Medical Equipment Leasing Growth Driven by IT, Outpatient Systems

The U.S. healthcare equipment leasing market is expected to grow to more than $8 billion by 2007 in terms of annual new business, according to a study released by the Equipment Leasing Association (ELA; Arlington, VA). Growth in the leasing market will be led by information technology systems and outpatient care equipment, according to the study.

The ELA study, Healthcare Equipment Leasing: U.S. Market Dynamics and Outlook 2005–2006, was one of two reports on healthcare leasing released concurrently. The second study, Long-Term Trends in Healthcare: Implications for the Leasing Industry, was released by the Equipment Leasing and Finance Foundation (Arlington, VA), a nonprofit organization that promotes the equipment leasing industry. Its report provides an overview of healthcare industry trends, an analysis of leasing transactions, and implications for leasing and finance organizations.

Petta

ELA's Petta: Leasing insight.

“These two studies provide thorough insights into the drivers of healthcare equipment leasing,” says Ralph Petta, vice president of industry services for ELA. “They are a resource for organizations in healthcare and equipment leasing to understand how the healthcare market is financed and why.”

The ELA study focuses on the leasing practices of healthcare providers and also examines the market from the standpoint of healthcare equipment vendors and lease-financing competitors. Overall, the report defines healthcare equipment leasing as a “middle-market” business, with the majority of transactions between $250,000 and $5 million.

According to the report, the healthcare equipment leasing market has seen a 7% average annual growth rate over the past five years. When considering all investment in healthcare equipment, lease-financing penetration is still relatively low and appears to be stabilizing. The report attributes this in part to reimbursement reductions, regulations affecting physician referrals, and a lack of awareness of leasing as an option in healthcare equipment purchases.

Filed Under
500 characters remaining