

In a new report from research firm MedPanel, capital spending is expected to slow in 2014, with just 30 percent of hospitals planning to increase capital expenditures and 18 percent planning a decrease. The firm surveyed US hospital CEOs and CFOs to understand capital expenditure trends in the market as reimbursement rates continue to be cut and uncertainty stemming from the Patient Protection and Affordable Care Act (PPACA) affect the market.

Recent trends have increased pressure on hospital budgets, and executives must carefully consider large medical equipment investments. "Large purchases can definitely bolster both physician and patient recruitment to a hospital, but with reimbursement rates falling and an emphasis on preventing readmission in the Affordable Care Act, there is the real danger that hospital revenue may decline and these purchases may need to be delayed,” says Lauren Augustine, a research manager for MedPanel.

Key findings from the new report, 2014 Hospital Capital Expenditures: Hospital CEOs and CFOs Detail Spending Priorities in Robotic Surgery, Radiation Oncology and Digital Mammography, include:

·        Robotic surgery: The vast majority of hospital CEOs and CFOs expect stability or growth in procedure volumes using robotic surgery systems, driving expected purchases of more systems in 2014.

·        Radiation oncology: 74 percent of surveyed hospitals offer this service, and the majority of CEOs and CFOs expect procedure volumes to increase in 2014. Current linear accelerator users are the most likely to invest in new equipment, though a portion of the hospitals who don't own this type of equipment do plan to purchase it in 2014.

·        Mammography: Upgrading equipment and attracting patients to increase market share have most impact on digital mammography purchasing. A strong percentage of hospital executives also report an intent to purchase a 3D mammography system in 2014, in an effort to keep up with technological improvements.

In light of the uncertainty that new payment models under the PPACA has created, many hospitals and health systems are curtailing capital spending plans for 2014. This new report echoes other surveys from last fall, such as the Premier Healthcare Alliance’s Fall 2013 Economic Outlook, which found that growth in health system capital spending in 2014 is expected to be below 2010 levels. That report found that only 36.8 percent were projecting an increase in capital spending in 2014, down from 42 percent in 2010.