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Compliance In Focus
Posted by John Lehmann on Mon, May 7, 2012

Is Health and Wellness Focus Hurting Medical Device Firms?

Wellness CostThis recent article from MedCity News caught my eye.  The article states that the medical device industry is rallying around the repeal of the 2.3% medical device tax as a job and innovation killer.  However, they indicate that a potentially bigger threat to the medical device industry is the strong health and wellness push that is focused on keeping patients out of the hospital.

In the article, David Lewis, a Morgan Stanley analyst, “believes that managed care companies are strengthening their disease management programs, which, in turn will have an impact on medical device sales.”  Lewis makes reference to CareMore, a Medicare healthcare company based in California which has a strong focus on wellness for the senior community.

”CareMore has reduced hospital admissions in ESRD (end-stage renal disease) by 50 percent by instituting preventative strategies and in congestive heart failure by 56 percent over three months by equipping each patient with a wireless scale and scheduling a same-day visit with a clinician if overnight weight gain exceeds a certain threshold,” Lewis wrote in the report.

While a stress on health and wellness if beneficial to keeping patients healthy, this could affect the sale and use of devices associated with acute care.  Lewis provides the following recommendations to help medical device companies adjust.  They are as follows:

  • Develop relationships with primary care physicians as managed care companies are looking at primary care to reduce their medical costs.
  • Shift R&D investment from developed to emerging markets.
  • Consider developing device therapies that may be administered in the home and in lower cost outpatient centers.
  • Develop alternative sales and distribution models that may include large employers focused on wellness and chronic disease management channels.

Lewis also suggest that medical device must adapt and understand that a cost-effective device can help drive market share.

How can the industry adapt to the health and wellness push by the managed care industry?  In our opinion, it could be detrimental to openly fight against a push that incorporates preventative care strategies.  Share your thoughts.

Photo Credit: 401k

Topics: Health Wellness, Medical Device Firms, MedCity News

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