Friday, May 3, 2013

Growth in MedDevice Revenues, But Small Growth

Just 3%.  Not the kind of growth that inspires new entrants into a field and venture capital ivestment.  But that was the conlcusion of  our recent report on the medical device industry.   The global medical device market reached 331 billion dollars in 2012    Those companies that did growth launched new products or acquired companies with novel products.
In the U.S. Medicare, Medicaid, as well as state governments implemented anemic spending increases to hospitals, the key buyer of medical device products.   The cuts took the form of non payment for patients for infections acquired at the hospital, or code recovery fees.   In Europe, the extreme economic downturn in Spain, Ireland, Greece and Portugal  led to layoffs and proposed reforms to the health care systems.. Even emerging markets have grown spending less quickly than had been expected.  Hospitals continued to purchase through group organizations and insist on transparent prices. 
The beginning of 2013 saw the medical device industry make the first payments to the IRS for a new 2.3% excise tax on all classes of medical devices, as part of the 2009 Patient Protection and Affordable Care Act (referred to in this report as US healthcare reform.) Many companies attributed layoffs to the tax in widely-publicized announcements, or said that they would not build additional U.S. facilities.  Kalorama didn’t think the device tax factored into slow growth in 2012, but the report does predict long-term effects on venture capital investment and research spending in the industry.
In a slower-growing device market, there was little room for new entrants and giants dominated.  Johnson & Johnson is the world’s largest medical device company, followed by imaging giants GE Healthcare and Siemens and cardiology and spinal device expert Medtronic.  Other leading companies were Stryker, Covidien and Philips. 
Emerging markets were a key strategy for leaders and the report notes a new trend last year: the acquisition of Chinese local companies by device giants. Johnson & Johnson acquired local Chinese company Guangzhou Bioseal Biotechnology Co. Ltd, while Medtronic announced it would acquire China Kanghui Holdings, a developer and producer of trauma and spine orthopedic transplants.
The full report, The Global Market for Medical Devices, 4th Edition covers these trends, lists company revenues and provides estimates of specific device markets.  The report is available from Kalorama Information at

Monday, April 29, 2013

Another Argument for Urgent Care: Too Many Employer Insured ER Visits

It's not just uninsured that drive up the cost of the ER.  According to this article in Fierce Healthcare most (70%) of visits to ERs by people with employer insurance are unecessary and could have taken place in another venue. 

According to the study cited from a report from Truven Health Analytics.:

"Inappropriate use of emergency department services has become a major source of healthcare system waste," John Azzolini, director of practice leadership at Truven Health Analytics, said in the announcement.  "Conventional wisdom has previously suggested that this issue was confined to the Medicaid, Medicare and uninsured populations, but our new research shows that the privately insured population's use of the ER is avoidable approximately three quarters of the time.

This is one more feather in the cap for urgent care centers, small all services healthcare units which grew at very high rates between 2011 and 2012, according to our recent report.  There are 9,300 in the United States, and this figure is growing.  Urgent care centers can provide more services than a physicians office in most cases, but are not set up for extreme emergencies.  They will be a component of serving the new customers with healthcare insurance, according to Kalorama's recent report.