Medical Equipment Rental to Reach $56B by 2017

Global Industry Analysts announced the release of its report on medical equipment and leasing and predicts the global market will reach $56 billion by 2017. Major factors propelling market growth include 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. Healthcare service and equipment providers are increasingly turning to leasing as an economical option for acquiring costly medical equipment and devices.
The report notes rental and leasing of medical devices is fast catching up in the healthcare sector, repelling the traditional loan and credit purchase system. Rental and leasing of medical equipment is an affordable and quick solution for hospitals, nursing homes, and physicians constrained by limited funds due to the recent global economic recession. Leasing enables saving working capital, gives option for purchasing the equipment, and allows upgrades to new technology. Commonly leased medical equipment includes X-ray machines, ultrasound systems, patient-monitoring equipment and laboratory equipment.
Leasing is growing as the most preferred alternative method for financing medical technology in countries such as France, Germany and the U.K. due to the budgetary constraints faced by most of the hospitals in Europe. The German medical equipment market is the largest in the European region. The U.S. represents the next important market for medical equipment, trailing behind the Europe. However, growth is expected from the rest of the world market, which is forecast to exhibit the fastest compounded annual growth of more than 7.0% during the analysis period.
The penetration of medical equipment lease financing in the U.S. has been relatively low until about five years ago, owing to the lack of awareness about leasing, reduction in reimbursements and regulations influencing physician referrals. However, the scenario has changed in recent years, with currently about 35% to 40% of medical equipment in the U.S. being leased.