Global Industry Analysts announced the release of its report on medical equipment and leasing and predicts the global market will reach $56 billion by 2017. Major factors propelling market growth include growing incidence of chronic diseases, driving the demand for diagnosis and in turn the need for medical equipment; technological advancements leading to the obsolescence of old equipment; surging prices of medical equipment; and the need to curb healthcare expenses. Healthcare service and equipment providers are increasingly turning to leasing as an economical option for acquiring costly medical equipment and devices.
The report notes rental and leasing of medical devices is fast catching up in the healthcare sector, repelling the traditional loan and credit purchase system. Rental and leasing of medical equipment is an affordable and quick solution for hospitals, nursing homes, and physicians constrained by limited funds due to the recent global economic recession. Leasing enables saving working capital, gives option for purchasing the equipment, and allows upgrades to new technology. Commonly leased medical equipment includes X-ray machines, ultrasound systems, patient-monitoring equipment and laboratory equipment.
Leasing is growing as the most preferred alternative method for financing medical technology in countries such as France, Germany and the U.K. due to the budgetary constraints faced by most of the hospitals in Europe. The German medical equipment market is the largest in the European region. The U.S. represents the next important market for medical equipment, trailing behind the Europe. However, growth is expected from the rest of the world market, which is forecast to exhibit the fastest compounded annual growth of more than 7.0% during the analysis period.
The penetration of medical equipment lease financing in the U.S. has been relatively low until about five years ago, owing to the lack of awareness about leasing, reduction in reimbursements and regulations influencing physician referrals. However, the scenario has changed in recent years, with currently about 35% to 40% of medical equipment in the U.S. being leased.
Major players profiled in the report include Access Equipment Leasing, Agfa Finance Group, Baxter Capital, Elekta Group, GE Healthcare Financial Services, Hill-Rom Holdings, IBM Global Financing, Philips Medical Capital, Siemens Financial Services and Stryker Corporation.
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Jerry Seib and Neal Lipschutz discuss whether the GOP's House victory will impact the implementation of financial reform and health care.
—Elizabeth Williamson
Defense
Within national-security circles and the defense industry, there is some nervousness about whether the new Congress could push broader cuts in defense spending as part of an attack on the swelling federal deficit. In the past, a Republican House and a more conservative Senate would have been a guarantee of continued defense budget growth. But the influx of tea-party candidates, elected on promises to oppose pork-barrel deals and earmarks and reverse the growth of federal spending, could chart a different course. Debate over how much more to spend on the war in Afghanistan could become a test of the new Congress's direction ahead of the administration's deadline to begin phased withdrawals in July 2011.Adding to the uncertainty is the expected departure of Defense Secretary Robert Gates in 2011. Mr. Gates, who served as a secretary of defense under George W. Bush before joining the Obama administration, commands the respect of congressional Republicans.
—Nathan Hodge
Energy and Environment
A Republican House represents a big challenge to Mr. Obama's ambitious agenda on energy and the environment. House Republican leaders have said they intend to fight and if necessary deprive funds to the effort by Mr. Obama's Environmental Protection Agency administrator, Lisa Jackson, to regulate greenhouse-gas emissions across wide swaths of the economy using the Clean Air Act. Ms. Jackson could also come under fire from coal-state Democrats in the Senate.Another potential flash point: offshore drilling. Republicans are expected to call on the Interior Department to speed approval of permits that oil companies need to drill in deep-water areas of the Gulf of Mexico.
Republicans also could challenge the Obama administration's effort to stop construction of a nuclear-waste repository at Yucca Mountain in Nevada—a decision opposed by the nuclear-power industry. Tuesday's victory by Senate Majority Leader Harry Reid, a longtime foe of the project, should keep Yucca Mountain in the deep freeze for now.
