COVID-19 and Its Impact on Healthcare Financing

Last month, we shared a blog post that addressed the pandemic’s impact on the technology industry, and how it shook up the way tech equipment, software and services are acquired.

In this post, we will take a look at its impact on the healthcare industry, and the differences in how it has impacted sectors from dental equipment to ventilators.

The past few months have presented myriad new challenges for businesses and organizations. For some hospitals, one of the earliest challenges during the pandemic was how to accommodate the influx of patients. They were faced with shortages of beds and ventilators, ambulances were in such high demand that non-ambulance vehicles were outfitted with equipment to provide patient transports, and there was hardly enough personal protective equipment (PPE) to go around.

Meanwhile for other hospitals and healthcare facilities, COVID-19 cases did not materialize, thankfully. However, elective and non-emergency procedures were halted. Routine dental, eye and wellness exams were postponed. And this shutdown of routine care negatively impacted revenues and staffing.

Healthcare companies rushed to produce COVID-19 test kits and pharmaceutical companies pivoted to quickly begin working on possible vaccines.

When it came to equipment, there was a stark shift in demand. At DLL, many of our partners and their customers experienced rapidly shifting budgets and equipment needs. Flexible financing options have been able to address changing needs by supporting the rapid deployment of urgently needed assets as well as preparing for an influx of future procedures as the economy reopens – all while minimizing upfront capital constraints.

A recent McKinsey article noted that companies that look to create long-term value rather than seeking short-term advantages will emerge the strongest after the pandemic.

“Right now, many hospitals and healthcare facilities are choosing to hold off on replacing aging equipment unless it’s broken,” said John Sparta, president of the Healthcare and Clean Technology Global Business Unit at DLL. “A desire to keep more cash during difficult economic times is a common and logical approach. However, financing can actually save organizations from paying for costly repairs on aging equipment and allow them to pay for new equipment over time – all while preserving capital.”

Extended payment terms have become a popular solution, allowing hospitals to quickly acquire critical equipment now and begin paying later. As more facilities reopen and procedures ramp up, taking advantage of extended payment terms can ensure equipment and disposables are stocked and ready as routine care resumes. If an organization is confident that volume will recover in the near term, this is a great option that gives customers payment flexibility while allowing a vendor to get paid immediately.

At DLL, we remain dedicated to our partnership approach and proud to support our partners and their customers throughout these challenging times. If you have any questions about how financing can support your current healthcare and medical equipment needs, or the needs of your customers, please contact us.