Focusing on medical devices this week, our analysts took a stab at answering the question of what’s going to happen in this space- and in the health care space in general- if the election swings towards a candidate that promises universal health care.
For analyst Matt Dolan, universal healthcare has to be balanced with making sure there is a still a financial incentive for physicians and medical device companies:
Mr. Dolan: As we discuss a possible movement toward universal health care, I think we could see more spending dollars and broader coverage on a numbers basis, but that doesn’t necessarily mean by product, indication or physician, for that matter. Quality of care becomes an issue and innovation can be constrained if spending pressure limits the size of market opportunities. There is an important balance between covering more lives and being politically or socially correct, versus making sure that we can still drive innovation and keep physicians interested in being physicians financially. Similarly, medical device companies need to be able to obtain reimbursement levels that can drive profitable pricing structures for them to take on the risks of developing new technologies. Broader coverage might mean a bigger national medical bill but could drop coverage on a per patient or per procedure basis. I think these are questions that are yet to be answered.
For the complete Medical Devices issue, including interviews with 10 CEOs and a special Off the Record interview with stock picks, click here.
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