Los Angeles, CA (PRWEB) July 09, 2012 -- Firms in the Medical Patient Financing industry have struggled to adapt to recessionary conditions and a changing healthcare environment. Over the 5 years to 2012, IBISWorld estimates that industry revenue declined at a 4.2% average annual rate to about $2.9 billion. The recession eroded the financial condition of many households, which pressured them to cut back on medical-related costs. In particular, says IBISWorld industry analyst Doug Kelly, “Consumers chose not to undergo or to delay elective medical procedures that industry firms typically finance, such as dental work, plastic surgery, cardiovascular or gynecologic surgeries.” This contraction was further accelerated by industry operators that reacted to the recession by tightening lending standards for patients, which limited the number of patients that could qualify for industry financing. The spike in loan losses and delinquencies also caused industry profit to decline over the past five years.
Pent-up consumer demand for health services helped industry revenue rebound 6.8% in 2011. Rising healthcare costs, combined with rising health and medical insurance (IBISWorld report 52411b) deductibles and copayments, boosted demand for industry financing. In addition, says Kelly, widening gaps in insurance coverage also contributed to industry growth. IBISWorld anticipates that revenue will grow 4.6% in 2012. The Medical Patient Financing industry is fragmented, with only one major player, General Electric’s CareCredit business, capturing more than 5.0% of industry revenue.
The industry is expected to continue expanding over the next 5 years. Improved economic conditions and increased healthcare expenditures will drive industry growth. However, the expansion of public and private health insurance coverage will also slow down healthcare costs and slow consumer demand for third party industry financing because consumers will be able to cover more of their health expenditures with insurance, traditional credit cards and savings. Therefore, although the industry is forecast to find growth opportunities, the industry will remain below its 2005 peak over the outlook period. For more information, visit IBISWorld’s Medical Patient Financing in the US industry report page.