In times where healthcare organisations are under pressure to manage their budgets, many Trusts are rethinking how they access the tools and technology they need to operate. One increasingly popular approach is pay-per-use, a model where businesses only pay for equipment, services or systems when they actually use them.
This allows companies to avoid large upfront costs, eliminate unused capacity, and gain operational flexibility without sacrificing access to high-performance solutions. Pay per use removes the traditional ownership burden, enabling a more responsive and scalable approach to business investment.
What Is Pay Per Use and How Does It Work?
Pay-per-use, also known as consumption-based pricing or metered billing, is a financial model where customers are charged only for the actual usage of a product or service. This might include time in operation, number of transactions, energy consumption or volume of output.
Rather than committing to fixed-term leases or full ownership through other funding solutions, businesses using the pay per use model can access high-value equipment and services when they need them and pay only for what they consume.
Key Principles Behind the Pay Per Use Model
At its core, pay per use is driven by four key principles
- Access over ownership – The focus is on getting the outcome, not owning the asset
- Usage-based pricing – Charges are tied to measurable metrics such as units produced or machine hours
- Shared responsibility – Suppliers remain accountable for performance and uptime
- Scalable demand – Customers can scale up or down based on business needs
Differentiating Pay Per Use from Traditional Leasing and Buying
Traditional purchase models require large capital outlays and long-term commitments. Leasing offers some flexibility but still involves fixed monthly costs regardless of usage.
By contrast, pay per use shifts the focus from owning to accessing. A company might, for example, pay per scan for an MRI machine or per hour for a robotic arm on a production line. This eliminates idle time costs and improves operational efficiency.
What sets this model apart is the alignment of cost to value because companies only pay when they benefit from the service.
Benefits of the Pay Per Use Model for Businesses
For many businesses, particularly those navigating growth or uncertainty, the pay per use model offers a smarter way to manage assets and cash flow.
Cost Efficiency and Budget Flexibility
Instead of tying up capital in expensive machinery or software, businesses can allocate budget towards operations and growth. A 2024 Deloitte study found that firms adopting usage-based models reported up to 30 percent better cost alignment compared to traditional contracts.
By linking spend to output, companies gain better financial control and can adjust investment in real time.
Risk Sharing Between Supplier and User
In a pay per use arrangement, the supplier often maintains responsibility for service delivery including maintenance and upgrades. This means the customer avoids the risk of downtime, depreciation or technical obsolescence.
This fosters a true partnership where both parties are incentivised to achieve the best outcomes.
How Does Pay Per Use Affect Supply Chain Management
The influence of pay per use on supply chain management is increasingly significant as companies look for ways to reduce fixed costs and improve responsiveness.
Enhancing Flexibility and Responsiveness
Pay-per-use enables companies to scale production or operations without needing to own all the infrastructure themselves. This is especially valuable in industries where demand varies seasonally or is influenced by market volatility.
For example, a manufacturer might rent additional equipment on a per-unit basis during peak periods then reduce usage when demand drops.
Reducing Inventory and Storage Needs
When assets are accessed only when needed, businesses can reduce inventory levels and free up warehouse space. This contributes to leaner operations and faster turnaround times.
According to McKinsey, firms that adopted flexible usage-based logistics saw inventory costs fall by as much as 20 percent within the first 12 months.
Industry Examples: Pay Per Use in Action
Different industries make use of Pay Per Use in different ways. While SAF primarily focuses on the healthcare industry, others utilise these methods to help with supply chain management. For instance, in the industrial sector, pay per use methods are often used by smaller firms to access automation and smart manufacturing tools without making full purchases.
Healthcare and Medical Equipment
Hospitals and clinics are increasingly using pay per use models to access high-end medical equipment such as imaging systems and surgical robotics.
Rather than purchasing outright, facilities pay per use for instance per scan or treatment which allows better budget management and faster technology adoption.
This model, which follows the principles of the IFRS 16 regulations, also supports better patient care by ensuring access to the latest technology without cost being a barrier to entry.
Pay per use is proving to be more than just a payment model: It’s a strategic approach to smarter business.
