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Total Cost of Ownership

About

Total Cost of Ownership (TCO) or Cost of Ownership (COO) is a cost-benefit analysis used for comparing medical devices prior to purchase. TCO/COO is used by clinical engineer managers to assess both direct, indirect costs, and benefits associated medical devices over that medical device(s) life expectancy. The intention is to arrive at a final dollar value that will reflect the cost of purchase, installation, routine maintenance and operation, service contracts, hardware and software upgrades, as well as replacement parts and supplies, test equipment and tools, rentals and lease options, depreciation value, as well as initial technician and user training. When your organization is planning to replace a medical device you will go through a TCO/COO analysis: for example, the greater cost price of a low-end medical device might be one consideration, but that would have to be balanced by considering likely repair costs, parts, and supplies to be included within the purchase cost of the bargain brand. It can be estimated that the purchase price be approximately 20% to 25% of the TCO/COO.

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Total Cost Of Ownership