Saturday, December 1, 2018

Medical Equipment Leasing

Research by GIA forecasts the global market for medical equipment rental and leasing will reach $64.07 billion by the year 2025. Major factors propelling market growth include the growing incidence of chronic diseases, driving the demand for diagnosis and in turn the need for medical equipment; technological advancements leading to the obsolescence of old equipment; surging prices of medical equipment; and the need to curb healthcare expenses. More and more healthcare service and equipment providers are turning to leasing as an economical option for acquiring costly medical equipment and devices.

The healthcare industry is thriving, backed by a growing elderly population; a rising incidence of chronic diseases; an increasing national expenditure on healthcare; and a growing need for medical procedures, products, and services. However, with rapid advancements in technologies and surging prices for medical equipment, hospitals, healthcare practitioners, physicians, clinics and nursing facilities find it difficult to maintain their budgets. As a result, the leasing of medical devices is increasing in the healthcare sector. Leasing of medical equipment is an affordable and quick solution for hospitals, nursing homes, and physicians which are presently constrained by the availability of limited funds due to the recent global economic recession. Leasing saves working capital, provides an option to purchase the equipment, and allows the end-user to upgrade to new technology. Commonly leased medical equipment includes X-ray machines, ultrasound systems, patient monitoring equipment, and laboratory equipment. The surging cost of imaging equipment has led several hospitals and clinics to shift from an outright purchase model to a leasing scenario.

The penetration of medical equipment lease financing in the United States has been relatively low until five to six years ago, owing to the lack of awareness about leasing, reduction in reimbursements, and regulations influencing physician referrals. However, this scenario has changed in recent years, with currently about 35% to 40% of medical equipment in the United States being leased.