An evaluation of advantages and cost measurement methodology for leasing in the health care industry.

Lease financing in hospitals is growing rapidly. Many articles published on the topic of lease financing point only to the benefits that may be derived. Very few articles actually analyze the pros and cons of leasing from a financial cost measurement point of view, which includes real world parameters. This article critically evaluates two articles published in this issue which lead the reader to believe leasing for the most part is a bargain when compared to debt financing. The authors discuss some misconceptions in these articles and point out some facts viewed from a financial analyst's position.