Over the summer, the United Kingdom's voter-based decision to leave the European Union, widely referred to as "Brexit," was world news as experts from every sector debated how such a drastic break would affect global markets for years to come. Speculation indicates that the UK economy will stagger, and multiple departments of the government will need time to adjust to the changes in policy and procedure that will be laid out as Parliament proceeds with the exit strategy over the next few years.
The country's publicly funded National Health Service (NHS) will feel the hit with the loss of tens of thousands of qualified healthcare workers, slowed innovation, disrupted trial processes, and administrative struggles to collaborate with EU counterparts. Experts predict that medical technology innovation in the UK will be disrupted as companies struggle to adapt to the new outcomes-based model of care. However, the move will force the NHS to adapt to survive – creating an urgent need for a cohesive, IT-fluent healthcare ecosystem infrastructure that will likely benefit both physicians and patients in the long run.
What Might US Healthcare Look Like Under the New Administration?
With an eye on how Brexit has caused upheaval in the UK, the United States' medical community is understandably curious about how this year's presidential election will affect the state of the medical technology industry stateside. While this year's election process has seen hot debates on everything from foreign policy to email servers, one of the most traditionally divisive topics – healthcare – hasn't made it to the forefront of either leader's platform.
Where the Candidates Stand
With current polls showing a close race to the finish between Democratic candidate Hillary Clinton, and Republican candidate Donald Trump, here is a quick recap of the frontrunners' stance on healthcare:
Hillary R. Clinton, Democratic Party
- Uphold the Affordable Care Act (ACA) and build on it to expand affordable coverage, slow the growth of overall healthcare costs, resulting in lower out-of-pocket costs and reduced cost of prescription drugs
- Expand quality access to rural Americans by broadening the scope of healthcare providers eligible for telehealth reimbursement under Medicare and other programs, including federally qualified health centers and rural health clinics
Donald J. Trump, Republican Party
- Repeal the ACA and replace it with a nationwide private insurance exchange
- Eliminate FDA restrictions on generic imports and leverage Medicare to drive down the cost of pharmaceutical drugs
- Focus on improving access and healthcare for America's military veterans
- Rigorous documentation and regulation of services provided to illegal immigrants
The primary focus of each candidate's healthcare platform will be the ACA put into place under President Barack Obama. The decision to build on and improve the existing framework, or to repeal the ACA altogether, will have the most significant impact on healthcare during this Presidential term and beyond.
Potential Impact on Medical Technology Growth
Innovation in the field of medical technology has been accelerating rapidly over the past few years, bringing reduced procedure costs and a higher standard of care. Here are some of the key advances we have seen over the past 12 months that have revolutionized the medical technology field:
- Stronger focus on cybersecurity in medical devices
- Mobile health applications putting more knowledge in the hands of the patient
- Three-dimensional (3-D) printing of implants, instrumentation, and prostheses
- Medical device companies partnering with technology and software companies to aggregate large volumes of medical and consumer data
- Health systems using data to calculate the true cost of services to uncover opportunities to become more efficient and improve outcomes
The rate of technological innovation is unlikely to change under the new administration, but medtech companies might see a shift in pricing and patient accessibility depending on the candidate in office.
If the ACA is repealed under a Trump administration, there would clearly be a major upheaval in the healthcare industry and some of this will trickle into the medtech market. Under a Clinton administration, the basic healthcare infrastructure will remain the same, and it is likely that the medical device tax will be lifted altogether.
The End of the Medical Device Tax?
One likely change that will have everyone breathing a sigh of relief could come with a repeal of the medical device tax – currently at 2.3% under the ACA. Popular opinion is that the tax has long been a nuisance to medical device distributors, costing companies over $2 billion last year. The two-year moratorium put in place earlier this year offered device companies a respite from the price hike, making this less of an issue for the time being. However, the issue will have to be addressed during the next Presidential administration and it is probable that lawmakers will be persuaded to repeal at that point.
In essence, the impact of this election on the medtech industry could be as unpredictable as the candidates themselves. Once the dust settles post-election, the new administration will have to work hard to define their positioning and present the nation with a feasible plan for improving access to affordable healthcare regardless of income or background. Once a solid plan is in place, medtech companies will better be able to see how it will impact their business and plan for future growth.