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Hospital exec explains decision to lease hardware

Cost savings can be there — plus, will you really need that hardware in three years?

By , Network World
January 15, 2014 10:40 AM ET

Network World - Last fall, after mulling the buy-vs.-lease question, St. Francis Hospital and Medical Center, based in Hartford, Conn., determined that leasing computers would save it 10% based on a three-year timetable.

The decision to switch to leasing was taken up as part of the preparation for a major upgrade of clinical applications systems now underway, says Glenn Mason, director of infrastructure and enterprise services. “We had the opportunity to replace 5,000 end-user client devices -- 3,700 PCs and 1,200 thin clients,” says Mason. Other equipment, such as servers and workstations on wheels were also going to be upgraded as part of what was anticipated to be more than a $3 million technology refreshment focused around the Epic electronic healthcare application and the implementation of new workflow systems.

Mason said the hospital’s management took a look at the upfront costs for buying hardware versus leasing it, based on a deal offered by HP Financial Services, and determined it would save at least $150,000 in 2014 alone under a three-year lease plan. “At the end, it will save 10% in the total cost of ownership over three years,” says Mason.

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As the hospital implements hardware provided by HP, HP sends them the bill. “HP technically owns it, but they lease it to us,” says Mason. At the end of three years, if the hospital wants to extend the lease, they can do that. But Mason says with technology changing so rapidly, it’s likely that the hospital will be investigating other possibilities, such as tablets, for future use. There’s no strong wish to own the leased computers, he notes.

Other leasing options are out there, such as those that can be arranged through Cisco Capital Finance, says Mason. He said one reason the hospital went forward with leasing with HP Financial Services is it had a good experience with leasing in the past when it leased the RES Software desktop integration tool.

As part of the larger arrangement with HP, St. Francis Hospital and Medical Center is getting new large-screen computer monitors. But under the deal with HP, the hospital has opted to keep them if it wants. “For the monitors, at the end of the 36 months, I’ll pay a dollar to keep it,” says Mason.

Ellen Messmer is senior editor at Network World, an IDG website, where she covers news and technology trends related to information security. Twitter: MessmerE. E-mail: emessmer@nww.com

Read more about infrastructure management in Network World's Infrastructure Management section.

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