A New Estimate by Siemens Financial Services Reveals: Investments in European Healthcare Systems are not Being Optimally Financed
MUNICH, Germany, May 27/PRNewswire/ --
- In Europe's Leading Economies, the Inefficiently Bound Capital in the
Healthcare System is Estimated to Have Grown From EUR 11.1 bn to EUR 13.1 bn
Between 2005 and 2006. This Represents an Increase of About 19%.
Recent figures of an analysis by Siemens Financial Services (SFS)
underscore the substantial potential for efficient employment of capital in
European healthcare systems: SFS calculations show that more than EUR 13 bn
was "bound" in 2006. With nearly EUR 4 bn, Germany ranked first among the
countries that were studied. "Bound" capital is capital that is more or less
"frozen" as a result of the acquisition of investment goods. In today's
environment of shorter technological cycles, ownership of technical equipment
is associated with a number of serious drawbacks. This applies to the
healthcare segment as well. In an era of escalating healthcare spending, the
analysis clearly shows that the sector is inadequately using available
financing solutions like leasing and, as a result, is letting efficiency
potential go to waste.
The main reason for the 19% rise in the European average to EUR 13.1 bn
in 2006 may be that spending for medical equipment rose 20% within a year
while growth in leasing totaled only 6.4% during the same period in the
countries that were studied(1). With a total of about EUR 4 bn, Germany was
indeed the top country. But its growth rate of only 9% was by far the lowest
- possibly the result of the latest cost-cutting efforts in the German
healthcare system.
Kai-Otto Landwehr, Managing Director of the SFS subsidiary Siemens
Finance & Leasing GmbH, said: "The result of shorter technological cycles
should not be that a growing share of available capital in the healthcare
system is bound in equipment investments that may fall victim to the next
technological advances in 12 to 18 months. Our study shows that in Germany
alone the substantial sum of EUR 4 bn is 'frozen' in the healthcare sector
because suitable financing solutions for investment goods are being
inadequately used. Of course, the entire amount cannot be released at once
for use in other areas. But when purchasing no longer is the standard option
and the focus shifts to usage, considerable efficiency potential arises."
In the process, additional transparency is created. "Tailored financing
contained in a comprehensive finance plan can provide healthcare managers
with a very accurate picture of the real costs of investment goods over
time," Landwehr said. And he added that this picture was necessary in order
to precisely calculate the prices of individual treatment units.
Calculating Frozen Capital
The formula for calculating 'frozen capital' is as follows:-
- Annual spending on healthcare equipment is reduced to the
proportion deemed 'leasable' (conservatively, 50%)
- This remaining sum is then reduced by the all-sectors leasing
penetration rate for the country in question (also highly conservative,
as the health sector leases/rents less than the commercial world)
- The remaining sum is regarded as largely 'frozen' in that it has
been locked-in to outright purchases where payments could have been
spread - as monthly payments - across the lifetime of the asset
For more information see: http://www.siemens.com/answers-for-finance
About Siemens Financial Services
Siemens Financial Services (SFS) is an international provider of
financial solutions in the business-to-business area. With about 1,900
employees and an international network of financial companies coordinated by
Siemens Financial Services GmbH, Munich, we support Siemens as well as
non-affiliated companies, focusing on the three sectors of energy, industry
and healthcare. We finance infrastructure, equipment and working capital and
act as a competent manager of financial risks within Siemens. By leveraging
our financing expertise and our industrial know-how we create value for our
customers and help them strengthen their competitiveness. For more
information see: http://www.siemens.com/finance.
This document contains forward-looking statements and information - that
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(1) Average figures from a variety of sources, including Mediastat,
Espicom, Frost and Sullivan
Press Contacts
Siemens Financial Services GmbH
Markus Wierl
SFS SCDC
80200 M=FCnchen
Tel: +49-89-636-89911
Fax: +49-89-636-35485
markus.wierl@siemens.com
Siemens Financial Services GmbH
Dr. Christian Kosch
SFS SCDC
80200 M=FCnchen
Tel: +49-89-636-89911
Fax: +49-89-636-35485
christian.kosch@siemens.com
Source: Siemens Financial Services GmbH
Press Contacts: Siemens Financial Services GmbH, Markus Wierl, SFS SCDC, 80200 M=FCnchen, Tel: +49-89-636-89911, Fax: +49-89-636-35485, markus.wierl@siemens.com; Siemens Financial Services GmbH, Dr. Christian Kosch, SFS SCDC, 80200 M=FCnchen, Tel: +49-89-636-89911, Fax: +49-89-636-35485, christian.kosch@siemens.com
2008-05-26 08:02:00 0370050 PRNEWSWIRE