Investments

iStock_000001095558SmallOperational leasing


Operational leasing is an effective external financing for the healthcare sector. Unfortunately, the experience and competence to use it is limited.


Issues related to the field of leasing and management was clearly evident with one of the Danish Regions when there was not the proper understanding of operational leasing. This was also the case for legislation, consequences of use, economic impact, management and monitoring of investment limits, etc. In addition, it was recognised that HF and RF had a legal and financial exposure associated with an unknown number of agreements entered into at department level.

This gave the Region a need to establish better knowledge of operational leasing and the associated management options, as well as putting the user into a system that gave HF the opportunity to use this financial option in a controlled way in terms of economic profitability, control of investment limits and a system to manage and provide management information, both on a HF and RHF level.

At HF, the economic analysis tools were developed and the replacement value considerations were included in such a way that the analysis involved taking into account the appropriate form of financing, ownership or lease!

The Region outsourced their operational leasing and subsequently entered into an agreement with Lighthouse Finance AS. Through this agreement they established a standard for the use of operational leasing and management. In addition, their competence was improved, so that the user was associated with profitability assessments and constructive dialogue between HF and RHF on what is most appropriate to own, and what is most appropriate to lease. Local agreements were unnecessary and both HF and RHF have improved control over what they actually have of leased equipment. Finally, it also resulted in operational leasing as being a way to avoid investment restrictions, and instead a way to create freedom of action and flexibility.

Operational leasing is characterised by:

  • The lease must not be more than 90% of the investment's value. For hospitals, this is further tightened to 80% in Norway.
  • The lease term must not exceed 75% of the product's economic service life. In hospitals in Norway this is tightened to 70%.
  • Operational leasing has motives that go beyond the purely economic ones and must include services that support this.
  • Operational leasing expenses are not activated on the balance sheet. Lease payments are charged directly to the profit and loss account.
  • Besides loans from the government, operational leasing is the only financial means allowed for the hospital service in Norway to use.