The healthcare industry is, arguably, one of the most heavily impacted industries by the COVID-19 pandemic. Pre-pandemic, it was expected that transformative technologies like artificial intelligence, at-home diagnostics and virtual care would continue to gain traction through 2020 and beyond. While wheels were already in motion in these areas, last year’s unexpected events swiftly increased the rate of adoption for these technologies and opened new areas of opportunity for 2021.

Impact of COVID-19

When it came to equipment, there was a rapid pivot in the demand for certain assets. Early in the pandemic, some hospitals scrambled to accommodate the influx of patients. There was a shortage of beds, ventilators, ambulances, personal protective equipment (PPE) and more. For certain geographies, surges of COVID-19 cases did not materialize, but the imposed restrictions (and understandable reluctancy) still resulted in a drop in elective and non-emergency procedures, ultimately negatively impacting revenues and staffing, not to mention patients. These began picking back up over the summer months, but as cases spiked again toward the end of the year, elective procedures and routine visits again slowed.

While many customers sought temporary payment relief and paused acquisition plans, there was also a clear demand for specific asset types. To meet the shift in demand, the equipment finance industry saw extended payment terms offerings become an increasingly popular solution, as they allowed providers to quickly scale equipment as needed – acquiring immediately and beginning to pay later. We expect flexible payment solutions to remain a popular option as providers seek to preserve cash as the economy recovers.

What’s Next in Healthcare

2020 has shown us that ensuring a strong future for the healthcare industry requires embracing flexibility and change and leveraging innovation.

Digitalization has become a major component in a sustainable healthcare model. Virtual care and telemedicine enabled the continuity of care during the recent health crisis, and these solutions are expected to continue growing in importance as patients value the efficiency and convenience. In fact, according to Frost & Sullivan, the telehealth market is now projected to grow seven-fold by 2025.

As virtual care continues to grow, innovations in at-home diagnostics will continue to evolve, optimizing the level of care providers can offer through a computer screen or mobile device. Some examples include wearables with enhanced features that capture and provide real-time data, at-home breathing tests that measure lung capacity and the use of distance monitoring of medicine through chips that allow doctors to intervene when needed.

In addition, we expect to see increased deployment of technology to disinfect and sanitize surfaces in hospitals and offices, keeping patients, doctors and staff safe when in-person visits are necessary.

Implications for Equipment Finance

Financing can play a critical role in allowing organizations to preserve capital, pay for equipment over time and save them from paying for costly maintenance on aging equipment.

The pandemic also caused providers to assess their physical footprint, as the ability to achieve flexibility within the hospital environment to adapt to community needs has gained more attention. This is accelerating the already growing interest in innovative solutions like servitization, where payments are made based upon usage of capital-intensive medical equipment as services and treatments are performed, rather than purchasing the equipment itself – enabling the benefits of equipment usage without any responsibilities of ownership.

Flexible financial solutions will remain critical in supporting evolving asset needs and driving the shift toward digitalization, especially as budgets are under increased pressure. As we begin 2021, providers are encouraged to closely assess their asset needs, understand the efficiency of their equipment and explore how adjusting operating and financial models can increase flexibility and improve the standard of care.