With traditional medical equipment financing models becoming unsustainable, flexible financing options are increasingly helping healthcare providers improve their financial efficiency and supporting long-term digital health transformation.

The UK healthcare industry is undergoing a major digital transformation, with innovation already improving care in many areas from reducing waiting times and enabling earlier diagnoses, to delivering better access to care and outcomes for patients. Embracing new technology can help to unlock productivity, giving staff more time to focus on patient care, while also having a positive impact on the planet.

But for many healthcare providers, the high cost of traditional commercial models makes adopting cutting-edge technology a challenge. In fact, according to the Philips UK Future Health Index, a staggering 92 per cent of healthcare leaders say financial pressures are impacting their ability to deliver timely, high-quality care. Even more concerning, 77 per cent report that these financial strains have forced them to delay, scale back, or even cancel investments in medical equipment and technology – worsening existing bottlenecks and slowing down patient care.

Innovative financing approaches, such as pay-per-use (PPU) and “as-a-service” models, integrated into managed service agreements, give healthcare providers flexible, cost-effective access to technology, without large upfront investments. These models also de-risk investment and can help to enhance productivity, improve financial efficiency, and support long-term digital health sustainability.

Flexibility that adapts to demand

As demand for diagnostic and treatment procedures grows, healthcare providers face squeezed budgets and rising costs. IFRS16 (the International Financial Reporting Standard on Leases) now requires leasing costs to be counted as ‘capital’ on balance sheets, and CDEL (Capital Departmental Expenditure Limit) limits capital spend, even when cash is available. Traditional equipment financing, like leasing, is becoming less sustainable.

This is where flexible financing options such as PPU and “as-a-service” models are transforming how hospitals access and use technology. These models enable hospitals to only pay for what they use, reducing financial risk while ensuring access to the latest innovations. This flexibility helps them scale technology adoption based on patient demand and operational needs, keeping systems up to date and healthcare more adaptable.

Boosting productivity with managed services

Managing complex healthcare technology in-house can be time-consuming and resource intensive. The Future Health Index reports that 80 per cent of healthcare leaders have seen increased incidence of burnout, stress and mental health issues among their staff, with knock-on effects for patient care. A renewed focus on supporting staff is needed.

Managed services offer an alternative approach, where healthcare providers partner with experts to oversee equipment, IT infrastructure, and digital health solutions. This ensures technology runs at peak efficiency, reducing downtime and administrative burdens, freeing up staff to focus on patient care instead of maintenance. At the same time predictable cost structures improve financial planning. Ultimately, managed services can improve productivity, reliability, and performance in healthcare.

Smarter spending through outsourcing

Beyond operational benefits, outsourcing healthcare services can also provide significant tax advantages. Managed services can help hospitals identify and recover VAT from eligible equipment purchases, leading to greater tax efficiencies and improved cash flow.

This financial flexibility means hospitals can maximise use of their budgets, ensure compliance and redirect savings toward critical patient services.

Sustaining technology for the future

Sustainability is becoming a key priority for healthcare providers, and innovative financing can support long-term technology longevity. Lifecycle management solutions will extend the useful life of medical devices and IT systems through proactive upgrades, maintenance, and refurbishments.

This approach not only reduces electronic waste – such as outdated or discarded medical devices and IT equipment – and environmental impact, but also ensures that hospitals are always working with the latest, most efficient technology. By adopting sustainable financing and lifecycle strategies, healthcare organisations can reduce costs, improve operational resilience, and align with NHS net zero goals.

A new approach to healthcare technology

Innovative financing is reshaping how hospitals access and manage technology. Flexible models such as pay-per-use and “as a service”, combined with tax benefits and lifecycle management in managed services, help providers to stay ahead in the digital health revolution – without the financial strain of traditional procurement. At the same time, sustainable technology management ensures long-term value and cost-effectiveness.

By embracing these innovative financing strategies, organisations can boost efficiency, improve patient care, and achieve financial sustainability, ultimately unlocking the full potential of digital health and technology.

This article was kindly supported by Philips