Lab vendors: increasing sales with smart financing

Sally-Anne Whybrow
5 June, 23

The rapidly growing diagnostics market represents a unique opportunity for laboratory technology vendors. Sally-Anne Whybrow, Healthcare Business Development Manager, Siemens Financial Services, looks at the sales enablement techniques giving vendors a competitive advantage.

The rise of community diagnostics

The UK is experiencing a big push for more diagnostic centres to tackle the backlogs caused by COVID-19, and to speed up access to hospital treatment and services. Most recently, the government announced 19 further diagnostic centres to serve communities across England, with 160 planned and 91 already in operation.[1] Unlike hospitals, which are typically located in or near urban centres, these facilities can serve the wider community and increase access to essential testing.

Since July 2021 community diagnostic centres (CDCs) have delivered over 2.4 million tests, checks and scans for a range of conditions. This activity includes Imaging (CT, MRI, x-ray, ultrasound), endoscopy (gastroscopy, flex sigmoidoscopy), physiological measurements (echocardiography, spirometry) and pathology (phlebotomy and point of care testing).[2] The latest government statistics report 11% of all diagnostic activity was delivered by CDCs in September 2022, with a view to reaching 40% by 2025.[3]

The demand for these services is clear and with further centres planned, a spike in equipment and technology to fit out the centres is expected. The majority of CDCs are using diagnostic equipment purchased in the last 12 months, and representatives from the Department of Health and Social have stated that “NHS England plans to equip CDCs with new facilities, including those located on existing National Health Service estate, through purchasing new equipment rather than upgrading existing equipment.”[4]

The opportunity for lab vendors

Alongside the scanning equipment required to operate a centre, a range of laboratory equipment will be sought after to support its operations. While essential lab services will still be required at acute hospital sites, CDCs are designed to relieve pressure by bringing services out into the community, at a site dedicated to performing diagnostic tests such as non-acute pathology. The complexity and volume of these tests have increased at individual laboratories in recent years meaning high demand is expected for CDCs as well.[5]

While CDCs will facilitate the timely drawing of samples for testing, it is widely accepted that they will be most productive if they can outsource analysis to pathology hubs. The Independent Review of Diagnostic Services for NHS England advises that for pathology services to be “fully effective in the medium and longer term” requires “the full establishment of designated pathology networks to drive efficiency across a range of pathology disciplines.”[6]

The latest review of NHS diagnostic capacity also highlights a need for technology upgrades at existing genomic laboratory hubs to increase throughput and to support consolidation of infrastructure.[7] The recommendation from report author Professor Sir Mike Richards calls for pathology and genomics equipment and facilities to be “upgraded to facilitate the introduction of new technologies, to support Covid-19 testing and drive efficiency.”

Finance to facilitate investment

While demand is evidently there, the capital expenditure to invest in sites and equipment may be lacking and government funding thus far will not be enough to achieve rapid expansion. Vendors offering integrated finance will therefore be best-placed to support NHS expansion.

Finance at point-of-sale is most effective when supplied by specialist financiers such as Siemens Financial Services (SFS), who understand the sector, the technology and its application. Their expertise enables greater flexibility in designing and tailoring all-encompassing finance packages that suit the cash flow profile of the healthcare organisation.

Such financiers are able to offer smart financing arrangements such as pay-for-outcomes –  where payments are organised around minimum use guarantees and expected outcomes – or consumables-based finance, and have an appetite for whole facility finance.

In every case the financing solutions spread the cost of the technology over an agreed period, with payments arranged to align with the expected benefits of the use of the technology over time, such as improved operational efficiency. By removing the need for a large initial outlay, tailored financing packages like these can help improve cash flow and working capital. Additionally, they have the potential to incorporate other costs, as well as introducing the flexibility of future affordable technology upgrades, in line with technology developments.

SFS provides cost effective financing solutions for a wide variety of equipment and technology, enabling organisations to acquire the solutions they need without having to commit precious capital budgets. SFS works with Siemens Healthineers, as well as other medical technology organisations, to provide cost-effective financing solutions for a wide variety of technology and equipment, enabling healthcare organisations to access the solutions they need without having to commit precious capital budgets.

Conclusion

CDCs and pathology hubs will play a pivotal role in helping the NHS to tackle patient backlogs while supporting earlier diagnosis and increased access to excellent care. While government investment in new facilities has helped to launch the schemes, given expected demand, private sector finance will be required to meet the challenge efficiently and effectively. For vendors supplying diagnostic centres as well as the laboratories to which they may outsource, integrated specialist finance can help to differentiate their offering and win tenders.


[1] https://www-bbc-co-uk.cdn.ampproject.org/c/s/www.bbc.co.uk/news/health-63877830.amp

[2] https://www.england.nhs.uk/north-west/recovery-bulletin/recovery-bulletin-issue-03-november-22/community-diagnostic-centres/

[3] https://www.gov.uk/government/news/government-turbocharges-efforts-to-tackle-covid-backlogs

[4] Daily Report from the House of Commons (Friday, 2 September 2022) p. 146.

[5] https://www.england.nhs.uk/publication/diagnostics-recovery-and-renewal-report-of-the-independent-review-of-diagnostic-services-for-nhs-england/

[6] https://www.england.nhs.uk/wp-content/uploads/2020/11/diagnostics-recovery-and-renewal-independent-review-of-diagnostic-services-for-nhs-england-2.pdf

[7] https://www.england.nhs.uk/publication/diagnostics-recovery-and-renewal-report-of-the-independent-review-of-diagnostic-services-for-nhs-england/

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