PICTURE OF HEALTH by ProQuest

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"That's wonderful!" the manufacturer exclaimed. "What's the bad news?"

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									   EDITOR'S FORUM




PICTURE OF HEALTH
THE DOCTOR IS IN: AN EXAMINATION OF
THE MEDICAL SIDE OF OBAMANOMICS
REVEALS WHY UNIVERSAL
HEALTHCARE IS NOT GOOD
FOR MANUFACTURING.

By Mike Riley


A     manufacturer asked his distributor if there had been
      any interest in his newest products that were on display.
“I have good news and bad news,” the distributor replied.
“The good news is that one gentleman inquired about your
products and wondered if they would appreciate in value after
your death. When I told him they would, he bought all of them.”
   “That's wonderful!” the manufacturer exclaimed. “What's
the bad news?”                                                                                                                     BY 2017,
   “The man was your doctor.”                                                                                                 ONE DOLLAR
   In many ways, this tale is a shadow of the good news-bad                                                             OUT OF EVERY FIVE
news scenario facing the medical device manufacturing mar-                                                       SPENT IN THE U.S. WILL GO
ket. Think this through with me for a moment.                                      TOWARD HEALTHCARE COSTS. FOR THIS STAGGERING COST,
   We have good news. Almost 180,000 U.S. companies develop,                     OUR HEALTHCARE SYSTEM RANKS LAST OR NEXT-TO-LAST ON
                                                                                  QUALITY, ACCESS, EFFICIENCY, EQUITY, AND HEALTHY LIVES.
test, market, package and distribute medical instruments and
equipment in the $266 billion global medical device manufactur-
ing market. The U.S. healthcare market is the world’s largest.           ployment and economic challenges. New product introductions
   U.S. medical device manufacturing exceeds $90 billion and             are expected to shift the competitive advantages between indi-
has been growing approximately 6 percent annually up to this             vidual device makers, but the overall industry should generate
year. Furthermore, 16 of the top 25 medical device companies             sufficient cash to fund their operations and strategic initiatives
are U.S.-based and account for 72 percent of the revenue.                while preserving their credit profiles.”
   Most importantly, 80 percent of medical device company profits           Even those with mixed results see the glass as half-full. The
come from products introduced in the last five years. This is one rea-   Semiannual Economic Forecast released by the Institute for
son the U.S. medical technology industry continues to grow despite       Supply Management (Tempe, AZ) is optimistic about the sec-
a challenging market related to the global credit situation.             ond half of 2009, as 45 percent of those surveyed expect the
   According to Richard Ramko, the U.S. medical technology               second half to be better than the first half. Only 16 percent
leader for Big Four auditor Ernst & Young (New York, NY), “The           predict it to be worse and 39 percent see no change at all.
industry is poised for growth due to aging populations, the                 Medical markets historically show more resilience than oth-
wider prevalence of chronic diseases, and an expected surge in           ers in the face of economic downturns, with only elective sec-
demand for companion diagnostics to accompany new genera-                tors such as aesthetics and dental devices being vulnerable.
tions of targeted therapies.”                                               “That's wonderful!” you are now exclaiming. “What’s the bad
   For example, cardiovascular devices are being fueled by an            news?”
aging population and quickly developing drug-device combina-                By 2017, one dollar out of every five spent in the U.S. will go
tions. This same theme flows through many medical sectors. As            toward healthcare costs, according to Health Affairs. For this stag-
baby boomers age and hearts fail, bones get broken and teeth go          gering cost, a recent study from the Commonwealth Foundation
bad, the growing need for new medical devices translates into            (Harrisburg, PA) found that “the U.S. healthcare system ranks last
more demand to manufacture imaging, infusion therapy, ortho-             or next-to-last on quality, access, efficiency, equity, and healthy
pedic, in vitro, dental, cardiovascular and surgical devices.            lives for a high performance health system.”
   This explains why Dan Meckstroth, the chief economist for                This wildly expanding cost is unsustainable for a system that
the Manufacturers Alliance/MAPI (Arlington, VA), says, “Only             has become a national embarrassment. Nowhere is change more
a co
								
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