Two new studies provide related market analysis regarding the healthcare industry's equipment leasing activities.
The Healthcare Equipment Leasing: U.S. Market Dynamics and Outlook 2005-2006 was coordinated by the Equipment Leasing Association (ELA) and R.S. Carmichael & Co. Inc. The market study focuses on the leasing practices of healthcare providers, including hospitals, outpatient centers and physicians' offices. It also examines the market from the standpoint of healthcare equipment vendors and lease financing competitors.
- The estimated size of the U.S. healthcare equipment leasing market in 2005 is at least $7 billion in terms of new volume;
- The healthcare equipment leasing market is projected to exceed $8 billion in volume by 2007, attributable mainly to forecasted equipment sales growth;
- During the past five years the average annual rate of lease financing market growth in healthcare has been 7 percent;
- Healthcare equipment leasing is primarily comprised of transactions in the $250,000 to $5 million range;
- The hospital market represents a growth market for IT systems;
- The outpatient care market, especially the ambulatory surgery center segment, also continues to grow as a market for lease financing; and
- When investment in all healthcare equipment is considered, lease financing penetration is relatively low and appears to be stabilizing due. However, the upside is that the potential remains substantial.
The Long-Term Trends In Healthcare: Implications for the Leasing Industry study has been released by the Equipment Leasing and Finance Foundation which features research by the University of Virginia Darden School. The report features an overview of healthcare industry trends, a statistical analysis of leasing transactions and implications for leasing and finance organizations.
Among the study findings:
- The healthcare industry in 2004 represented a $1.8 trillion annual market that accounted for 15.4 percent of total gross domestic product (GDP);
- Healthcare's share of GDP is expected to continue to increase every year to 2014 as healthcare expenditures growth are expected to outpace GDP growth;
- Small, professional firms are the most significant business form in the healthcare sector, followed by not-for profit organizations; and
- The critical element in improving the productivity of the healthcare industry and reducing its cost growth is capital investment in productivity improving technology that will substitute capital for labor.