LONDON--(BUSINESS WIRE)--Hospitals across the globe are becoming increasingly confident about their growth prospects for the year ahead despite rising costs and ongoing economic uncertainty, according to GE Capital’s inaugural Hospital Sentiment Research – a report based on interviews with more than 380 senior hospital executives with responsibility for budget decisions over eight international markets1.
In the backdrop of ongoing austerity measures and enhanced scrutiny of global healthcare systems, the report highlights specific areas of positivity for the hospital industry, finding hospitals are delivering more than ever before, often with insufficient resources. It also finds hospitals are making clear efficiency gains to enhance competitiveness, but that the need to invest in new equipment is becoming ever more crucial to sustain this efficiency.
The research finds both private and public hospitals report bullish growth profiles over the next 36 months: 90% of private hospitals expect to grow in this time period, with 15% expecting to see rapid growth. 84% of public hospitals expect to see growth, with 15% citing rapid growth. 46% of private hospitals expect this to translate to future profitability, vs. a more conservative 27% of public hospitals.
Investment and purchasing decisions of hospital managers are being driven mainly in order to replace deteriorating existing equipment (16%) and for the pursuit of efficiency gains (17%) reflecting a sector that is adapting to a challenging environment but remaining optimistic about its ability to meet patients’ needs. Perhaps unsurprisingly, the top reason for not investing is the economic environment (30%).
Peter Krause, Head of GE Capital’s Healthcare Financial Services team, commented: “Hospitals are under immense strain, dealing with ongoing spending pressure and the pressing need for improved quality of care. It is encouraging, however, that hospitals are keen to adopt crucial new technologies that can not only advance treatments to patients but also enable them to continue to achieve quality and efficiency gains that are necessary to win in this environment.”
Meanwhile, the research highlights a clear trend towards increasing hospital costs – with 40% of all hospitals foreseeing an increase in costs in the next year – versus only 18% saying they expect costs to decrease. Decreasing costs are set to derive mainly from the private sector – on one end of the scale driven by downsizing but in most cases as a result of aggregated purchasing, hospital consolidation and process optimisation – incorporating outsourcing and automisation.
Heinz Kölking, President of the European Association of Hospital Managers, said: “The environment for healthcare providers remains difficult. Hospitals are required to deliver more than ever before often with insufficient resources at their disposal and this trend is likely to persist. However, the results show that many hospitals are confident in their ability to meet patient demands and to continue providing them with the best treatments available.”
Other key findings of the research include:
- Hospital managers cite traditional banks, leasing providers and specialist medical lenders as their three most preferred finance providers
- Meanwhile, the most preferred forms of obtaining equipment are leasing, buying outright, and through securing a bank loan
- 55% of private hospitals said they were profitable in 2013, compared to 16% public 66% of public hospitals broke even and 18% were loss-making (vs. 11%, private)
- General imaging remains the type of equipment that hospitals are devoting most spend towards, both this year & next. GI units are typically expensive and integral to the whole patient care pathway – incorporating diagnosis, treatment and monitoring
- Spending on Surgical Robots is set to more than double in 2015
Looking ahead, the research also highlights hospitals are opting to upgrade their technologies rather than purchase new machines outright. This is particularly prevalent for General Imaging and Endoscopy equipment, where over a quarter of all future investment is set to be made due to the deterioration of the current equipment base.
Jean-Michel Malbrancq, President & CEO of GE Healthcare, Europe said: “We see an interesting trend developing around solutions-based financing such as the managed equipment services model, which is already popular in the UK and Australia. We see this as likely to continue to grow as new market demands place ever more pressure on hospital managers to do more with less.”
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About the research
The research was based on a survey of 382 hospital decision makers across the following countries:
- Australia, Germany, France, Italy, Japan, Switzerland, Spain, & U.K
Hospital decision makers were surveyed from public, private, and non-profit hospitals using the largest, most reputable global internet panel partners.
- To qualify for the survey, the decision maker had to have sole or shared decision-making authority over the purchasing of equipment and services for their hospital
- Data was collected via a self-administered online survey.
- Fielding was anonymous – GE Capital was not mentioned as the research sponsor
The survey was conducted by GE Capital’s in-house research team and fieldwork took place in Q3 2014.
About GE Capital International
GE Capital International is a leading, global provider of specialist finance to the mid-market, with headquarters in London and serving customers from 30 markets across EMEA and Asia Pacific.
GE Capital International is focussed on driving growth in its core commercial leasing & lending products and markets. It provides mid-market customers with a wide range of financing solutions including accounts receivable management, inventory finance, asset backed lending, cross-border financing, leveraged finance, leasing/vendor finance and fleet management solutions.
For more info, visit www.gecapital.eu.
About GE Capital Healthcare Financial Services
GE Capital Healthcare Financial Services aims to support healthcare institutions in creating a sustainable financing strategy by offering financing solutions that make technology and medical equipment more accessible. We can fund single or multiple equipment from a various manufacturers, and for a range of different purposes through our wide range of structured and bespoke financial solutions.
Being part of GE, one of the world’s largest producers of medical technologies, gives us a distinctive insight into the complex healthcare industry that makes us stand apart from traditional banking institutions. This unique industry insight enables us to tailor sophisticated solutions for customers across the world. Additionally through the ‘Access GE’ programme, we give customers access to GE’s experience and expertise to help solve business issues and challenges. http://www.gecapital.eu/healthcare
1 France, Germany, Italy, the UK, Spain, Switzerland, Japan, Australia
