Medical Equipment Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,500 medical equipment distributors in the US sell and distribute a broad range of medically related products, principally to hospitals, physician and dental practices, alternative care and rehabilitation facilities, and directly to the home healthcare market. Major categories of products include medical/surgical instruments and equipment, medical and hospital supplies, and dental equipment and supplies.
Complex Billing and Record Keeping Requirements
Medical equipment distributors are frequently subject to many stringent and complex billing and record-keeping requirements in order to substantiate claims for payment under both government and private insurance healthcare reimbursement programs.
Growing Industry Consolidation
The medical, dental, and hospital equipment and supplies distribution industries have undergone consolidation in recent years.
Industry size & Structure
The average medical equipment distributor employs 35-36 workers and generates $15 million in annual revenue.
- There are about 8,500 distributors with total sales of $129 billion and 310,000 employees.
- The hospital equipment and supplies market is dominated by the influence of Group Purchasing Organizations.
- The physician office-based practice market is increasingly being influenced by the growth of Integrated Healthcare Networks, as more independent physician practices merge and consolidate.
- Dental practices have generally remained small and independent, leaving distributors with unique challenges in servicing a large number of small, scattered customers efficiently and profitably.
- The three largest medical/dental product distributors are Owens & Minor, Henry Schein, and Patterson Companies.
Industry Forecast
Medical Equipment Distributors Industry Growth
Recent Developments
Sep 4, 2024 - Transparency Increases Medical Device Supply Chain Compliance
- Transparency and traceability are increasingly important to medical device suppliers, manufacturers, distributors, sales intermediaries, and providers due to the high level of supply chain regulation and complexity, according to Medical Products Outsourcing magazine. The Health Insurance Portability and Accountability Act (HIPAA), the Health Information Technology for Economic and Clinical Health Act (HITECH), and the EU’s Medical Device Regulation (MDR) are some of the more notable laws that they must adhere to. HIPAA and HITECH require full documentation for the privacy of health information that companies have access to. FDA regulations such as 21CFR, FDASIA, ISO9001, ISO/IEC 17025, and GMP require auditable books of record for compliance. The SEC in the US and the CSRD in the EU lay out ESG-related rules that companies must follow—and prove they follow—via disclosures around carbon emissions (including emissions from the whole supply chain, what we call Scope 3 emissions), supplier diversity, forced labor, and more. Transparency throughout all parties of the supply chain and the relevant data that passes up and down the chain is key in each of the above requirements, according to Medical Products Outsourcing. This requires that companies trace the origins of their products and maintain a record of all their third parties, including n-tier suppliers, to ensure that they’ve covered all their bases.
- Medical equipment distributors offering end -to-end services including project management, delivery and installation services, and biomedical services may be a source of cost savings and improved efficiencies for health care providers, according to Beckers Hospital Review. Distributors that offer end-to-end services in addition to medical equipment expertise offer benefits to an industry that is, in many ways, still reeling in the aftermath of the staffing shortages and escalating equipment prices that have dominated the last several years. As the intermediary between the providers and manufacturers, medical equipment distributors can not only help configure equipment for optimal efficiency, they can also positively impact the workflow of purchasing departments by taking care of the time-consuming business of collecting quotes from multiple manufacturers.
- The US Department of Health and Human Services (HHS) said in early May that it will finalize a rule that adopts the US Access Board’s standards for accessible medical diagnostic equipment. The rule applies to all programs and activities that receive funding from HHS and requires that services be provided in the most integrated setting possible. HHS has acknowledged that “significant discrimination” has persisted in the health care system. Disability advocates have sought regulation updates for years, citing concerns ranging from the proliferation of inaccessible medical equipment to issues accessing organ transplants and health care rationing in crisis situations, according to Disability Scoop.
- Medical equipment distributor industry employment was unchanged during the first five months of 2024 while wages for nonsupervisory employees increased slightly, according to the US Bureau of Labor Statistics. Medical equipment distributor sales remained above pre-pandemic levels during the first quarter of 2024, according to the US Census Bureau (CB). Inventory to sales ratios also remain above pre-pandemic levels during the first quarter of 2024, according to the CB.
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