An aging population and more insured people will aid demand for home medical equipment
Los Angeles, CA (PRWEB) May 18, 2012
The Home Medical Equipment Rentals industry has adapted to a shifting landscape during the past five years. Changes in Medicare regulation resulted in higher costs and limited revenue for operators. Meanwhile, high unemployment during the Great Recession and a slow recovery resulted in fewer insured people and limited disposable income, which dented demand for home medical equipment rentals because some people could no longer afford them. As a result, IBISWorld estimates that revenue will decline at an annualized rate of 1.5% to $5.9 billion in the five years to 2012. According to industry analyst Agata Kaczanowska, “this rate includes a 0.4% revenue rebound from 2011 to 2012, as unemployment recovers, which is expected to lead to a slow rebound in disposable income and the number of people with private health insurance.”
In response to limited demand, the Home Medical Equipment Rentals industry consolidated during the past five years. For example, major company Lincare acquired 15 local and regional companies in 2011 alone. On a smaller scale, industry operator Rotech acquired two companies in 2011. Consequently, the number of companies in the industry is estimated to decline at a 1.8% annualized rate to 728 firms in the five years to 2012. According to Kaczanowska, “this rate of decline is forecast to continue during the next five years to 664 enterprises in 2017, as companies like Lincare and Rotech continue aggressive acquisitions.” An increase in online rental transactions is also stimulating consolidation because the internet's broad audience reach encourages and enables companies to service an expanding area.
During the next five years, a rebound in unemployment is expected to lead to an increase in the number of people with private health insurance and will also boost disposable income, enabling more people to use industry services. Also, higher federal spending on disability benefits, Medicare and Medicaid is forecast to benefit the industry. Furthermore, as baby boomers retire, the number of people aged over 65 will grow at a faster pace, contributing to a wider market for industry services and boosting performance. IBISWorld estimates that industry revenue will grow in the five years to 2017.
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This industry rents devices that are designed to aid in the diagnosis, monitoring or treatment of medical conditions to individuals in their homes. Examples include respiratory and mobility aids such as oxygen tanks and electric scooters.
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