This classification comprises establishments primarily engaged in renting or leasing (except finance leasing) medical equipment. Establishments included within this industry may also sell medical supplies. Those establishments primarily engaged in finance leasing are classified in SIC 6159: Miscellaneous Business Credit Institutions.
Home Health Equipment Rental
Other Commercial and Industrial Machinery and Equipment Rental and Leasing
The medical equipment rental and leasing industry provides an alternative to purchasing equipment outright. For many individuals and health care institutions, the advantages of renting or leasing expensive, high-technology equipment — subject to obsolescence as advances in medical technology spawned new, improved equipment — outweighed the advantages of purchasing such equipment. These advantages included preserving cash flow, increased flexibility to replace old equipment, and improved timeliness in acquiring the newest technologies.
According to the Equipment Leasing Association (ELA), the estimated size of the U.S. health care equipment leasing market in 2005 was around $7 billion in terms of new volume. The ELA also predicted that the health care equipment leasing market would $8 billion in volume by 2007. Most of this expected growth was attributed to increased equipment sales, rather than gains in lease penetrations into the market.
The 1,640 establishments engaged in medical equipment renting and leasing (excluding home health equipment) showed revenues of $2.3 billion in 2002. About 14,200 employees worked in the industry that year. Home health care equipment rental, on the other hand, had 2002 revenues of $3.8 billion from 2,805 establishments and 26,956 employees.
Revenues in the medical equipment leasing and rental industry were expected to grow throughout the 2000s. Markets for the industry in the new millennium were hospitals, diagnostic imaging centers, chronic disease treatment centers, and physician group practices/clinics.
In 2005, one of the leaders in this industry was Apria Healthcare Group Inc. of Lake Forest, California, with 11,178 employees and revenues of $1.47 billion. Universal Hospital Services of Edina, Minnesota, which leased equipment to 6,250 hospitals and care providers in the United States, had 1,188 employees and sales of $199 million, showing an annual growth of 16.7 percent. Universal Hospital...