Your lab is considering the purchase of a new hematology instrument. It will last for about 5 years then you will make an upgrade again. You have evaluated many models from several manufacturers and have narrowed your choice to the 2 below. Both companies offer reagent rental/lease agreements as one purchasing option. Based on the information below, which instrument is the most economical (will cost the less to run over 5 years)? How much money will the lab be saving per year if they purchase the least expensive options vs the most expensive option? The daily test volume is 265 tests/day (and that is what the reagent rental/lease agreement is based on).

	Instrument 1	Instrument 2
	Purchase	Lease	Purchase	Lease
Purchase price	$87,750	$0	$78,000	$0
Annual Service agreement (You will need this for only 4 years because they are going to give you 1 year free)	$15,150	$0 $0	$16,310	$0
Reagent costs (calculate reagent costs for 5 years)	$0.85/test	$1.10/test	$0.90/test	$1.14/test
Total costs

1. Go to either the Chemistry or Hematology department at your rotation and ask if the major instruments in the department are leased or purchased. 2. What is the difference between capital expenses and operational expenses? 3. What is the difference between Medicare and Medicaid? 4. What is a DRG? (describe DRG, don't just define the acronym) How can a hospital make a profit with DRGs? 5. What are the 3 categories of purchases? 6. Explain the difference between a service contract and time-and-materials arrangement. 7. Why should you have a team approach when deciding what instrument or LIS to purchase? Who should be involved in the team decision when purchasing a hematology analyzer vs a new LIS? 8. What does it mean when an instrument has "open" or "closed" systems