--- title: Healthcare Equipment - Total Cost of Ownership Versus Price description: It's important for equipment planners, project managers, & administrators to understand medical equipment's total cost of ownership versus purchase price. image: https://blog.cmecorp.com/hubfs/Healthcare%20Equipment%20-%20Total%20Cost%20of%20Ownership%20Versus%20Price.jpg --- - Welcome! - [Sign In](https://www.cmecorp.com/customer/account/login/referer/aHR0cHM6Ly93d3cuY21lY29ycC5jb20v/) - or - [Create an Account](https://www.cmecorp.com/customer/account/create/) - [![](https://www.cmecorp.com/media/public/icons8-phone-50.png) 800.338.2372](tel:8003382372) [![CME Corp](https://blog.cmecorp.com/hs-fs/hubfs/CME_CORP_LOGO_FIN_2018_PMS_300dpi-1.png?width=1331&height=442&name=CME_CORP_LOGO_FIN_2018_PMS_300dpi-1.png "CME Corp")](http://www.cmecorp.com) [Find My Account Manager](https://www.cmecorp.com/about/contact-us.html) | [Contact Us](https://www.cmecorp.com/about/contact-us.html) Search: ![](https://blog.cmecorp.com/hubfs/_images/search-icon.jpg) [![](https://blog.cmecorp.com/hs-fs/hubfs/_images/mini-cart.jpg?width=23&height=21&name=mini-cart.jpg)](http://www.cmecorp.com/checkout/cart/) - [CME Expertise](https://www.cmecorp.com/cme-expertise.html) - [Hospitals / IDNs](https://www.cmecorp.com/cme-expertise/hospitals.html) - [Laboratory](https://www.cmecorp.com/cme-expertise/laboratory.html) - [Imaging](https://www.cmecorp.com/cme-expertise/imaging.html) - [Surgery Centers](https://www.cmecorp.com/cme-expertise/surgery-centers.html) - [Clinics](https://www.cmecorp.com/cme-expertise/clinics.html) - [Physician Offices](https://www.cmecorp.com/cme-expertise/physician-offices.html) - [Behavioral Health Facilities](https://www.cmecorp.com/cme-expertise/behavioral-health.html) - [Long Term Care](https://www.cmecorp.com/cme-expertise/long-term-care.html) - [Rehabilitation Centers](https://www.cmecorp.com/cme-expertise/rehabilitation.html) - [Government Services](https://www.cmecorp.com/cme-expertise/government.html) - [Emergency Medical Services](https://www.cmecorp.com/cme-expertise/emergency-medical-services.html) - [Integrated Services](https://www.cmecorp.com/integrated-services.html) - [CAD-Based Layout & Design](https://www.cmecorp.com/integrated-services/cad-based-layout-and-design.html) - [Project Management](https://www.cmecorp.com/integrated-services/project-management.html) - [Direct-to-Site Services](https://www.cmecorp.com/integrated-services/direct-to-site-services.html) - [Biomedical Services & Technical Solutions](https://www.cmecorp.com/integrated-services/biomedical-services.html) - [Contractor Specialties](https://www.cmecorp.com/integrated-services/contractor-specialties.html) - [Find Products](https://www.cmecorp.com/shop.html) - [Shop By Category](https://www.cmecorp.com/new-shop/shop-by-category.html) - [Shop By Manufacturer](https://www.cmecorp.com/new-shop/brands.html) - [Digital Solutions Guide](https://cmesolutionsguide.com/) # Healthcare Equipment - Total Cost of Ownership Versus Price [![Shot of a surgeon looking at a monitor in an operating room](https://blog.cmecorp.com/hubfs/Healthcare%20Equipment%20-%20Total%20Cost%20of%20Ownership%20Versus%20Price.jpg)](https://blog.cmecorp.com/healthcare-equipment-total-cost-of-ownership-versus-price-understanding-the-difference-1) By [CME Corp Staff](https://blog.cmecorp.com/author/cme-corp-staff) | December 1, 2016 - [Tweet](https://twitter.com/share) [Healthcare organizations](https://www.cmecorp.com/who-we-serve.html?utm_source=hubspot&utm_medium=blog&utm_campaign=cme%20insiders) often incur fierce competition between different departments for the scarce dollars allocated towards [capital equipment purchases](https://blog.cmecorp.com/5-hidden-costs-to-be-aware-of-when-ordering-capital-medical-equipment). When called upon to justify the cost-effectiveness of specific product purchases to upper administration, the department manager/administrator must understand the difference between total cost of ownership versus purchase price. The purchase price represents the amount paid to a supplier to buy a product. A price-oriented procurement approach works aggressively to secure savings by paying less for products/services than in the past, and only considers the price paid for the equipment or services. There are several benefits to taking a total cost of ownership approach when buying equipment. It provides an overall perspective so you can make meaningful comparisons between different products of the same type. **Total Cost of Ownership (TCO):** The [TCO model](https://www.business-case-analysis.com/total-cost-of-ownership.html) describes a management accounting concept that evaluates all of the associated costs over the life of each asset, not just the [purchase price](https://blog.cmecorp.com/4-key-things-to-keep-in-mind-for-your-end-of-budget-year-equipment-spending). TCO varies, depending on the industry, the piece of equipment and other related elements, but may include such things as: - **Equipment Acquisition –** From the start of researching the price, to the cost of processing the purchase order(s), paying for shipping, warehousing, the delivery and setup, to the final clean-up. - **Financing -** the cost of outright purchase versus leasing or other financing installment payment programs. - **Installation –** Set-up may include handling, plumbing, and electrical supply, plus any wall mounting requirements. - **EHR connectivity –** IT personnel and software requirements needed to correctly capture or exchange data. - **Available space –** May cause you to enlarge your space, conduct facility remodeling for weight support, or add ventilation or electrical supply. - **Repair & Maintenance –** warranty of the products, purchasing additional or extended service contracts and parts. - **Supply Costs -** the cost of disposable supplies needed for the item to operate as intended. **When making purchasing decisions be sure to keep in mind your total cost of ownership!** Let an experienced specialist from [CME (formerly Claflin Medical Equipment, Hospital Associates, & RSI)](https://www.cmecorp.com/) guide you and help you avoid unforeseen costs. We have over 30 specialists nationwide to assist you in quantifying and comparing the acquisition and operational costs of different equipment items. [![Ultimate Cheat Sheet](https://no-cache.hubspot.com/cta/default/350655/b59abf26-9b8e-4026-8765-999da34de3f7.png)](https://cta-redirect.hubspot.com/cta/redirect/350655/b59abf26-9b8e-4026-8765-999da34de3f7) --- **About CME:** CME Corp is the nation’s premier source for [healthcare equipment](https://www.cmecorp.com/solutions/capital-equipment.html?utm_source=hubspot&utm_medium=blog&utm_campaign=cme%20insiders), [turnkey logistics](https://www.cmecorp.com/solutions/direct-to-site-services.html?utm_source=hubspot&utm_medium=blog&utm_campaign=cme%20insiders), and [biomedical services](https://www.cmecorp.com/solutions/biomedical-services.html?utm_source=hubspot&utm_medium=blog&utm_campaign=cme%20insiders), representing 2 million+ products from more than 2,000 manufacturers. With two corporate offices and 35+ service centers, our mission is to help [healthcare facilities](https://www.cmecorp.com/who-we-serve.html?utm_source=hubspot&utm_medium=blog&utm_campaign=cme%20insiders) nationwide reduce the cost of the equipment they purchase, make their equipment specification, delivery, installation, and maintenance processes more efficient, and help them seamlessly launch, renovate and expand on schedule. 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