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, 4^th Edition covers these trends, lists company revenues and provides estimates of specific device markets.  The report is available from Kalorama Information at

http://www.kaloramainformation.com/Global-Medical-Devices-7546398/

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.   

HHS Strikes EMR Vendor For Non-Compliance

One of the points consistently made in our reports on EMR (we've just published EMR 2013) is that the government incentives for EMR are no 'Cash for Clunkers' type program.   CMS does not pay doctors merely to buy programs, they have to show usage.  And the EMR Vendors that certify their programs can meet the usage requirements are subject to regulation.  

Yesterday HHS backed up its certification with action against a vendor EHR Magic Two electronic health records, previously certified as products to be used as part of the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs, have had their certifications revoked. Farzad Mostashari, M.D., the national coordinator for health information technology, announced today that the products do not meet standards and providers cannot use these products to meet the requirements of the Medicare and Medicaid EHR Incentive programs.

EHRMagic-Ambulatory and EHRMagic-Inpatient, both developed by EHRMagic Inc. of Santa Fe Springs, Calif., no longer meet the EHR certification requirements. The EHRs must be certified by a certification body (ACB) authorized by the Office of the National Coordinator for Health IT (ONC) before regaining certification.

“We and our certification bodies take complaints and our follow-up seriously. By revoking the certification of these EHR products, we are making sure that certified electronic health record products meet the requirements to protect patients and providers,” said Dr. Mostashari. “Because EHRMagic was unable to show that their EHR products met ONC’s certification requirements, their EHRs will no longer be certified under the ONC HIT Certification Program.”

Obviously these vendors will suffer a bit (EHR Magic is not one of the top vendors in Kalorama Information's market research report) but users who purchased the system also suffer, as they now have a non-compliant product and cannot obtain incentive payments based on usage of an EHR Magic product, unless the vendor can be re-certified.  This will mean more expenditure for those physicians who use this system. 

Athenahealth Plans Potential Big Move in the EMR Market

       Our newly published EMR market research survey details the top vendors selling electronic medical records to hospitals and physicians.  Cerner, McKesson, GE Healthcare not surprisingly lead the list, but we've got our eye on small athenahealth as we've received word that they are working on a cloud-based system that will compete with the giants in the hospital market.  
        Watertown, Massachusetts-based athenahealth offers physician billing and practice management services.  To help communication in the practice, the company has a web-based service to manage various patient communications. athenahealth also offers 2008 CCHIT EHR services to its customers.   
        The company has a dedicated team of specialists who address the many practice needs that impact both practice revenue and patient care.
athenahealth earned top national ranking in 2012 KLAS Report for Practice Management 1-10 physicians and 11-75 physicians with its Collector software..  In the Black Book Ratings, the company was ranked #1 in the internal medicine physician software group.  

          In March 2013, the company acquired Epocrates, a developer of mobile point of care applications. By leveraging Epocrates' mobile expertise with knowledge and data from athenahealth's cloud-based network, the combined company is uniquely positioned to introduce new mobile workflows and applications to fuel the delivery of high-value information to the clinical community when, where, and how they want it. Additionally, this acquisition accelerates athenahealth’s access to the clinician market, growing its current provider base of 40,000 to include the more than one million clinicians on the Epocrates network.
     

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