Medical equipment rental

The simple explanation

People need things occasionally that are expensive to own: a trailer twice a year, a party tent once, storage space for a season. Rental businesses own the thing and charge for the use. One asset can serve hundreds of customers over its life, and the arithmetic is beautifully simple: payback period, utilization rate, maintenance cost. It is one of the few models where a spreadsheet can nearly predict the business.

A simple hypothetical example

Illustrative — invented to show the shape of the Rentals & Assets pattern. No real company is named, and no figure in it is data. The real, sourced companies for this model are on the Examples tab.

A pressure washer that costs a few hundred dollars rents for a meaningful fraction of that per day in a neighborhood where nobody wants to store one. Rented even a handful of days per month, it pays for itself within a season, and everything after that is margin minus maintenance. Add a second unit, then a trailer, then a delivery fee, and the fleet compounds.

A closer look at medical equipment rental

Medical equipment rental is two different businesses wearing one name, and choosing the wrong one is the expensive mistake. The first rents to institutions, and its demand comes from a failure of logistics rather than a failure of budget: Agiliti's 10-K reports that hospitals typically use only about 42% of the medical equipment they already own at any given moment, while nurses lose roughly 20 minutes a shift hunting for a pump. You are not selling equipment a hospital cannot afford. You are selling equipment it owns but cannot find, delivered cleaned, tested and patient-ready inside a contracted window. Agiliti built $1.17 billion of 2023 revenue on that premise.

The gate is not the Food and Drug Administration; Agiliti's own filing notes that third-party device servicers are not required to register their sites with the agency, and that no regulations specifically govern their maintenance work. The gate is hospital procurement: vendor credentialing, insurance certificates, delivery-time commitments, and a quality system nobody legally requires. Agiliti voluntarily runs to the FDA's quality-system regulation (21 CFR 820) and the international medical-device quality standard ISO 13485 because customers expect it, not because anyone makes it.

The second business rents to patients and bills insurers, and there the economics are set by people who are not in the room. Owens & Minor's Patient Direct segment booked $2,680 million of 2024 net revenue at amounts estimated to be received from third-party payors, an estimate its auditors singled out as a critical audit matter, which is a polite way of saying nobody knows what a month of rent is worth until it clears. Expect rental to be the smaller half of that lane, too: at AdaptHealth, fixed monthly equipment reimbursement is about a third of net revenue and the consumable resupply around it is nearly two-thirds.

Then comes the cliff newcomers never model: under 42 CFR 414.229, Medicare pays a capped rental item for no more than 13 months of continuous use and the supplier must then transfer title to the patient. The annuity ends by giving the asset away. Getting into that lane at all means accreditation as a DMEPOS supplier (Medicare's standard for durable medical equipment, prosthetics, orthotics and supplies), re-survey at least every 12 months, and a $50,000 base surety bond for each National Provider Identifier you bill under, per 42 CFR 424.57. And getting the billing wrong is a False Claims Act matter, which is how Apria came to pay $40 million and accept a five-year Corporate Integrity Agreement over the rental of non-invasive ventilators, without admitting wrongdoing. Rent to institutions and you sell logistics. Rent to patients and you sell paperwork, at a price someone else sets.

How money moves through this model

Who pays: Consumers and contractors who need occasional access

What they pay for: Use without ownership: no purchase price, no storage, no maintenance

What creates profit: Rental revenue minus depreciation, maintenance, insurance, and the idle days

• Customer
• Offer
• Medical
• Costs
• Profit

What makes this model hard

The honest difficulty: assets break, customers are careless, and idle inventory earns nothing while depreciating anyway. Utilization is everything, and it is won with unsexy operations: scheduling, delivery logistics, maintenance discipline, and deposits that actually protect you.