While procedures volumes may decline, analysts said the effects likely won’t reach levels seen in 2020 or during the Great Recession.
Medical device companies are poised to weather an economic slowdown even as they continue to face hurdles linked to the pandemic such as persistent supply chain woes and staff shortages, analysts say.
While device makers aren’t completely immune to potential recessionary pressures, the industry should be fairly resilient to a deepening downturn, according to Shagun Singh, an RBC Capital Markets analyst.
“I think there are a lot of puts and takes by company to consider,” Singh said. “But there’s definitely a lot of opportunity given that there is the defensive element in healthcare and medtech.”
While economists and politicians debate whether the U.S. has fallen into a recession, indicators suggest the economy is cooling after two straight quarters of declining GDP. Meanwhile, surging inflation and interest rates also are contributing to a slowdown as consumer spending wanes.
Those economic factors may curb consumer spending on devices and result in a drop in nonemergency care, similar to what transpired in 2020 amid the COVID-19 pandemic, analysts say.
At the same time, the healthcare environment is considered more insulated — especially since 2008 and 2009 — with more people having insurance coverage under the Affordable Care Act (ACA) and stronger safety-net programs like Medicaid expansion.
By Ricky Zipp | MedTech Dive
Image Credit: Getty Images
Quite comical … You had to put a plug in for the disastrous Obamacare which has decimated healthcare delivery and the wider American economy. Being in the clinical trenches everyday, I see how disconnected you are from reality.