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While no one can reasonably predict the long term costs or benefits to massive healthcare reform, there are a few places which could begin feeling the pinch. Medical device manufacturers are one of the largest segments where these new healthcare reforms could bite.
Here are five points illustrating this fact:
Downward Pricing Pressure – The overall biggest effect of healthcare reform on medical device manufacturers will be the downward pricing pressure.
Increased Regulation – The increase in reform-related regulations on small to mid-sized companies will potentially rub some of them out of business. Even for bigger fish, things like the Patient Protection and Affordable Care Act of 2010 will begin to have a weighty effect.
Delayed Revenues – Revenues for medical device manufacturers will increase in due time. However, because of all the rejiggering of the medical industry, that revenue will take time to find its way into the device manufacturers.
Consolidation – Because the smaller fish are going to be gobbled up by bigger players and because this is an ongoing, escalating phenomenon, the consolidation in healthcare will potentially be detrimental to some companies.
Off-Shore Outsourcing – Another negative effect of the healthcare reform laws will be the increased global outsourcing of manufacturing and services. Much like the bigger fish gobbling up smaller ones, many foreign device manufacturers will demonstrate that they can make devices quicker and cheaper, plus, customer support services will migrate also.
Of course the healthcare struggle marches on. Many expect or resist the concept of expanding the current nationalized healthcare system in the United States or not. Whatever side of the coin you fall on, one thing remains clear: the current and on-going reform will change the face of healthcare in America.