Growth Driven by Demographic Change
Healthier lifestyles and medical progress are continually extending life expectancy in the industrialized countries. In Germany alone, health care expenditure rose from 195 to 248 billion euros between 1996 and 2006. The growth rate has been above the average of the national economy and is likely to remain so over the years to come. Among the beneficiaries of that expansion are medical equipment manufacturers, whose products range from pacemakers through ultrasound devices and magnetic resonance scanners to diagnostic testing.
Globally, the industry sells around 200 billion euros’ worth of equipment per year. Nearly 45 percent of that revenue comes from the United States, about 30 from Europe, and just under 20 from Japan. According to German trade associations, the more than 1,200 domestic manufacturers have increased their earnings by nine percent a year recently owing, above all, to exports. Foreign trade accounts for over 60 percent of revenues after soaring almost 17 percent in 2005. Market analysts predict mean annual growth rates of seven percent until at least 2015 for medical equipment made in Germany.
There are three major tendencies determining this essentially favourable business environment:
- First, people’s desire to lead healthier, more comfortable lives and look better, which manifests, for example, in the surge in demand for dental implants, contact lenses and hearing aids. As vanity grows, so does consumers’ willingness to pay out of their own pockets for benefits not covered by their health insurances, if they can expect a more functional or aesthetic solution in return.
- Secondly, new diagnostics and high-tech devices enable considerable economization both in hospitals and in doctors’ practices.
- Thirdly, the never-ending political efforts to reform Germany’s health care system will continue to affect the domestic medical equipment market. Given health insurers’ chronic cash problems, more and more benefits will be excluded from coverage, while regulation and pricing pressures are likely to mount.
Against this background, we see four complementary approaches to serving the interests of patients, hospitals and doctors to the advantage of all:
- end-to-end electronic workflow support
- integrated care (inpatient, outpatient, home)
- technical innovation in medical diagnostics and therapy
- adaptive adoption of best practices and solutions from other industries
Product development along those lines will blur the distinction between medical equipment specialists and other high-tech suppliers. Interdisciplinary engineering will result in innovative combinations of new diagnostic techniques, optimized, semi-automated workflows, and integrated IT tools.
Consileon helps medical equipment manufacturers refine their business and cooperation models, and gain strategic advantages through B2B networking.
We support our clients’ ventures into new industries, markets and alliances. On all our projects, we are ready to be judged by our performance.
Ralph Hientzsch
top