Procuring Medical Equipment: A Case Study Example

Context

This case study is based on practical implementation guidance shared during Health Procurement Africa’s (HPA) Ask the Expert webinar on procuring medical equipment. The session presented applied approaches from Nigeria and Kenya, delivered by HPA procurement experts, illustrating how public-sector health procurement teams can manage the procurement of medical equipment in healthcare systems.

Watch the full Ask the Expert webinar recording here.

Introduction

Procuring medical equipment in public healthcare systems requires a different strategic approach compared with routine procurement such as pharmaceuticals. Equipment purchases involve capital expenditure, longer asset lifecycles, and ongoing operational costs.
Unlike consumable health products, equipment often remains in use for many years and requires maintenance, training, consumables, and eventual disposal. Procurement teams must therefore consider the full lifecycle of the asset, rather than focusing solely on the initial purchase price.
The webinar emphasised that successful equipment procurement requires a strategic approach that integrates lifecycle costing, appropriate sourcing strategies, stakeholder coordination, and long-term planning.

The Medical Equipment Procurement Framework

A structured approach to equipment procurement involves evaluating both capital expenditure (CAPEX) and operational expenditure (OPEX) throughout the asset’s lifecycle.

Cost Category	Examples
Acquisition Costs	Purchase price, market research, transport, installation, training
Operating Costs	Consumables, energy use, maintenance, spare parts
Disposal Costs	Decommissioning, safe disposal, environmental compliance

The purchase price of equipment is often only a small proportion of the total lifecycle cost, making lifecycle costing essential when comparing procurement options.

Developing the Procurement Approach

Lifecycle Costing

Lifecycle costing provides visibility of the total cost of ownership (TCO) of equipment. This includes initial capital investment, recurring operational costs, maintenance and service costs, decommissioning and disposal costs, and potential residual or resale value.
For example, the procurement of a biochemistry analyser may require not only the equipment purchase but also installation, water systems, refrigeration, consumables, maintenance services, and staff training.

Sourcing Strategy Options

Strategy	Description
Outright Purchase	Organisation buys and owns the equipment and manages maintenance and disposal
Leasing	Equipment is leased with regular operating payments
Managed Equipment Services	Suppliers provide and manage equipment during the contract lifecycle
Public–Private Partnerships	Private sector partners support financing or service delivery
Placement Models	Suppliers install equipment but hospitals purchase associated consumables

Case Application: Medical Equipment Procurement in Public Healthcare

Nigeria Context

Nigeria’s procurement of medical equipment is governed by the Public Procurement Act (2007), which provides the legal framework for procurement planning, tendering, and evaluation.

The law emphasises procurement planning, market research, and the involvement of technical experts in procurement committees. It also allows procurement teams to consider operational and maintenance costs when evaluating bids.

Several procurement approaches are used in Nigeria’s health sector, including public–private partnerships, outsourcing procurement, equipment donations, and placement arrangements where suppliers provide equipment while hospitals purchase consumables.

Kenya Context

Kenya has adopted a multi-level governance model for healthcare procurement involving both national and county governments.

One major initiative was the Managed Equipment Service (MES) programme, a national public–private partnership designed to improve access to specialised medical equipment across the country.

Implementation revealed several challenges including limited specialised personnel, infrastructure constraints, and rising contract costs. Kenya has since introduced new frameworks including the National Equipment Service Project to improve equipment access through service-based payment models.

Governance and Stakeholder Engagement

Stakeholder	Role
Clinicians and Facility Staff	Define clinical needs and equipment requirements
Biomedical Engineers	Support evaluation, installation, and calibration
Procurement Teams	Manage tendering and supplier relationships
Finance Teams	Provide budget oversight and financial control
Government Authorities	Provide regulatory frameworks and policy direction

Implementation Challenges

Common challenges in medical equipment procurement include limited technical capacity to apply lifecycle costing, inadequate budgeting for maintenance, lack of reliable spend data, infrastructure limitations, and rapid technological change.

Dynamic Review

Medical equipment management should follow a structured lifecycle approach including planning and needs assessment, procurement and contracting, delivery and installation, operation and maintenance, and eventual replacement or decommissioning.

Conclusion

This case study demonstrates the importance of adopting a strategic procurement approach when acquiring medical equipment for public healthcare systems. Integrating lifecycle costing, appropriate sourcing strategies, and stakeholder engagement enables healthcare organisations to improve equipment utilisation and healthcare outcomes.

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