Financing Your HME Device: The Difference Between Buying, Renting, and Leasing Medical Equipment

Selecting a Finance Option for Your HME Device

With a doctor’s prescription in hand for a home medical equipment (HME) device, it is now time to choose how to proceed with financing. Your physician may have a recommended supplier. You can also search for HME/DMEPOS suppliers in the area and online, as well as research various specialty stores. While searching for your HME device, consider the three main types of financing available: Buying, renting, and leasing. Each type of financing varies in areas such as flexibility, cost structure, and overall required maintenance. The following is a summary of advantages and disadvantages of each financing option, to help you with your decision.

Buying

If you are going to use your equipment on a long-term or daily basis, buying provides you with a one-time payment, avoiding the ongoing, monthly payments. This has a higher upfront cost; however, you will have ownership of the equipment. A key factor to consider when purchasing equipment is whether it will depreciate quickly. For example, mobility scooters and powered wheelchairs depreciate rapidly due to advancements in battery and control system technology. If you want a lighter, powered wheelchair with a longer battery life soon, buying may not be the best option. However, if you are buying a manual wheelchair, it will last 5-10 years or longer, without any significant upgrades or complex maintenance required. For long-lasting HME devices that do not require frequent updates or maintenance, buying is a solid investment option.

Flexibility

Buying equipment has a high upfront cost, so it is important to consider if you have the financing capabilities for ownership of the HME device. This is the least flexible of the options available since you will own the equipment. Additionally, consider if you have storage available, if you no longer need it. There may be an opportunity to donate the equipment once you have stopped using it.

Cost Structure

The retail cost of the equipment, plus delivery and installation, are the main expenses when buying home medical equipment. Accessories can add another 20-30% to the cost for a fully functional HME device. Replacement parts, such as wheels and batteries, may need to be replaced annually.

Maintenance

For simple devices, maintenance may only be a low annual cost; however, with complex devices that require parts replacements, calibration and servicing, the costs could be an additional few hundred to a few thousand dollars per year.
 

Renting

Renting is ideal when you need the equipment for a specific, short amount of time, such as 6-12 months. For instance, after knee replacement surgery, you may need a walker or scooter to help with mobility. Having a predictable monthly payment schedule can help you with budgeting. In some cases, month-to-month financing is available, which is an affordable and flexible option that provides you with the equipment during the exact time that it is needed.

Flexibility

When you have finished using the equipment, returning it is easy! Simply call for a pickup, and the equipment and payments will be out of your hands. If the equipment breaks, a replacement device can be sent, free of charge. When your needs change, requiring you to upgrade your equipment, having a rental agreement enables you to upgrade or switch out equipment.

Cost Structure

Low monthly costs combined with short-term rental agreements make this an attractive option when the HME device is needed for a brief period of time. Having a lower upfront cost helps you to get started with the equipment right away, decreasing cash flow problems. Depreciation loss is not an issue with the rental cost structure, since you will not be owning the equipment.

Maintenance

When you rent an HME device, maintenance is usually included in the rental agreement, so you do not have expensive repair bills to worry about while you are renting. Typically, customer service is available 24/7, so you will be able to get the most out of your equipment with fast response times if any problems arise during the use of the equipment. If anything malfunctions, it is the rental company’s responsibility, not yours.
 

Leasing

After surgery, a physician may have a graduated plan for you to return to full mobility. A leasing agreement for an HME device will help you to reach that goal while planning upgrades in the middle of your contract period. Leasing provides excellent flexibility and enables you to try newer models of the equipment when they are available. By staying ahead of your rehab plan, you can easily modify lease terms and add additional equipment.

Flexibility

If the type of equipment you need tends to be upgraded frequently, a lease is a smart option. Your HME device may become outdated in 5-6 years, and having a lease plan helps you to stay current with technology as it becomes available. Smart features on mobility scooters are one example of a rapidly evolving technology, where a lease program makes the most sense.

Cost Structure

If you like to try before you buy, a lease option enables you to lease for a specific period of time and has a buy option at the end of that term. This way, you can decide if the equipment works best for you and evaluate the performance prior to purchasing at a discounted price. The payments typically count towards the purchase price of the HME device.

Maintenance

Similar to renting, if the equipment fails, it is the responsibility of the leasing company to provide a replacement. Maintenance plans are typically included in the lease, and are flexible for adding or modifying coverage during the plan. If you need 2-5 years of steady, lower payments and dependable maintenance, leasing plans provide peace of mind for HME device agreements.
 

Conclusion

With various financial options available, it is recommended to consider the length of time you will need the equipment and the flexibility you want when deciding on your financing plan. For further consideration, research your insurance coverage to discover which arrangements may be covered. Tax implications will differ, depending on the type of financing that you select. When you have an upcoming HME device purchase, rental or lease opportunity, consider the flexibility, cost structure, and maintenance to determine the best option for your needs.

If you need additional help finding your Home Medical Equipment and/or Durable Medical Equipment from a trusted supplier, visit our page to begin your search. For additional information about HME supplies and resources, read our previous blogs linked below!

Winning HME Retail: Capitalizing on Today's Consumer Shopping Trends

The HME Prescription Process: A Step-By-Step Guide

How Technology is Revolutionizing Home Healthcare