THE MEDICAL EQUIPMENT LEASING & RENTAL

SERVICES INDUSTRY

(September 1999)

 

Table  Of  Contents                                                                                                                

                                                                                                                                                                                                                                                                                                                                                                                                                                                Page

 

INTRODUCTION: Study Scope & Methodology                                                           1-4   

 

NATURE OF MEDICAL EQUIPMENT LEASING:

(How The Industry Operates)                                                                                                     5-12

 

* Discussion of industry characteristics, why lease vs. buy?, type of equip. leased,

    discussions of  computed tomagraphy, magnetic resonance imaging, positron emission

    tomagraphy                                                                                                                              

* Past surveys regarding hospital financing preferences-most popular methods

* Typical kinds of medical equipment leased, diversification by lessors into other

     kinds of equipment                                                                                                                  

* How lease and equipment loans transactions work (types-terms, length, contract

    logistics, capital leases, operating leases, terminations)

* Newly emerging financing methods - results of 1999 custom survey                                      

 

                       

EXECUTIVE OVERVIEW OF MAJOR FINDINGS   ($195)                                              13-36

 

* Discussion/summary of key findings/highlights of all study chapters: nature of the

    business, industry trends and future outlook by competitors, evolution of the

    industry from 1980s, current factors affecting demand for medical equipment and

    leasing/rental/used equip., total industry size (1987-97 actual receipts, 1998-99 estimates,

    2003 Marketdata forecasts), size of rental and used equip. markets, customer end user

    mix, status report of diagnostic imaging markets (1996-98 size, U.S./world machine

    sales), major findings of 1999 survey of ELA members, 1997 state Census data, industry

    structure & key operating measures, composite industry financial statement.

 

FINDINGS OF 1999 CUSTOM SURVEY OF ELA MEMBERS LEASING MEDICAL EQUIPMENT - Outlook, Sales Growth, Operations  ($100)                                              37-44

 (Discussion and tabulation of following topic questions)

 

* 1998 average sales increase from leasing medical equipment

* Forecast growth rate over next 5 years - group average

* List of top concerns, problems, issues facing medical equip. lessors

* End-user trends: popularity (more, less, same) of leasing among: hospitals, diagnostic

    imaging centers, MD group practices, now vs. 3 years ago (percentages)

* Percentage of lessors leasing used or refurbished  equipment

* List of new/emerging financing methods

 

 

 

FINDINGS OF 1999 CUSTOM SURVEY OF ELA MEMBERS  (continued)                                  Page

 

* Opinions of types of machines hospitals most likely to lease in 1999 - ranked

* Expectations of sources of future industry growth (acquisitions, foreign mkts.,

    increased penetration of existing mkts., used equip., etc.)

* Ancillary services leasing firms are expected to offer customers in the future.

 

STATUS REPORT OF THE DIAGNOSTIC IMAGING EQUIPMENT

MARKET   ($150)                                                                                                    45-60

 

* Description of kinds of diagnostic imaging equip. (CT systems, MRI, nuclear medi-

    cine, ultrasound, etc.)                                                                                                                        

* Description of 3 main customer groups: (hospitals, imaging centers, MD group practice)

    definition and characteristics, no. of MD group practices, by size, analysis of outpatient

    surgery centers’ growth                                                                                                                    

 

* Discussion of new technology trends (move to smaller less expensive units)

                                                                                                                                                           

* U.S. diagnostic imaging products market: world/US revenues for 1996-98 (analysis by

    industry consultants & Concord Consulting Group), $ volume of CT scanners, MRIs,

    ultrasound, X-ray, PET, nuclear medicine equip. sold.

Table: World diag. Imaging products revenues, by type machine: 1996-98                                                

* Imaging machine uses/characteristics, open MRI and how it boosted the market

* Discussion/analysis of picture archiving & commun. Systems (PACS), major producers,

    adoption of the technology, etc.

