What does a laser really cost? From purchase price to cost per treatment

A laser costs €100,000. Is that what the device actually costs you?

Not quite.

In the first two articles in this series, we looked at different ways to acquire a laser and at how financing is structured. But the purchase price doesn't tell you what a device really costs over its lifetime.

New to this series? Start with part 1: buying or leasing a laser and part 2: what determines your monthly payment — some of the concepts here, such as residual value and balloon payments, build on them.

Financing, maintenance, any consumables and residual value all play a part. And just as important: how many treatments will you perform with the device?

After all, a €100,000 laser used for 5,000 treatments has a very different business case from the same device used for 500.

So in this article we move from purchase price to total cost, and finally to cost per treatment.

All amounts and percentages in this article are fictional examples, not price indications for specific devices or services from Medi-Invest.

From purchase price to total cost of ownership

When comparing devices, the focus is often on the purchase price. That's understandable: it's the most visible figure.

Economically, though, it's only one part of the picture.

A simple way to look at total cost is:

Total cost = purchase and financing + running costs + maintenance and service − residual value

These components can vary widely between technologies. A more expensive device may have low running costs, for example, while a cheaper one uses consumables for every treatment.

On its own, then, the purchase price says relatively little about what a device ultimately costs per treatment.

1. Purchase price and financing

We'll stick with our fictional €100,000 laser.

If you buy it outright with your own funds, you invest €100,000 up front. If you finance it, borrowing costs come on top, depending on the amount financed, the term, the interest rate and any balloon payment.

Your own money has a cost too: €100,000 tied up in a device is €100,000 you can't use for anything else.

For a practical business case, you don't need a complicated financial calculation. What matters more is that you compare different devices and acquisition options in the same way.

2. Maintenance and service

A professional energy-based device is designed to perform consistently over a long period. Regular maintenance keeps the system running at its best, and its key components and output within specification.

Depending on the device, this may include technical checks, calibration, software checks and preventive replacement of parts with a limited service life.

So good maintenance supports consistent performance and helps preserve the device's useful life and value.

Maintenance needs vary by technology. For a sound business case, it's wise to build the expected maintenance and service costs for the whole period of use into your figures from the start.

Uptime has a value too. The more intensively a device is used, the more it matters that good technical support and fast service are there when you need them.

3. Consumables can matter more than the purchase price

Some devices have hardly any running costs per treatment. Other technologies use tips, cartridges or other parts that need replacing regularly.

At high treatment volumes in particular, those costs can add up quickly.

Suppose, purely as an example, that a disposable costs €25 per treatment. At 1,000 treatments a year, that is €25,000 a year and €125,000 over five years.

That's more than the fictional €100,000 purchase price in our example.

That doesn't make a device with consumables expensive or unattractive by definition. The treatment may, for instance, command a higher price or margin.

What it does show is why you can't compare devices on purchase price alone.

4. Don't forget residual value

After five years, a device is rarely worth nothing.

Residual value depends on factors such as brand and model, age, condition, service history, technological developments and demand in the second-hand market.

Suppose our fictional €100,000 laser is still worth €25,000 after five years. In simplified terms, you can think of it like this:

€100,000 purchase price − €25,000 residual value = €75,000 depreciation.

Financing costs, maintenance and any running costs then come on top of that.

This is also why a paid-off laser isn't 'free'. If the device is still worth €25,000, that value is still sitting in your business. You can keep using the device, but you may also be able to put that value towards your next investment.

5. What does the laser cost per treatment?

The economic cost becomes really telling once we relate it to the number of treatments.

Take the following entirely fictional example:

These amounts are intended solely to illustrate the calculation.

Assume the device has no significant consumables.

At 500 treatments a year, you perform 2,500 treatments over five years:

€105,000 / 2,500 = €42 in fixed device costs per treatment.

At 1,000 treatments a year, that makes 5,000 treatments:

€105,000 / 5,000 = €21 per treatment.

The device hasn't become cheaper. You're spreading the same fixed costs over more treatments.

That makes utilisation — how much you actually use a device — one of the most important factors in the business case.

If a device does use consumables, you then add those variable costs on top, per treatment.

6. A more expensive device can make more economic sense

This has an important consequence: the laser with the lowest purchase price doesn't necessarily have the lowest cost per treatment.

Take two entirely fictional devices:

Laser B costs €30,000 more to buy, but in this example it is used far more intensively. As a result, its fixed device cost per treatment is actually lower.

A difference like this can arise because a device can treat more indications, can be used more efficiently or is a better match for the treatments your clients are asking for.

Even so, €30 in device costs on a €300 treatment obviously doesn't mean €270 profit. You also have to cover practitioner time, premises, marketing, materials and administration, among other things.

In the end, three questions matter:

How many treatments do I expect to perform? What does each treatment cost me? And what revenue and margin do I get in return?

That's a far more useful starting point for an investment decision than the purchase price alone.

7. When is it time to replace a device?

There's no reason to use a device for five years just because the financing runs for five years.

If a laser is still performing well after five years, is used enough and still suits your clinic, carrying on with it may well pay off.

The reverse can also be true. After three or four years, a new generation may let you treat more indications, work more efficiently or offer treatments that are in greater demand.

In that case, the comparison isn't: “My current laser is paid off and the new one costs €100,000.”

Instead, you're weighing up two options: carrying on with your current device, or putting its remaining value towards a new investment that may generate more.

That's why residual value and trade-in options are worth considering right from the original purchase.

So what does a laser really cost?

The purchase price matters, but it's only part of the story.

Economic value also depends on how many treatments you perform with the device, what each treatment costs and what the device will still be worth later on.

That is how a €100,000 laser can make more economic sense than an €80,000 device — and vice versa.

So the better question isn't just “What does this laser cost?”, but “What does this laser cost per treatment, and what can I earn from that treatment?”