Medical Equipment Rental and Leasing

SIC 7352

Companies in this industry

Industry report:

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.

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.

After struggling through the economic recession of the late 2000s, the medical equipment rental and leasing industry was looking toward a recovery. According to the Equipment Leasing Association (ELA) in November 2010, "We are beginning to see signs of growing pipelines and a strengthening in fourth quarter bookings that combine to foster increased optimism heading into 2011. New business volume appears to be most robust in the areas of trucking, technology and healthcare."

According to Dun & Bradstreet, 3,002 establishments engaged in the medical equipment rental industry in 2010. Together these firms employed 34,834 people and generated more than $2.9 billion in revenues. Especially important markets included hospitals, diagnostic imaging centers, chronic disease treatment centers, and physician group practices and clinics.

In 2010, one of the leaders in this industry was Apria Healthcare Group Inc. of Lake Forest, California. In addition to providing medical equipment for those with respiratory conditions, the firm rented and leased such items as walkers and hospital beds. Owned by the Blackstone Group, the company employed 13,276 people in 2009. Rotech Healthcare Inc. of Orlando, Florida, was another major provider of respiratory-assistance equipment and other health care equipment. With 3,800 employees, Rotech had sales of $479 million in 2009. Universal Hospital Services of Edina, Minnesota, which leased more than half a million pieces of equipment to hospitals and care providers in the United States, had 1,520 employees and sales of $297 million in 2009. Finally, with 5,150 employees, Hill-Rom Co. Inc. of Batesville, Indiana, was a major hospital-bed manufacturer and also rented medical equipment like infusion pumps and ventilators.

More than 85 percent of the medical equipment rental and leasing establishments in the 2000s were owned by corporations, compared to about a 60 percent average for other service industries. This preponderance of corporate ownership is due largely to the expensive nature of medical equipment, which at once predicated the industry's existence and limited entry to those individuals or corporations possessing substantial cash reserves. Sole proprietorships constitute 10 percent of industry establishments, compared to over 30 percent in other service industries. The remaining 5 percent are controlled through partnerships.

According to Dun & Bradstreet, Texas was home to the largest number of medical equipment leasing businesses in 2010, with 311, as well as the most employees2,595, followed by Florida with 277 establishments and 2,437 employees and California with 206 establishments and 2,356 employees. Florida was the number-one state in terms of industry revenues, accounting for $633 million, or about 22 percent of the nation's total. Minnesota accounted for 11 percent of the total, with $326.4 million, and California had about 9 percent, with $262.5 million.

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