Those MDs intending to make equipment upgrades and acquisitions said they would rely heavily on financing.  A third plan to acquire equipment in 2015 through financing, while 30% plan to use cash, 25% will use a lease, and 12% will use grants.The survey by EverBank Commercial Finance was conducted at last year’s Radiological Society of North America (RSNA) annual meeting in Chicago.

Upgrading equipment or technology

Findings showed the top priorities for capital spending for the majority of MDs in the New Year will be upgrading existing equipment or technology (60%) and expanding into a new building or facility (21%).  

While practice improvements and expansion are on the agenda for many MDs there are concerns about reduced reimbursements. The majority (62%) identified reduced reimbursements as the greatest challenge their business will face in 2015. Economic conditions presented noticeably less of a concern (21%), as did competition (11%).  

Justin Tabone, general manager for EverBank Commercial Finance’s Healthcare business (pictured) said: “Despite concerns about reimbursements, we’re witnessing an appetite for upgrading among physicians.

Tabone Justin

“While the Affordable Care Act has introduced an element of uncertainty for some MDs, financing presents a strategic capital expenditure option for equipment acquisition challenges.”  

Survey findings did show some trepidation among physicians when it came to the Affordable Care Act (ACA). Approximately one in three (31%) MDs said the ACA had a negative impact on their business, while 35% reported that they were still unsure about the effect the ACA has had on their practice.  

Deal volume within the medical space is likely to continue. The survey found practitioners expect a strong deal market in 2015, with two-thirds (67%) of respondents whose practices are privately owned saying they anticipate entertaining an acquisition opportunity with a hospital in the next 12 to 18 months.

“The medical office space, particularly in the middle market, continues to see steady consolidation as practitioners look to increase the efficiency of their operations,” said Doug Misner, Sales Leader for EverBank Commercial Real Estate. “Within our own business, we have seen an uptick in acquisition financing inquiries as well as facility and equipment upgrade interest. As we look to 2015, we expect to see those financing needs continue and are looking at the best financial structures to help our clients with their growth plans.”  

Below are other key survey findings, anticipating developments for the radiology sector in 2015.  

Regulatory

Some 34% of respondents characterized the ACA as having either a positive impact or no impact on their businesses.  

Ownership

68% of respondents indicated that they own medical office real estate. Of that group, 96% plan on holding onto their property in 2015.  

Of the 32% of respondents who lease their medical space, 56% will not make any changes in 2015 to their current contract. Some 33% will be reviewing or renewing their contract, and 11% are looking to buy property.

Tabone added: “With interest rates expected to finally increase in late 2015, we are seeing some practitioners look to take advantage of low rates today and move into ownership opportunities.

“Given our expertise across the medical office spectrum, we’re focused on supporting our clients as they grow their businesses at any stage in the lifecycle – whether it’s through their equipment upgrades, financing a new acquisition or purchasing new medical office space.”