What does "total cost of ownership" (TCO) refer to in healthcare procurement?

Total cost of ownership (TCO) in healthcare procurement encompasses a comprehensive assessment of all related costs associated with acquiring, utilizing, and maintaining a product or service throughout its lifecycle. This concept goes beyond just the initial purchase price; it includes additional expenses such as installation, training, ongoing maintenance, and any potential costs related to disposal or upgrades.

Understanding TCO is crucial for decision-makers in healthcare because it helps them evaluate the long-term financial impact of their purchasing decisions, allowing for better budgetary planning and resource allocation. By considering TCO, healthcare organizations can ensure they are making informed choices that align with their financial goals and operational efficiency.