UK Leasing

Transition from a product-centric to a solutions-centric approach improves customer retention and margins

Dublin, October 01, 2021 (GLOBE NEWSWIRE) – The “Global Opportunities for Growth in Medical Device Rental” the report was added to offer.

Globally, hospitals and healthcare systems face financial pressures caused by high operating and administrative costs, declining revenues and reimbursement rates, and rising costs of medical devices (especially due to technological progress) and infrastructure.

The COVID-19 pandemic has intensified this financial crisis as patient volumes have plummeted and again negatively impacted revenues. Despite these challenges, hospitals must invest in technology that improves operational efficiency and patient outcomes. Cutting-edge technology is attracting more patients and helping hospitals recruit or retain qualified clinicians by improving their skills and motivation. However, many hospitals and healthcare systems aim to conserve cash, making them reluctant to spend large sums on capital goods prone to obsolescence. Therefore, hospitals need other financing or procurement options. This need leads to innovative procurement models such as leasing among medical device OEMs and leasing companies.

Leasing models allow hospitals to purchase state-of-the-art equipment while saving money, with the option of owning the devices or renewing contracts at the end of the lease term. In addition, some medical device suppliers are improving the affordability of medical devices for hospitals through innovative financing; others partner with third-party finance companies to design customized financial solutions. Innovative sales models such as leasing not only improve device adoption by healthcare providers, but also improve revenues for OEMs and leasing companies through the introduction of offers at added value. In developed markets like the United States, as vendors come under increasing pressure from payers to contain costs through value-based reimbursements, vendors are demanding that medical device vendors share the risk and offer improved value beyond their products.

Leasing catalyzes the creation of new opportunities for suppliers to introduce service-based business models, such as inventory optimization and asset management, predictive maintenance and equipment lifecycle management. Leasing of medical devices enables hospitals in developed markets to improve device efficiency by shifting the risk of equipment downtime to vendors and allowing them to focus on core clinical goals while improving patient outcomes . In emerging markets, leasing improves access to appropriate technologies at a lower initial cost to suppliers. Leasing allows OEMs to shorten the sales cycle, avoid huge discounts because the cost is stable and ongoing, bundle solutions and create a recurring revenue stream. With continued financial pressure on suppliers and growing demand from medical device suppliers, the product-based merchandising model will pave the way for a rental or servitization model, which benefits all stakeholders in the industry. value chain.

Key themes of this research service:

  • Impact of key strategic imperatives on the global medical device rental market

  • Scenarios favoring the rental of devices

  • Changing the dynamics of health service delivery

  • Benefits of leasing models for device providers

  • Transition from the product financing model to the servitization model

  • Value drivers across distinct markets and end users

  • Leasing value chain

  • Maturity of the solution in the supplier landscape

  • The best growth opportunities

Main topics covered:

1. Strategic imperatives

2. Market overview

  • Segmentation of the medical device rental market

  • Leasing of medical devices motivated by budget constraints and the need to preserve cash flow after COVID-19

  • Favorable conditions make leasing the preferred method of financing medical devices

  • Favorable leasing scheme scenarios for suppliers

  • Increased operating costs, lower reimbursement rates and lower volume induced by COVID-19 for healthcare systems to accelerate adoption of the leasing model

  • Leasing or alternative purchasing trends in key segments

3. Factors Affecting the Adoption of the Rental Model

  • Determinants of MedTech Acquisition (New, Replacement and Upgrade)

  • Main drivers of the adoption of the medical device rental model by suppliers

  • Main constraints to the adoption by suppliers of the medical device rental model

  • Changing health service dynamics favor leasing as an alternative procurement model for providers

4. Value proposition for donors

  • Key challenges and benefits throughout the lifecycle of medical devices reduced by the rental model

  • Benefits of the Leasing Model for Medical Device Suppliers

  • Leasing has started the servitization trend for suppliers, generating higher margins for OEMs

  • Leasing providers must decipher value drivers among distinct markets and end users

5. Competitive landscape

6. Universe of growth opportunities

  • Growth Opportunity 1: COVID-19 Catalyzes Exploration of Leasing Models Among Healthcare Administrators

  • Growth opportunity 2: Partnering with leasing companies enables OEMs to improve market access, personalize offerings and strengthen their positioning

  • Growth Opportunity 3: Transition from a product-centric to a solution-oriented approach improves customer retention and margins

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