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U.S. Hospitals and Equipment Aren’t Aging Gracefully
Just as America’s population is aging, so is its capital stock––everything from factories to medical equipment, according to figures from the U.S. Bureau of Economic Analysis (BEA). The average age of all fixed assets was 22.8 years in 2015, the oldest in records going back to 1925. That’s bad news for the health care sector. It means, for instance, that doctors are working at hospitals that may be crumbling with wear.
One particularly troubling finding, reported in Bloomberg Business News, is that medical equipment and instruments, such as X-ray machines, are also creeping up in age. At 4.7 years during each of the past two years, they were the oldest since 1945. Health care facilities, including hospitals, are also getting up there: On average, they’ve been around for 20.7 years, the longest since 1949, according to the BEA data.
The private sector isn’t much better off, with fixed assets clocking in at 22.4 years, the oldest since 1955. Industrial equipment—including the machines, turbines, and electrical apparatus workers use to produce all kinds of commodities––was 10 years old, close to the record set in 1939.
According to the BEA, the average age of fixed assets in the United States has been rising because companies and governments––state, local, and federal––have been reluctant or unable to spend money to replace the old with the new.
Sources: Bloomberg Business News; October 6, 2016; and BEA; September 2016