When Obamacare was launched, there was much discussion about its impact on medical device manufacturers. In my last post, I discussed how the predicted negative effects on innovation haven?t (necessarily) come true. In this post, I?ll examine another much debated aspect of Obamacare?the decrease in uninsured patients leading to more procedures and thus demand for medical devices. For medtech manufacturers, this was often mentioned as a factor that would offset the negative impact of the medical device excise tax for them. Many manufacturers, however, were skeptical that they?d see much of an impact, particularly stating that devices used in emergency care wouldn?t see increases; it would be more the devices used in elective or diagnostic procedures that would be impacted.
As it turns out, they were right. Well, sort of. The number of uninsured patients has, in fact, gone down, and a report from the Commonwealth Fund says that the number of patients avoiding needed care because of cost declined in 2014, for the first time since 2003. So, good news for medtech, right? At the very least, this should lead to more demand for diagnostic and screening procedures, with more patients willing to see a doctor and follow up with suggested tests compared to previously.
But, greater health care coverage does not necessarily equal greater access to care. While demand for care has, in fact, increased, the number of doctors and emergency rooms has not seen an increase in recent years. In fact, in a recent survey of US physicians, 81% reported being overextended or at full capacity, an increase from 2012, and 44% said that they planned to make changes that would reduce access to care, such as retiring, working part time, or closing their practice to new patients. At the same time, the number of ER visits is growing, with some ERs reporting a 5 to 10% increase in visits through 2014. This is partially because a shortage of primary care physicians is sending people who don?t need immediate medical attention to the ER.
So for medtech to really benefit from the influx of insured patients, access to care in the US also needs to improve. Maybe the efforts companies are making to improve efficiencies in hospitals, such as through Medtronic's hospital solutions business, will support greater patient throughput in facilities, gradually improving patient access. Telehealth, another hot topic, might be another way to improve access to primary care and allow physicians to more quickly check in with more patients.
Maybe medtech won?t get direct benefits from the greater volume of insured patients in the US, but the benefits aren?t completely out of their reach.