Accelerated economic growth will cause consumer incomes to rise, boosting industry demand
New York, NY (PRWEB) January 27, 2015
The Medical Patient Financing industry, which extends credit to consumers to cover medical procedures, has struggled to adapt to subdued demand and a changing healthcare environment. Following declines in the early part of the period, as consumers delayed elective medical procedures, industry revenue started to trend upward as demand strengthened in 2013, somewhat offsetting the industry's poor performance after the recession. Over the five years to 2015, IBISWorld estimates that industry revenue will slightly decline at an average annual rate of 0.6% to $4.0 billion.
According to IBISWorld Industry Analyst Leah Goddard, “The recession eroded the financial condition of many households, causing consumers to cut back on costs while paying off existing debt and taking on less new debt.” In particular, consumers chose not to undergo or to delay elective medical procedures that industry operators typically finance, such as dental work and cosmetic treatments. At the same time, industry operators tightened lending standards for consumers, which limited the number of patients that could qualify for industry financing and accelerated this contraction. The spike in loan losses and delinquencies caused industry profit to shrink in 2010; however, given the shift to higher quality borrowers, Medical Patient Financing industry profit has since rebounded to above its historical average in 2015.
“Pent-up consumer demand for health services, coupled with improved household debt, has helped industry revenue to rebound,” says Goddard. Rising healthcare costs have boosted demand for industry financing in recent years. In addition, widening gaps in insurance coverage, especially in states that did not expand Medicaid, have also contributed to industry growth. IBISWorld anticipates that revenue will grow 2.9% in 2015 due to increased consumer demand for medical procedures.
The industry is expected to continue expanding over the next five years. Improving economic conditions and increasing healthcare expenditures will drive industry growth. However, the expansion of public and private health insurance coverage and greater access to credit and per capita disposable income will also slow consumer demand for third-party financing because consumers will be able to cover more of their health expenditures with insurance, traditional credit cards and savings. Therefore, although growth opportunities are available, industry revenue is projected to remain below its prerecessionary peak over the next five years.
For more information, visit IBISWorld’s Medical Patient Financing in the US industry report page.
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IBISWorld industry Report Key Topics
The Medical Patient Financing industry includes companies that are primarily engaged in extending credit facilities to consumers to cover healthcare costs and related expenses. Financing can be provided for elective and non-elective medical procedures.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.