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 8,100 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.

Growing Industry Consolidation

In recent years, the medical, dental and hospital equipment and supplies distribution industries have undergone consolidation.

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.

Industry size & Structure

The average medical equipment distributor employs 32-33 workers and generates $16 million in annual revenue.

    • There are about 8,100 distributors with total sales of $129 billion and 263,200 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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Dec 1, 2022 - Surge In Respiratory Illnesses Drives Demand For Cribs
                                • A trio of respiratory viruses that is spreading across the country has caused demand for hospital-grade cribs to surge as pediatric hospitalizations soar. Pediatric hospital beds have been more full than usual for months. Children’s health leaders have called for a formal emergency declaration from the US government to support hospitals and communities amid an “alarming surge of pediatric respiratory illnesses, including respiratory syncytial virus (RSV) and influenza, along with the continuing children’s mental health emergency.” Demand at Hard Manufacturing, which makes cribs, bassinets, and youth beds for hospitals, has shot up, President Marjorie Bryen said. “It’s been a crazy time over the past 4-6 weeks and it doesn’t appear to be calming down anytime soon,” she added.
                                • High purchase cost is often a major barrier to entry for companies working in logistics, manufacturing, fulfillment, and other industries where automation is required to remain competitive and counteract labor shortages. Some robotics companies offer a robotics-as-a-service (RAAS) model that allows customers to lease or rent robots to avoid high up-front purchase costs. There are two major RAAS models: leasing, and payment per transaction or task performed. “The flavor more associated with RaaS today is charging per unit of work,” said Peter Sieff, CEO of Aethon, which specializes in autonomous mobile robots that work in healthcare and hospitality settings. “Instead of charging for the hardware and software as a product itself you pay for the service it is delivering. Companies often rent and buy robots based on needs or market trends. Companies may rent first and then buy, or they may rent robots during peak demand season.
                                • President Biden signed an executive order that is intended to quickly increase domestic production of semiconductors, strengthen semiconductor research, and extend US semiconductor design leadership. The order, which follows passage of the $280-billion CHIPS and Science Act into law, will establish a 16-member implementation steering council made up of cabinet secretaries and top White House officials from across Biden's national security and economic teams. The order also details Biden's six priorities for implementing the Chips and Science Act in the months ahead. Details include a series of factors that should guide the timely development and oversight of the private sector relationships required for the allocation of funding that is meant to enhance long-term economic and national security by increasing domestic chip manufacturing.
                                • The CHIPS and Science Act is a scaled-down version of previous bills. It includes more than $52 billion for US chipmakers as well as tax credits for domestic factories but isn't expected to affect production in the short term. The medical equipment industry is likely to benefit over time, but experts note that it will take companies years to build new factories and otherwise upgrade facilities to tackle chip shortages and increase manufacturing independence.
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