Table: U.S. sales of PACS systems, by type: 1996-98

* Diagnostic imaging procedures volume trends (by Technology Marketing Group): no.

   of procedures, sites, installed base of... cardiac catherization labs, nuclear imaging

   facilities, CT & MRI units, diagnostic ultrasound - 1997 Census results, trends.                   

* Competitors’ opinions about consolidation of diag. imaging sector.

* Historical issues and end-user concerns (technology, reimbursement).                                                     

* Hospital equipment spending trends:  results of 1996, 1990 LINC Anthem Surveys -

      major findings/type financing used, cost cutting measures, future plans                                               

Tables: 

*  Medical equipment owned/leased or planned for acquisition, 1990-91 (22 types of

      equipment, LINC survey)                                                                                                                    

*  Profitability of equipment: 1990-91, LINC survey, as above                                                                 

*  Equipment financing sources: % leased, rental, debt/bank loan, internal funds, tax-

     exempt financing, joint venture (as above)                                                                                         

   

SELECT FINDINGS & TABLES FROM 1991-1998 E.L.A. "Annual Surveys

of Industry Activity”  ($125)                                                                                            61-78

* Summary of  major findings of 1999 survey, leasing overall vs. leasing of medical

    equipment

Tables:

  * Distribution of annual leasing volume, by medical vs. other equip: 1998 & 1997 -

       avg. transaction size

   * Distribution of annual leasing volume, by medical vs. other equip: 1998 & 1997 -

       by dollar volume

   * Chart: Distribution of annual volume by equip. type - 1998/1997, by transaction

        sizes ($25,000-250,000, $250,000 to $5 mill., over $5 mill.)                                                

  * Composite ELA member income statement (banks, captives, independent lessors): 1998, 1995 

 

                                                                                                                                                      

 SELECT FINDINGS & TABLES FROM 1991-1998 E.L.A. "Annual Surveys

of Industry Activity” (continued)                                                                                             Page

 

  * Type of equipment under operating lease (1991-1995)                                                                         

  * Type of equipment under direct financing lease (1991-1995)                                                               

  * Type of equipment under leveraged lease (1991-1995)                                                                        

  * Types of equipment for brokerage transactions (1991-1995)                                                              

  * Assumed economic life, by type equipment (1994 & 1995 )                                                                   

  * Noncancellable lease terms & residual value booked, by type equip. (1993-1995)                 

  * Residual value recovered on matured leases, by type equip. (1993-1995)                                               

  * Noncancelable lease terms, by type equip. (1993-1995)                                                                         

 

INDUSTRY SIZE, GROWTH RATE, OUTLOOK  ($250)                                                   79-102

*  Analysis of dollar value of industry receipts, from: Government surveys (Census,

     Service Annual Survey), trade assns. (ELA), leading lessors

* Analysis of preliminary 1997 Census data for 7 states, avg. receipts per estab. And

     estimated 1997 national receipts (Marketdata extrapolation)                                                                                  

* Table: Estimated national receipts of medical equip. leasing/rental firms: 1986-97                      

* Table: ALL Equip. leasing vs. business investment nationwide: 1988-99 F, penetration rate         

* Discussion of methods to measure lease revenues (OEM value, portfolio value,

     receivables, bookings, revenues), appraisal techniques - percent representing actual

     leasing company revenues

* Table: Marketdata estimate & forecasts of true industry receipts:  1987-2003, 1998,

     1999 growth outlooks, estd. share of total receipts for: leasing, rentals, used equip.       

* Table: End user mix:  Estimated share of industry revenues from hospitals, diagnostic

     imaging centers, MD and radiology groups (1992, 1995, 1998, 2003 forecast)                                           

                                                                                                                                         

The Medical Equipment Rental Market:                                                                                              89

* Discussion of why to rent vs. lease or purchase, mkt. trends, recent Medicare recoding

     actions and effect on the market. 

* Discussion of market segments: 1. specialty hospital beds and surfaces, 2. critical care

    equip.

