Management Essentials

The Certified Pre-owned Route

By Farrell “Toby” Tyson, MD, FACS

In addition to ophthalmology, one of my other loves in life is cars. The problem? They are seldom cheap and require maintenance and storage. I have found that sometimes it is much better to purchase a certified used automobile over a brand new one—a decision process that may also be applied to ophthalmology.

Do Your Homework

Purchasing equipment for an ophthalmology practice, like purchasing a car, requires technical knowledge, negotiation and time. Initial research is a must for all purchases. Familiarize yourself with your needs and wants, as well as the availability and performance of competing equipment. Once a desired acquisition has been identified, it is time to determine the best way to obtain it.

While many practices think purchasing new equipment is advantageous, several companies have begun “certified pre-owned” (CPO) programs comparable to those for used vehicles. The programs usually involve refurbished items that were either floor models or field demos. Sometimes the company simply has too much inventory and designates new items as refurbished to help move merchandise at a lower cost without affecting the perceived retail value of a new product.

One of the advantages of CPO cars or equipment is that they are usually backed with an equivalent or greater warranty than the original new warranty to build buyer confidence in the used product. Several times I have seen a new car with only a three-year/30,000 mile warranty, but the same model with only a few thousand miles on it may have a five-year/100,000 mile warranty. There is usually an option to negotiate or purchase an additional warranty if it isn't already standard. Either way, you are usually financially ahead when purchasing used.

Even computers for your office are now available at heavily reduced pricing from different manufacturers. Various Web sites can easily cut your computer cost in half. The computers come with standard warranties and additional warranties can be purchased. Many of these sites even allow for further customization of the systems. Purchasing a refurbished computer instead of a new one allows you to either purchase a more powerful unit for the same money or purchase two similar units for the price of a new one.

Buyer Beware

Certified used programs differ from vendor to vendor, so be sure to read the fine print. Some will provide longer warranties while others offer better financing terms. Vendors usually have more flexibility on used equipment since there is more margin to play with, allowing 30/60/90/120-day payment terms so the equipment can start paying for itself while you are paying it off. Just as cars can have a subsidized lease or financing, the same can be seen on medical equipment, especially if the older model is one that the company is trying to move.

In addition to purchasing directly from the manufacturer, there are several firms that deal in used ophthalmology equipment. While most companies would rather not deal with warranty issues, several reputable ones are willing to stand behind the equipment they sell. Make sure all stipulations are documented on your bill of sale. Just like your medical records, if it is not in writing, it does not exist.

Your relationship with industry and equipment reps can make or break you. If you treat them well and give them time and respect, they will do the same for you. These relationships develop over time but give the advantage of having reps inform you when special allocations or deals may be available.

Taking advantage of the refurbished, show model or certified pre-owned deals will allow you to equip your office with top of the line equipment for a fraction of the cost. With the money saved, you most likely will be able to purchase that CPO sports car you were dreaming about without compromising on how your practice is equipped. Consider all purchasing strategies so you don't delay any necessary buys to maintain the leading-edge technology required to run the best practice in your area. OM

Farrell C. Tyson, MD, FACS, is a refractive cataract/glaucoma eye surgeon at the Cape Coral Eye Center in Florida. He may be reached at tysonfc@hotmail.com.