We can help you make your company more profitable by providing information to your management that will make them more effective decision makers. As a result, your company will better be able to overcome the challenges it currently faces. Are any of the current conditions facing the medical equipment manufacturing industry squeezing your company’s bottom line?
Upcoming medical device excise tax imposed by the Affordable Care Act
The Affordable Care Act’s upcoming 2013 2.3% excise tax on the sale of medical devices will impose a staggering 20 billion dollar cost on businesses and consumers. This tax will not likely be recouped from the increased number of beneficiaries who will be covered under this Act. Expanded coverage is not likely to increase utilization, since most products taxable under this Act will be used in acute care settings where providers are legally obligated to treat patients.
Meet this challenge by providing the best possible information to your management for them to identify production cost reduction opportunities. This starts with delivering your production and supply chain management the key metrics that drive their decisions. Reducing discretionary manufacturing costs requires timely and easily accessible information as to what influences those costs.
For example, to minimize the production costs for energy such as gas or power, both the amount consumed as well as the activities behind that consumption must be known and measured. Depending upon the terms on which your company purchases power, its cost may be dictated by the time of day as well as type of products and rate at which they are being produced.
Beyond its value in providing more accurate product costing for financial reporting, this information will assist your managers in discovering new opportunities to reduce discretionary costs. Continuing with the power usage example, if your power costs vary throughout the day, higher production activity could be scheduled during hours when power rates are lower. This decision would decrease overall costs as long other potential resulting costs, such as employee overtime, did not exceed the amount of power cost saved.
HITECH Act requirement for medical device interoperability with electronic healthcare records
The “meaningful use” standards for user data for many types of medical devices under the HITECH Act are expected to impose new requirements to facilitate the seamless flow of patient monitoring data from these devices to the patients’ electronic health records. The reliability, security and data integrity issues that accompany this technology will impose significant new costs that will directly impact your company’s profitability.
Optimum Business Decisions can assist your company by working with your decision makers to implement the product development needed to comply with the HITECH Act EHR data integration requirements. We will assist you by identifying essential information needed to forecast the related compliance costs, including the cost of liability coverage for possible adverse consequence to a user due to corrupted or lost electronic health record data. Building a complete inventory of all of these costs is vital to this process.
With the benefit of advance planning based on solid financial information, your company can determine the best options to initiate future compliance. This could be via in house development of the required software technology, through collaboration with other device makers, or by purchasing software from the best value provider.
Less available funding for early state companies
In the existing venture capital market, medical device manufacturers face the headwinds of competition with new industries including social networking, personal digital assistant application developers, and green technology companies. The time needed to market for new products is longer, and regulatory hurdles are typically higher for medical equipment manufacturers than for other competing technologies.
We can help your company improve its prospects for venture capital funding by assisting you with the content and presentation of information your potential investors will want you to provide. This could include financial projections and development of the underlying financial data and layout for the presentation of your company’s business case to submit to your potential funders.
We look forward to helping you to unlock your profitability through better informed business decisions. Visit our Services page for more information on how we can help.