* Discussion of 4 major market competitors, estd. size of market.

* In-depth company profiles (products, services, operations, strategies, financials,

      1998-99 sales performance for:

   - Hill-Rom (Hillenbrand Industries)                                                                                      92

   - Universal Hospital Services                                                                                              93

   - Mediq Prn                                                                                                                       94

   - Kinetic Concepts                                                                                                              96

* Marketdata estimates of market size, growth from 1996-98, 2003F, 1st half 1999

    performance of leaders

Table: Competitor Sales/Market Shares (1994-1998)

 

The Market For Used Medical Equipment                                                                             101

* Discussion & analysis: why used/refurbished equipment is more available today,

    increased demand from cost-conscious hospitals, estimated size of this segment of

    the industry by leasing companies, trade publications, estimated annual growth rate,

    major players in the market.

INDUSTRY STRUCTURE & PERFORMANCE RATIOS   ($150)             103-120

* Summary and analysis: overall industry performance & growth from 1987-92, no.

    of companies operating, corporate vs. other formats of services, top 10 states/geogra-

    phic trends, 1997 state data, industry concentration levels, operating ratios by: annual

    revenue size of  leasing companies & individual establishments, single/multi-unit

    operations, profitability, operating expenses, balance sheet item trends (1990-98)                 103-09

 

Tables:                                  

* Medical equip. leasing firms, by legal form of organization: 1992 &1987 (corporation,

    proprietorship, partnership)                                                                                                                    

* Leasing services' ratios by single vs. multi-unit operations: no. of firms, estabs., receipts,

    payroll (1987 &1992)                                                                                                                          

* Industry concentration ratios: share of industry revenues for top 4, 8, 20, 50 firms

    (1987 & 1992)                                                                                                                                     

* Leasing services, by annual receipts size of FIRM: (1992), receipts under $100,000 -

    $50+ mill., no. of firms, estabs., receipts, payroll, no. of employees                                                           

* Leasing services, by employment size of FIRM: (1992), under 5 employees - 1,000+

* Leasing services, by receipts size of ESTABLISHMENT (und. $10,000-$10+ mill.):

    1992, ratios as above                                                                                                                            

*  Leasing services, by employment size of ESTABLISHMENT (1992), ratios as above                

* Receipts of leasing services, by state (1992): no. of estabs., receipts, avg. receipts

     per estab.                                                                                                                                                       

* Composite industry financial statement for medical equipment leasing services as a

    group-avg. balance sheet/income statement, for all asset sizes (1990-98), also by

    company sales size.                                                                                                                             

                                                                                                                                         

 PROFILES OF KEY INDUSTRY COMPETITORS   ($200)                                        121-143

(For most companies below: historical development of firm, 5-year finances, recent

performance, divisions, recent mergers/joint ventures/acquisitions, equipment or market specializations, strategies, value of lease portfolios, etc.)

 

     * Citicorp Distribution Finance                                                                                               121

     * Comdisco Healthcare Group                                                                                               122                    

     * Copelco Capital                                                                                                                 124

     * DVI, Inc. (incl. old Concord Leasing profile, predecessor firm)                                             126

     * FINOVA Capital Corp. (incl. former TriCon Leasing)                                                         131

     * GE Capital                                                                                                                        133

     * Newcourt LINC Financial (formerly LINC Anthem)                                                           136

     * Prime Capital Corp.                                                                                                           139

     * Siemens Medical Systems                                                                                                  142

 

DIRECTORY OF MEDICAL EQUIPMENT LESSORS   ($100)                                144-158

* Name, address, phone, key contact for 200 companies engaged

   in leasing medical equipment, current members of the Equipment Leasing Assn.  

 

REFERENCE DIRECTORY OF INDUSTRY INFORMATION SOURCES

(Industry trade associations, trade journals, consulting firms,  government agencies,

  special reports and surveys) - address, phone, contacts)                                                       159