What’s NOT hot in equipment financing (Part 2)

By | July 25, 2013

Ok, let’s wrap up my semi-annual “hot or not” series with another “not”. And it’s actually a huge surprise to me, because this industry I am about to mention has only shown growth every year I’ve been in this business (we’re talking two decades here.)

For the first time in what seems like forever, Medical Equipment has taken a slight downturn. Everyone is stunned at this, but maybe if you think about it, it’s not so stunning. I’ll try to give my theory as to why this is so.

We all heard about the baby boom that started in 1945. You can’t watch the news without hearing about “Baby Boomers”, people born between 1945 and… let’s call it 1960 (depending on what source you read, the ending year varies, but 1960 seems like a good number to me – someone born in 1960 would be 53 this year – that’s about the tail end of what I consider a “boomer”).

Anyway, the “boom” in medical really started when these Baby Boomers started aging. It likely started in the 1980’s, just when some of these folks were hitting their 40’s (because that’s when things start to “creak”). And it just continued as they aged – when you have a huge segment of the population that needs the medical care that comes with aging, medical expenditures will rise.

But now, we’ve probably leveled off. The oldest boomers are now almost 70, and all are over 50, so it’s likely most of them have already seen some kind of advanced medical care by this point. In other words, we don’t have a huge population segment facing heath issues – they are already there. To put it another way, in general terms, hospitals and medical facilities have all the CT Scan machines (et al) they need – there’s not going to be a crowd waiting to use them for the first time like there was during the past 20 years. So it’s just normal that it levels off.

How’s that for an explanation? Pretty sound, right? Now if you’ll excuse me, I’m going to look into investing in nursing home facilities (betting that makes my hot list in two years!)

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