Healthcare Equipment Leasing Market - Growth, Trends, Covid-19 Impact, and Forecasts (2022 - 2027)

Market Overview

Healthcare Equipment Leasing is expected to register a CAGR of 15.56 % during the forecast period (2022-2027).

Covid-19 has significantly impacted the market growth due to the rise in the adoption of leasing healthcare equipment to withstand the high traffic of Covid-19 patients. According to the news published by the Equipment Leasing and Finance Foundation in August 2020, receivables have held up quite well so far, indicating that businesses were in relatively good shape prior to the crisis, and COVID-19 has improved the equipment leasing and finance industry’s confidence. In addition, according to the DLL financial solutions partners, in August 2020, there was a significant shift in demand for healthcare equipment. Many of the company's partners and clients at DLL have experienced quickly changing budgets and equipment requirements. Flexible financing alternatives have been able to respond to shifting needs by allowing for the speedy deployment of critical assets as well as the preparation for an influx of future procedures when the economy recovers, all while limiting upfront cash limitations.

The major factors driving the growth of this market include the high cost of healthcare equipment, rise in demand for advanced healthcare equipment, rising number of hospitals and clinics offering advanced care, and tax benefits of leasing equipment, among others.

Rising partnerships for medical equipment financing in the small and mid-size hospitals in underdeveloped and developing countries are expected to propel the growth of this market over the forecast period. For instance, in May 2021, GE Healthcare and NSIA Banque Côte d'Ivoire have partnered with International Finance Corporation (IFC's) Africa Medical Equipment Facility to support healthcare providers in Cameroon, Côte d'Ivoire, Kenya, Rwanda, Senegal, Tanzania, and Uganda access essential medical equipment to help small businesses in Africa's health sector strengthen their response to COVID-19 and other pressing healthcare challenges.

In addition, in February 2020, Wells Fargo & Company established a vendor financing arrangement with Siemens Healthineers, which will provide hospitals and health systems across the United States with competitive, comprehensive financing choices. Siemens Healthineers clients will be offered comprehensive and affordable financing alternatives through the Wells Fargo Medical Equipment Finance Program, which will help with technology acquisition. Such initiatives will lead to increased adoption of medical equipment leasing services by healthcare organizations, driving market growth.

Moreover, according to the study published in EMBO reports, titled 'To buy or to lease in April 2020, academic core facilities can save money by leasing rather than buying scientific instruments, allowing them to keep technologically ahead of the competition while maintaining predictable and constant prices. Leasing, in its different forms, has become an appealing technique for acquiring a wide range of products due to the growing speed of technological progress. Such benefits of leasing over purchasing the healthcare equipment will therefore lead to rising in demand for leasing medical equipment, driving the market growth.

However, highly expensive medical equipment degradation for the lessor and the need to continuously replace the on-demand equipment and keep pace with the technological advancements are the factors that are expected to hinder the market growth.

Scope of the Report

As per the scope of the report, healthcare equipment lessors and lessees enter into an arrangement in which the lessor permits the lessee to use the equipment for a set amount of time in exchange for lease rentals. Leasing businesses can finance costly medical equipment such as MRI machines, X-Ray machines, and ventilators without having to put up big sums of money upfront. At the end of the lease term, the equipment can be returned to the lessor or acquired at the current market price. The Healthcare Equipment Leasing Market is segmented by Product (Durable Medical Equipment, Surgical and Therapy Equipment, Personal and Home-Care Equipment, Digital and Electronic Equipment, Storage and Transport Equipment), End User (Hospitals, Diagnostic Centers, Clinics, Others), and Geography (North America, Europe, Asia-Pacific, Middle East, and Africa, and South America). The market report also covers the estimated market sizes and trends for 17 different countries across major regions globally. The report offers the value (in USD million) for the above segments.

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Key Market Trends

Durable Medical Equipment Segment is Expected to Hold a Major Share in the Market Studied

The durable Medical Equipment segment is expected to hold a significant share in the market studied.

Durable medical equipment (DME) are devices and products intended for medical purposes and allowing frequent and/or repeated use. Patients now prefer postoperative and long-term care at home. Consequently, the growing demand for home care services provides opportunities for DME manufacturers, thereby driving the market growth.

According to the news published in March 2020, Respiratory equipment is provided (and maintained) by DME vendors for patients at home during the pandemic. Besides that, hospitals are now asking DME suppliers to rent respiratory equipment to them, in an interesting (but not unexpected) twist, so that the hospitals can deal with the influx of COVID-19 patients. Suppliers of durable medical equipment have stepped up to help hospitals. Such instances have further impacted this segment's growth during the pandemic.

In addition, according to the news published in December 2021, The Centers for Medicare and Medicaid Services (CMS) has made certain durable medical devices, such as continuous glucose monitors, more accessible to Medicare beneficiaries. The Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) final rule establishes methodologies for adjusting the Medicare DMEPOS fee schedule amounts, as well as procedures for making benefit categories and payment determinations for new items and services that are DMEPOS, therapeutic shoes, and inserts, surgical dressings, or splints, casts, and other devices used for reductions of fractures and dislocations under Medicare Part B. Such an initiative of covering the DME fees under medicare will boost this segment's growth significantly.

Therefore, owing to the above-mentioned factors, this segment is expected to drive in the market studied.

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