—Stephen Power
Transportation
This is supposed to be the year that Congress acts on a big, multiyear bill to finance road building, airport construction and other transportation projects. The Obama administration last year successfully pushed for a delay of action on a proposed $500 billion transportation bill, despite strong protests from House Transportation and Infrastructure Committee Chairman James Oberstar, (D., Minn.) Now, Mr. Oberstar is gone—defeated in his bid for re-election. Ready to take his place is U.S. Rep. John Mica (R., Fla.) Mr. Mica said in a statement Wednesday that passing a long-term highway and transit plan and measures to fund the Federal Aviation Administration and water projects are his top priorities. Mr. Mica also called for a "better directed high-speed rail program." Mr. Mica is more likely than Mr. Oberstar to encourage a bigger role for private investors in building new infrastructure projects, and has called for streamlining the process of getting projects approved.Infrastructure spending is one area where business groups welcome federal spending. The U.S. Chamber of Commerce, which invested heavily to defeat congressional Democrats in the 2010 elections, has supported raising taxes to fund transportation improvements.
—Melanie Trottman
Health Care
Health-care companies see the Republican win as a chance to chip away at aspects of Mr. Obama's health overhaul least favorable to the industry. Insurance companies, drug manufacturers and hospitals say they will press to peel away the law's new taxes on health-care companies, pass tougher medical malpractice curbs and knock down a new board that recommends Medicare spending cuts. Opponents of the law may have the most success removing the law's new tax-reporting requirement that requires businesses to file a 1099 tax form when they pay a vendor more than $600 in a year. Where the health industry is most concerned about the Republicans' plans is the party's strong opposition to the law's requirement that most Americans carry insurance or pay a fine, something that could cost health-care providers millions of new customers. House Republicans say they plan to pass a bill repealing the law. That will almost certainly die in the Senate or on Mr. Obama's desk.—Janet Adamy
Pharmaceuticals
The pharmaceutical industry wants to hold on to concessions it won from Democrats during their reign in Congress, while benefiting from antiregulatory sentiment among Republicans who captured the House, industry lobbyists said.In negotiations over the health bill that passed in March, the industry offered $80 billion in savings and won a promise from the White House not to pursue certain cost-cutting steps such as importing cheaper drugs from Canada. About half of the savings was intended to close a gap or "doughnut hole" in Medicare drug coverage that some seniors face. Despite Republican calls for a repeal of the health law, drug-industry lobbyists say they don't expect a GOP bid to reopen the doughnut hole because it would anger seniors and risk giving wounded Democrats a rallying cry. The incoming Republicans also may be more sympathetic to industry views on regulation, such as the industry's push to continue a system under which companies pay user fees to get faster decisions on drug applications.
—Alicia Mundy
Wall Street
House Republicans didn't wait for the final results of Tuesday's vote to launch their assault on the Obama administration's effort to tighten regulation of Wall Street.Rep. Spencer Bachus, an Alabama Republican who will be one of the contenders to take over the House Financial Services Committee next year, said Wednesday he wants to rewrite "job-killing provisions" of the Dodd-Frank financial-overhaul law, starting with new rules on derivatives trading. Also high on Mr. Bachus's agenda: overhauling mortgage-finance giants Fannie Mae and Freddie Mac. Republicans want to wind down the two companies, currently under government control.
But any effort to change Dodd-Frank would need Democratic support in the Senate, and then Mr. Obama's signature. In the event those aren't forthcoming, House Republicans could try to cut off funding for agencies implementing Dodd-Frank or grill administration officials in Capitol Hill hearings.
—Victoria McGrane
Telecommunications
House Republicans will likely put the brakes on efforts by the Federal Communications Commission to re-regulate Internet lines. Phone and cable companies are fighting the plan, and Republicans have already warned the FCC to drop the plan.Telecom and tech policy issues are likely to take a back seat next year. But Republicans and Democrats could find common ground in efforts to write stronger rules on Internet privacy.On Wednesday, two leaders of the House Energy and Commerce Committee, Rep. Joe Barton (R., Texas) and Rep. Ed Markey (D., Mass.), jointly warned that they plan to put "Internet privacy policies in the crosshairs" with hearings and legislation.