Estimating replacement costs for hospital equipment

This paper presents a methodology for predicting future replacement costs of hospital capital equipment. The methodology is applied to the equipment inventory of a large Canadian teaching hospital. The authors used forecasted Producer Price Indexes for several equipment categories, and applied them to the estimated equipment replacement needs. The Canadian Management Information System schedule and the American Hospital Association schedule were used to determine the estimates, which varied considerably between the two schedules. However, the test case demonstrated that such estimates can help hospitals to document capital funding needs in relation to available funds.