Every healthcare organization faces difficult capital investment decisions. Aging equipment, emerging technologies, clinical needs, infrastructure improvements, and strategic initiatives all compete for limited funding. And while every request may have merit, not every priority can move forward at once.
The challenge isn’t simply deciding what to fund. It’s determining where investments will have the greatest impact, when equipment should be replaced, and how to make decisions that balance patient care, operational needs, and financial realities.
During a recent Staritas webinar, Capital Planning Under Pressure: How Healthcare Leaders Are Prioritizing What Matters Most, three healthcare supply chain leaders shared how their organizations are approaching these challenges:
- Rosa Costanza, Senior Vice President, Chief Supply Chain and Procurement Officer, Jackson Health System
- Sean Farley, Vice President, Supply Chain and Chief Procurement Officer, Seattle Children’s
- Janelle Willis, Director of Supply Chain Management, Advocate Health
Moderated by Tim Browne, Vice President of Global Supply Chain Solutions at Staritas, the discussion explored the decisions behind the capital plan, from prioritizing competing requests to building more strategic, sustainable approaches to equipment replacement.
Here are five key insights from the conversation.
1. Prioritization requires looking beyond individual requests
When resources are constrained, the challenge isn’t necessarily choosing between important and unimportant investments. It’s determining which legitimate priorities should move forward first.
The panelists emphasized the importance of evaluating capital requests through a broader organizational lens rather than allowing individual departments or service lines to compete for funding independently.
Willis emphasized the importance of moving from departmental advocacy toward enterprise alignment. Rather than evaluating projects in isolation, leaders should consider how investments support patient care, strategic objectives, and the needs of the broader health system.
Farley highlighted the value of established scoring criteria that consider factors such as clinical outcomes, patient access, technological advancement, and financial considerations. This structured approach helps bring greater objectivity and consistency to prioritization discussions.
The takeaway: Effective capital prioritization starts with a shared framework. By evaluating requests against consistent criteria and organizational objectives, leaders can make more informed trade-offs and direct resources toward investments that deliver meaningful value.
2. A decision to defer should be supported by data and a clear path forward
Not every important capital request can be funded immediately. But how leaders communicate those decisions can be just as important as the decisions themselves.
Farley described how his team approaches conversations with stakeholders whose requests were not prioritized. Rather than simply communicating a rejection, the discussion focuses on why the request was deferred, the data supporting the decision, and what might need to happen for the investment to move forward in the future.
This transparency helps stakeholders understand the broader context of the decision while maintaining engagement in the planning process.
Willis reinforced that deferral does not necessarily diminish the importance of a project. Timing, strategic alignment, and enterprise impact all influence when an investment should move forward.
The panel also explored how leaders distinguish between responsible deferral and decisions that could introduce greater costs or risks. Understanding utilization, equipment condition, maintenance requirements, and clinical impact is critical to making that determination.
The takeaway: Defensible capital decisions require more than a ranking of requests. Leaders need reliable data, consistent criteria, and transparent communication that explains both the decision and the potential path forward.
3. Equipment age alone doesn't determine replacement priority
Equipment replacement is one of the most complex areas of capital planning. While age and expected useful life provide important reference points, they don’t always reflect an asset’s actual condition, performance, or value to the organization.
Costanza emphasized the need to consider maintenance expenses, equipment downtime, obsolescence, patient safety, and the potential disruption to clinical operations.
An older device that continues to perform reliably may not require immediate replacement. Conversely, equipment experiencing frequent breakdowns, declining performance, or increasing maintenance costs may warrant earlier investment.
Farley also highlighted the importance of understanding how equipment is actually being used. He shared how evaluating utilization patterns can uncover opportunities to meet clinical needs through alternatives to new equipment purchases, including technology upgrades or more effective resource sharing.
The example illustrates how better visibility into utilization can help organizations challenge assumptions, explore alternatives, and make more strategic use of existing capital resources.
The takeaway: Replacement decisions should consider the complete picture, including equipment condition, utilization, maintenance history, clinical risk, and total cost of ownership. These insights can help organizations determine when to replace, repair, upgrade, or extend the life of existing assets.
4. Long-term visibility creates opportunities for more strategic capital planning
Capital planning becomes increasingly complex when organizations move beyond individual equipment requests to evaluate needs across an entire fleet, service line, or health system.
Without a longer-term view, equipment replacement can become reactive, driven by unexpected failures, urgent requests, or annual budget constraints.
Farley discussed the value of developing a long-term equipment lifecycle plan to provide greater visibility into anticipated replacement needs and support more strategic financial planning.
He also emphasized the importance of collaboration across finance, clinical engineering, IT, and other stakeholders to evaluate equipment performance, maintenance requirements, and evolving technology needs.
Long-term visibility can also create purchasing opportunities. By evaluating replacement needs across multiple departments or facilities, organizations may identify opportunities to coordinate purchases, leverage volume, strengthen supplier negotiations, and improve total cost of ownership.
Importantly, a long-term plan should not be treated as a fixed schedule. Changing clinical requirements, emerging technologies, equipment performance, and organizational priorities may require adjustments along the way.
The takeaway: A strategic capital plan provides visibility into future needs while maintaining flexibility to respond to changing circumstances. Looking across the equipment portfolio can help organizations anticipate investments, coordinate resources, and make more informed decisions over time.
5. Strong capital decisions depend on cross-functional alignment
Capital planning is not solely a supply chain or finance responsibility. The most effective decisions bring together the perspectives of clinical leaders, biomedical engineering, finance, IT, facilities, and other stakeholders.
Costanza reinforced the importance of close collaboration between supply chain, biomedical engineering, and clinical teams. She emphasized that maintaining these relationships helps leaders stay informed about equipment performance, maintenance costs, and emerging technology needs.
For example, biomedical engineering teams may have critical insight into equipment condition, maintenance history, downtime, and serviceability. Clinical teams understand how equipment performance affects patient care, capacity, and workflow. Finance provides perspective on available funding, financial sustainability, and long-term investment requirements.
Bringing these perspectives together helps organizations move beyond individual priorities and evaluate the broader implications of each decision.
It also builds confidence in the process. When stakeholders understand the criteria, have opportunities to contribute relevant information, and see how decisions align with organizational goals, difficult trade-offs become easier to navigate.
The takeaway: Effective capital planning depends on shared information, collaboration, and a consistent decision-making process. The goal isn’t simply to secure agreement on every investment, but to ensure decisions reflect the needs of the organization and the patients it serves.
Moving from capital planning under pressure to more proactive decisions
Financial constraints, aging equipment, and evolving clinical needs will continue to challenge healthcare organizations. But limited resources don’t have to mean reactive decision-making.
As the panel discussion reinforced, healthcare leaders can strengthen capital planning by looking beyond equipment age, applying consistent prioritization criteria, improving visibility across their equipment portfolios, and bringing the right stakeholders into the decision-making process.
The common thread is the value of having the right information to understand the options, evaluate trade-offs, and move forward with confidence.
At Staritas, we help healthcare organizations navigate these challenges through independent capital equipment benchmarks, market intelligence, and specialized expertise. Our Capital Guide and Predictive Replacement Planning solutions help leaders evaluate investments, anticipate replacement needs, and support more informed capital planning decisions.
Want to hear more from the leaders navigating these decisions every day?
Watch the full Capital Planning Under Pressure webinar to hear perspectives from Jackson Health System, Seattle Children’s, and Advocate Health on how they are prioritizing investments, managing equipment replacement decisions, and balancing competing organizational needs.
