Global Refurbished Medical Equipment Market Driven by Increasing Demand in Developing Countries
Posted on 15 Dec 2022
Purchasing a new piece of medical equipment comes with many upfront costs. And in a constantly changing industry, medical equipment can rapidly become outdated. Refurbishment is the systematic process of making used equipment equal to or better than new. Refurbishment is rebuilding or updating used equipment with new materials, components or parts to restore their original (or better) working condition and appearance. Refurbishment typically costs about half as much as buying a new one and can bring a machine back to a new-like condition. Refurbished equipment can help to avoid high upfront costs and being forced to use something that will quickly become obsolete. Refurbished medical equipment provides flexibility and also saves money by extending their lifespan to realize maximum return on investment. As a result, the global refurbished medical equipment market is projected to grow at a CAGR of 11.76% from USD 15.23 billion in 2021 to USD 29.68 billion by 2027, driven by increasing demand for medical equipment in the developing countries, high capital and procurement costs of new medical equipment, and growing preference for eco-friendly products. These are the latest findings of Arizton Advisory & Intelligence (Chicago, IL, USA), a market research firm.
Nearly one-third of the medical equipment industry in the developing countries is part of the refurbished medical equipment market. The dearth of access to medical equipment in the developing countries has attracted global interest in the refurbished medical equipment market for disease diagnosis. Healthcare systems in the low-and middle-income countries often have limited access to medical equipment for routine use. Implementing medical equipment refurbishment in a developing country provides employment, increases the knowledge of medical technology among the people, and thus, provides a sustainable supply of skilled personnel for the healthcare industry.
Medical equipment typically consists of complex machines that are expensive to purchase and operate and require significant maintenance. Small & medium-sized hospitals often cannot afford to buy new high-end equipment. Smaller clinics and local medical centers may not be inclined to spend their resources on purchasing limited new equipment that can easily deplete their entire annual budget. These facilities prefer refurbished equipment of reputed brands that will cost less but perform well for a few years without complaints. Purchasing refurbished medical equipment allows healthcare providers to maximize their budget while providing quality treatment options to each patient. By investing in refurbished equipment, hospitals and clinics can free up much-needed funds for other uses, such as staff, disposables, and medicines, further contributing to the growth of the refurbished medical equipment market. Additionally, refurbished medical equipment eliminates the annoying problems faced in using a worn-down machine and avoids the learning curve associated with new equipment.
Medical equipment inventory is an accepted cost of doing business for manufacturers and is often the most significant cost category. Since medical equipment is typically a high-value product, any efficiencies or cost reductions can quickly contribute to the bottom line. Older equipment does not last forever, and this equipment eventually will need to be replaced and refurbished. Many facilities are now eager to replace their older systems with the resolution of global supply chain problems. This will contribute to the rising sales of refurbished medical devices, aided by a large inventory of used medical equipment.
Refurbished medical equipment also offers environmental benefits. By extending the useful life of medical equipment from 5-7 to 10-14 years or even more, refurbishment is a form of reuse and waste prevention, contributing to an environmental economy. Refurbishment saves energy, and the materials are used to produce new equipment. Refurbishing medical equipment and extending its service life maximizes the return on the initial investment of energy and materials. Approximately 90% of the material for a system undergoing refurbishment can be reused; only 10% of the material must be recycled, which is done using environmentally friendly processes. In addition to important environmental benefits, refurbishing provides sustainable economic benefits by creating business and employment in the refurbished medical equipment market. Even existing equipment owners may consider refurbishing their machines rather than disposing off old ones and buying new ones if their users are comfortable using the specific model. A refurbished asset can be re-capitalized on a depreciation schedule at half the value of new equipment.
Based on product type, the medical imaging segment dominated the refurbished medical equipment market in 2021 with the highest share of 25.58%. The use of medical diagnostic imaging equipment can resolve between 70-80% of diagnostic problems, but nearly 2/3 of the world’s population has no access to diagnostic radiology. Refurbished X-ray machines, ultrasound systems, MRI machines, CT scanners, and nuclear medicine systems (PET, SPECT, and PET/CT) allow healthcare facilities to provide patients with life-saving medical diagnostic imaging services. The medical imaging equipment segment is expected to record the highest incremental growth of USD 3.10 billion, while the IVD & laboratories equipment segment is expected to register the highest CAGR of 13.14% over the forecast period.
Based on application, the diagnosis & monitoring segment dominated the refurbished medical equipment market in 2021 with a share of 69.46%, followed by the treatment & surgical interventions segment. Medical equipment is extensively utilized for patients’ diagnosis and treatment. Diagnostic and monitoring applications comprise Cardiology, Urology, Neurology, Orthopedics, Physiology, Emergency Medicine, Oncology, Obstetrics/Gynecology (OB/GYN), and others. The diagnosis & monitoring segment is expected to register the highest incremental growth of USD 9.73 billion, while the treatment & surgical interventions segment is expected to register the highest CAGR of 12.40% over the forecast period.
Based on end-user, the hospital segment dominated the refurbished medical equipment market in 2021 with the largest share of 37.97%. Hospitals utilize more medical equipment than any other healthcare setting. Diagnostics are the primary screening method in hospitals, which are the first point of contact for any infection and disease. The rising number of people with various infectious diseases compels physicians in hospitals to use diagnostic imaging equipment, thereby increasing their demand. The hospital segment is expected to register the highest incremental growth of USD 5.24 billion, while the clinical & research laboratories segment is expected to record the highest CAGR of 12.18% over the forecast period.
Geographically, North America and Europe are the matured markets for refurbished medical equipment. In 2021, North America dominated the global refurbished medical equipment market with a share of 28.24% and revenues of USD 4.30 billion, due to its aging population, prevalence of chronic diseases, growing healthcare expenditure, need for advanced imaging techniques, presence of well-established players, and a significant shift towards digital medical equipment in the region. Further, the US accounted for a share of 91.21% of the North American refurbished medical equipment market, led by an increasing diseased population, growing access to insurance, and faster adoption of advanced healthcare instruments for treatments in the country. Following North America, the refurbished medical equipment market was dominated by Europe, APAC, Latin America, and the Middle East & Africa. The APAC market for refurbished medical equipment is expected to register the highest CAGR of 14.45% and the highest incremental growth of USD 4.84 billion over the forecast period, driven by constant public and private funding, advancements in diagnostic imaging models, and growing medical awareness.
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