No hospital administrator, finance person or radiologist needs to be told that every facility must make every dollar count in today’s healthcare environment. To afford the newest technology available, fiscally prudent providers look beyond the sticker price on medical equipment and analytically mull as many financing and leasing options as possible to determine which route makes the most financial sense.

LFC Capital Inc. (Chicago) provides a range of equipment financing programs — such as finance and operating leases, pay-per-use rental programs and vendor financing programs — to healthcare providers of all sizes looking to acquire medical imaging equipment, information technology systems and software, and other healthcare technology.

LFC Chairman and CEO Martin E. Zimmerman started one of the first companies to specialize in healthcare equipment leasing in 1967. In 1975, he founded LINC, which became one of the largest leasing companies in the healthcare field. He organized LFC Capital in 1994 and acquired LINC’s $250 million healthcare leasing portfolio when that company went public in 1997.

Zimmerman served for five years as a trustee of Ravenswood Hospital Medical Center (Chicago), where he chaired the finance committee. He also has served as a director of the Equipment Leasing Association (Arlington, Va.).

Medical Imaging spoke with Zimmerman on the state of medical equipment financing today.

Let’s start with the big picture. What has been the effect of the lackluster U.S. economy on lending and borrowing in the healthcare industry?

Interestingly, today we are at a time when interest rates are at their lowest levels in 30 to 40 years. At the same time, the spreads between the ‘haves’ and the ‘have nots’ have never been wider, because everyone is marching toward quality. Lenders are desperately afraid of taking more losses. They are concerned and apprehensive about taking risks, so a lot of very good facilities that are not adequately scaled — small hospitals and clinics, for example — end up having higher interest rates than they may otherwise have, relative to what the best creditors pay.

Why is the size — or scale — of the smaller facility a disadvantage?

Every lender has his or her idea as to what he or she wants to do and whom he or she wants to lend to — and how much risk he or she is willing to take, which today isn’t much.

Please refer to the April 2003 issue for the complete story. For information on article reprints, contact Martin St. Denis