Overcoming Barriers to Subscription Models for Medical Equipment in Healthcare

The healthcare landscape is evolving, bringing changes to how hospitals and care teams procure and manage medical equipment.

Traditionally, there has been a reliance on ownership models, where equipment is purchased outright. However, subscription models – such as – equipment leasing, and managed services – are gaining traction across various sectors of healthcare, from software solutions and IT services to consumables, maintenance, bed management, and training services.

Subscription models are starting to make inroads in areas like medical imaging, clinical diagnostics, and patient monitoring. However, these pricing models are still far from the norm for medical devices, and significant barriers remain before they become more widespread.

As hospitals and care teams explore these emerging models, they must weigh both the perceived benefits and potential barriers. Below, we examine these key factors:

Perceived Benefits of Subscription Models:

Hospitals and care teams exploring subscription models generally cite several key benefits, particularly around partnership, financial flexibility, and technical support:

One of the most compelling advantages cited by clinical teams is the potential for a deeper partnership with the vendor, allowing them to focus on patient care rather than system maintenance or software integration.

“We see subscription-based models as a partnership with the vendor. It's not just about buying equipment; it’s about working together to achieve the hospital's goals and ensuring we’re using the technology to its fullest potential.”

Financial constraints drive the shift to Subscription models, as large ownership model budgets can delay system acquisitions. Subscription-based models avoid hefty upfront costs and offer predictability, especially in areas like IT, radiology, pathology, and bed management.

“One of the biggest benefits is addressing our challenge of securing large capital budgets. A subscription model could make budgeting easier and help us plan more effectively.”

Clinical teams benefit from the subscription model by offloading technical management to vendors, easing strain on internal Technical Service and IT resources, especially in software integration and cybersecurity. With vendors handling maintenance, hospitals and care teams can ensure equipment stays updated and optimized for patient safety and care quality.

“With IT and software integration becoming more complex, it’s crucial we have the vendor’s expertise on our side to address these areas proactively.”

Clinicians appreciate knowing that they will always have access to the latest technologies with subscription models. This ensures that they are leveraging the most advanced systems for patient care, without the worry of outdated equipment. Moreover, subscription models provide an opportunity for standardizing technology and clinical workflows, leading to a more consistent user experience across departments. As one clinician put it:

“Knowing that all our systems will be up to date and optimized is a huge benefit. We’re focused on improving patient care, and having the latest technology plays a key role in that.”

Subscription models offer the flexibility to scale equipment and services according to the hospital’s needs, allowing them to adjust based on priorities and budget constraints.

“Subscription models offer the flexibility to scale up or down as our hospital's needs change. We can shift resources to areas that need it most without being locked into rigid budgets.”

Perceived Barriers to Subscription Models:

While the benefits of subscription models are clear, several perceived barriers that need to be addressed before they can be fully embraced by hospitals and care teams:

Finance teams may worry that vendor support could surpass current maintenance and equipment costs, and that subscription contracts could become more expensive over time, raising concerns about long-term financial impact.

“We need to be cautious about the cost of subscribing. If the price for vendor support is more than what we’re currently paying, it might not be worth it.”

Many purchasing processes, budgets, and tenders are already structured around ownership model spending, transitioning to subscription models could disrupt long-standing workflows.

“Our purchasing and budgeting processes are still set up for ownership models. Changing to a subscription model would require rethinking how we do things, and there’s limited resource available for that right now.”

While partnering with a vendor for technical support and system optimization can be appealing, hospitals already have their own Technical Service and IT departments. Hospitals and care teams also prioritize access to cutting-edge innovations and the ability to choose the best solutions. Committing to a single vendor long-term could restrict flexibility, hindering the adoption of new technologies.

“We have a strong internal team that’s already managing much of our equipment and technology. The idea of outsourcing this responsibility feels like we would lose control, especially if the vendor has the final say in updates or changes. We want to be able to choose the best technologies as they emerge.”

For hospitals and care teams, data security is paramount.

There is a deep concern about providing external vendors with access to patient information or operational data, particularly when it comes to meeting regulatory standards (such as HIPAA in the U.S.) and ensuring patient confidentiality. They need assurance that data protection protocols are clear, that they retain full control over who can access sensitive data, and that robust security measures are in place to prevent vulnerabilities. Vendors must demonstrate their commitment to data privacy, detailing how they handle encryption, access control, and compliance with industry standards.

“We can’t afford to lose control over our data. With sensitive patient information and operational data at stake, any move to a third-party vendor for system management needs to come with guarantees on data security and clear boundaries on who has access to what.”

How Vendors Can Address These Concerns:

To successfully market subscription models to hospitals, medical equipment vendors need to address the perceived benefits and barriers head-on:

• Transparency and Clear ROI: Vendors should clearly demonstrate how subscription models can save money in the long run, help hospitals avoid large ownership model outlays, and provide predictable, transparent costs.
• Building Trust: To address concerns around trust, vendors should emphasize their track record for reliable service and transparent pricing. Offering a trial period or pilot program can help hospitals and care teams feel more comfortable with the transition.
• Flexibility and Support: Offering flexible contracts that allow hospitals to scale up or down, along with comprehensive service-level agreements (SLAs), will reassure clinical teams about the quality of support they’ll receive.
• Data Security and Compliance: Vendors must ensure that their systems meet all relevant data security and regulatory compliance standards. Clear explanations about how data is protected and managed can ease concerns about outsourcing to third-party vendors.

As hospitals and care teams continue to explore the benefits and barriers of subscription models, it's clear that subscription-based services are gaining momentum across the healthcare sector. While these models are still not the norm for medical devices, they are increasingly seen as a viable solution to the challenges of managing costs, optimizing equipment, and staying at the forefront of technology.

To ensure you’re ahead of the curve in this evolving landscape, it’s essential to understand the nuances of subscription models and proactively engage with hospitals and care teams to overcome concerns. The future of healthcare procurement is moving toward flexible, subscription-based solutions—are you ready to lead the way?