Will healthcare reform help or hurt medical device and medical manufacturers? That is the question on many device managers’ and shareholders’ minds. At first blush, many stakeholders assume that healthcare reform will drive down margins and include new regulations that will hurt device manufacturers. However, a contrary argument says that healthcare reform (at the outset) will dramatically increase patient numbers in hospitals and physician offices around the country.
McGuireWoods hosted a Medical Device Symposium in November and two industry leaders shared the following thoughts:
- David Koo, Senior Partner, Roundtable Healthcare Partners, a seasoned investor in the disposable device market, sees significant opportunities over the next three to five years for device manufacturers that provide low cost devices and lower the cost of care and address current hospital and physician concerns (ie, hospital-acquired infections). According to Mr. Koo, much of this growth will come from the expansion of coverage that will be driven by health reform efforts in Washington, D.C.
- Medical device companies must remain vigilant in the coming three to five years according to Rob Clark, Senior Director – State Government Affairs, Medtronic. The health reform activity in D.C. does not currently contain many significant cost-containment efforts. Mr. Clark’s outlook is that these efforts will likely be introduced at federal and state levels as well as by commercial payors in the coming years as costs increase due to broader coverage. Medtronic has played an active part in helping to shape the outcome of some states’ cost containment efforts already.
This debate will continue into the coming months and years as the details are filled-in on healthcare reform efforts.