Note: This article is based on a presentation in AMI’s June 24 webinar that was made by Christophe Leroy, who leads healthcare market intelligence projects for Global Health Intelligence, the sister company of AMI.
In trying to understand the recovery of the medical equipment market, we first must begin with the devastating impact of the COVID-19 pandemic across the region. Beyond the tragic cost in lives, the pandemic has stretched healthcare resources as many infected patients have had to be hospitalized.
While the official death counts have been reported in many outlets, several sources indicate that these counts vastly underrepresent the true loss of life. One of these sources is The Economist, which has compared actual deaths to historic averages for the same time period in prior years in order to estimate the excess number of deaths attributed to the virus. These estimates show just how stretched Latin American healthcare systems have been, as a result of the surge in COVID-19 patients in hospital ICUs.
The 2024 Latin America Forecast
AMI’s leadership team offers a 2024 economic, business and political outlook for Latin America, as well as a sector-by-sector analysis of 5 major trends in the region.
Gauging the Ongoing Impact
To understand the full impact of pandemic, at Global Health Intelligence we have focused on tracking developments at Latin American hospitals through our monitoring service. Our team regularly collects data on key hospitals in different Latin American markets, particularly regarding equipment counts and surgical procedure volumes, in order to provide weekly data portraits of how Latin American hospitals are recovering. Subscribers to this service can access a dynamic business intelligence platform every week to see the latest developments in the hospitals in the countries they wish to track. Our systematic tracking at these facilities shows several effects from the pandemic crisis, such as:
Drastic Reductions in Surgeries
Procedure volumes have dropped dramatically in Latin American hospitals — on average by 40% to 50%. In addition, in some specialty areas, the volume of surgical procedures has dropped by as much as 70% and is nowhere near pre-pandemic volumes.
Supply Chain Disruptions
Lockdowns across the continent, which included some of the strictest in the world, such as in Argentina or Chile, disrupted the supply of medical equipment. Hospitals experienced the most severe shortages in critical equipment used to treat COVID patients, such as personal protective gear, oxygen tanks, ventilators and even body bags. The resulting disruptions have been most acute in rural clinics and in regional hospitals located outside of major urban centers.
Fewer Purchases of Equipment
Due to the crisis, Latin American hospitals have been forced to divert a significant amount of their discretionary budgets to deal with the influx of COVID patients, rearranging ICUs and redirecting staff. Many non-critical, elective medical procedures were postponed, rescheduled or canceled, which had a domino effect on hospital purchases of medical equipment. These purchases dropped substantially, along with capital expenditures and investment in high-ticket machines, many of which were canceled or postponed.
What We Can Expect in the Rest of 2021 and Beyond
Two key indicators to monitor include the approach to vaccination campaigns, both in terms of supply coverage and the percentage of the population vaccinated.
While countries have made some strides in this area, the reality remains that the faster they can vaccinate their population, the faster their health systems will recover from the tremendous burden placed by the vaccination. This in turn will affect the recovery of the medical equipment industry.
Chile is far and away the most successful in vaccinating its population with at least a partial dose, but the other countries are significantly lagging behind. There is, however, some room for optimism in the vaccine supply acquisitions, with a number of countries successfully stocking enough to cover their populations:
Given these circumstances, we expect to see a gradual rise of medical devices and equipment purchases by hospitals towards the end of the year and in early 2022. The operative word here is gradual. For products, supplies and equipment used in treating COVID patients, we expect demand to remain high for the next few months, and then to begin to taper off. The gradual decrease will happen in lockstep with the extent to which vaccination drives proceed at a good pace.
In the other category, we expect a return to health for sales in medical devices and equipment used in non-emergency elective surgeries in various categories, as they slowly come back online. The one caveat of note is that although we expect the return of procedures to be gradual, purchases of related equipment may came in a surge, either in Q4 2021 or in early 2022. We may actually see a bump in hospital purchases as they not only respond to an expected gradual rise in procedures, but also restock depleted inventories that they have had to rely on for the past 15 months during the economic lockdowns.
We mentioned the Hospital Monitoring Service as a resource to help companies track the industry’s recovery by obtaining weekly data for the region’s hospitals on a market-by-market basis.
However, you also can contact us to explore customized research that can offer you a granular understanding of recovery rates for specific types of medical equipment in different countries, as well as the overall market.