The Ride of a Lifetime: Medical Equipment Manufacturing, Service, Maintenance and Repair
Hang onto your technician tool belts fellas, things are about to get a whole lot livelier in the medical equipment world.
A Growing Industry
It’s no secret that the medical device industry is on the upswing. According to Medical Device + Diagnostic Industry magazine “Today, the United States is the acknowledged world leader in medical devices and diagnostic products. With more than half of the leading global medical device companies based in the United States, the industry currently employs more than 400,000 Americans directly and 2 million people indirectly.”
They go on to say that “The recession did little to deter hospitals and other customers from purchasing medical devices, and the anticipated economic recovery will only help the industry grow further. Medical device manufacturers will continue to benefit from the aging U.S. population, while the influx of newly insured people due to the healthcare reform bill will drive up demand for devices.” But that’s not all. Researchers at IBISWorld say that “The upward trend is expected to continue. The Medical Device Manufacturing industry is set to generate $7.9 billion in 2012, up 15.7% from 2011. Industry revenue has been growing at an annualized rate of 16.9% over the five years through 2012...”
Despite some challenges in the ease and swiftness of U.S. regulatory approval, the impending medical device tax scheduled to kick-in on January 2013, and lack of permanent R&D Tax Credit, optimism prevails due to a number of factors supporting this trend. IBISWorld reports that “… the increasing purchasing power of hospitals, improvements in living standards and therefore demand for medical diagnoses, technology upgrades in hospitals, requirements for higher quality products and the development of China's western regions” are all contributing factors.
International interest is also playing a role in growth. The emerging markets of Brazil, Russia, India and China (also known as “BRIC”) are helping the U.S. based industry command attention on a more global scale. In a 2012 Medical Device Industry Survey conducted by Emergo Group, the United States and the four BRIC countries were seen to have the greatest potential growth over the next five years. (chart is from the Emergo Group Industry Survey).
Great News for Medical Equipment Technicians and their Businesses
Both new and used medical equipment continues to experience strong demand. For the Biomedical Equipment Technician (BMET) and the companies and/or departments they work for, this all adds up to a very bright and busy future. The Occupational Outlook Handbook reports that “Employment of medical equipment repairers is expected to grow 31 percent from 2010 to 2020, much faster than the average for all occupations. Employment growth will stem from both greater demand for healthcare services and the increasing types and complexity of the equipment these workers maintain and repair.” What isn’t mentioned is who these technicians will work for.
The Medical Equipment Services Caveat
With all this upward trending, globalization and growth you might think there is no downside; that nothing can stop this medical equipment joy ride. But the fact is that if the medical services companies, who help to install, repair, and maintain this equipment don’t plan ahead, they could be caught unprepared.
The medical equipment market is fragmented with everyone vying for a piece of this lucrative thrill ride. Medical equipment manufacturers themselves offer service contracts, while third-party service providers compete for the same contract or supplemental and/or aftermarket OEM warranty work. Companies have emerged to sell medical equipment parts, which compete directly against the OEMs for parts sales. Software companies are popping up to arm medical equipment service companies with the tools needed to compete, but they also support the in-house hospital equivalents looking to do the maintenance and repair work themselves.
While OEMs will garner the profits for their research, development and manufacturing expertise of the equipment itself, the aftermarket parts and service game has yet to yield a winner. It will be interesting to watch this race play out as the market consolidates – as all fragmented markets do – and we learn who has positioned themselves best. Who will rule the aftermarket track? Will it be service contract providers, parts companies expanding into the service function or in-house hospital technicians that will pull ahead?
Whoever it is, one thing is certain. They’re going to need a fully integrated parts catalog (diagnostics, parts and service information) to keep pace with all the new and used medical equipment that the medical equipment technicians will be working on.