Paying for $137,000 worth of endoscopy equipment one case and $69 at a time made it a whole lot easier for the Millennium Surgery Center in Bakersfield, Calif., to take on the GI doc who wanted to bring his cases there.

"Absolutely," says Kathleen Allman, RN, Millennium's chief operating officer. "It eliminated our risk, alleviated our worry and left our money in the bank. This is a really good way to start a new service line when don't know how many cases you'll be doing."

Millennium negotiated a cost-per-case deal with Olympus America in 2001. For no money down, Olympus outfitted an endoscopy suite from top to bottom. Millennium agreed to pay Olympus $69 per GI case, a figure based on three numbers:

• the cost ($137,359.80) of the equipment,
• the length (24 months) of the deal and
• the number of times per year (960 cases) the surgery center thought it would use the equipment.

The equipment's cost and the deal's length are fixed numbers, but the number of procedures you commit to is the great variable that can make or break a cost-per-case program. Your monthly payments are linked to your procedure volume. If you overestimate based on surgeons' (inflated?) projections and fall well below those projections, your per-procedure rate will balloon and the term of your deal could expand. But if the volume is what you'd predicted, facility managers tell us that such deals are great values for their centers and novel ways to add expensive capital equipment.

And if you're conservative in your case projections and wind up doing more cases than you'd thought, your per-procedure rate will look especially attractive. Ms. Allman had estimated she'd host 40 GI cases per month. Things started slowly, but in time two GI docs were doing 200 per month, five times as many as she'd predicted.

Access to technology
Cost-per-case financing is just another way of looking at a monthly payment. You're taking the anticipated number of procedures you do on a monthly basis and dividing the lease payment by that number of procedures.

You may also be familiar with financing programs that let you pay off a capital equipment lease by purchasing a predetermined volume of disposables to be used with the piece of equipment every month. You determine your cost for each disposable item by dividing the amount of the capital equipment by the number of disposables you'll use in a month. For example, rather than purchasing a BIS monitor from Aspect Medical for $8,900 and paying $17.50 for sensors, you can amortize the lease of the hardware over many years by paying a higher, adjusted fee for the sensors ($22, for example) based on the number you use per year.

"For those facilities that don't have capital budgets available, you can finance over time instead of putting an outlay up front," says Paul Manberg, PhD, vice president of clinical, regulatory and quality assurance at Aspect Medical.

Then there are mobile equipment services that deliver a piece of equipment to your facility for one-time use or supply a complete, prepackaged surgical program - everything from the equipment, disposables, supplies and personnel - on a pay-as-you-go basis. When Rockingham Memorial Hospital in Harrisonburg, Va., performs photoselective vaporization of the prostate for the treatment of benign prostatic hyperplasia, it rents the GreenLight laser system, paying $775 in equipment rental fee, $875 in disposable supply fees and a $25 technician fee.

"If you have a heavy urology practice with low cancellation rates (the vendor charges a $475 fee if it receives less than 24 hours' notice when a case cancels), you may make out with reimbursements," says Lori Robertson, RN, assistant director for perioperative services at Rockingham Memorial.

Equip center with very little outlay
From phaco machines to cautery units to orthopedic towers, nearly every big-ticket item in the five-year-old Susquehanna Valley Surgery Center in Harrisburg, Pa., is paid for on a per-case basis.

In 2001, when the ASC added cataracts, it financed $114,000 in phaco equipment and supplies from Alcon for $62,000 over five years, amortizing the equipment by paying a slightly higher price for Alcon's Custom-Paks and IOLs. "If we had to do it over again, we wouldn't do it for five years," says nurse manager Becci Troutman, RN, CNOR. "We've added doctors with different preferences, and IOL technology has changed. Three years might have made more sense."

Susquehanna last year renewed its three-year deal with Olympus on GI cases, lowering its original $61.63 per-case figure (including repairs and maintenance, and based on 3,420 procedures over 36 months) to $56.48. The ASC received credit for trading in its six old scopes (three colonoscopes, three EGD scopes) for six new ones.

Key to making these deals work is having a commitment from your docs. "You have to feel good about your projected volume," says Ms. Troutman. "A lot of our physicians are investors," adds administrator Deb Leib, CASC. "That helps a lot."