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The medical device industry in Europe employs 575,000 people in the EU and its total sales amount to €100 billion ($109 billion), according to the European Commission. The industry includes about 25,000 companies and 95 percent of them are small and medium-sized. The European medical device industry is continually growing and changing. The managed equipment services model is becoming more popular and customers are searching for more dedicated and unbiased partners that can assist them with both acquiring and servicing equipment.
While there are a few roadblocks that are preventing change from happening faster, companies and providers can use the changes to their advantage by harnessing the competition in productive ways. Edward Sloan, president and CEO of Ed Sloan & Associates Inc., an independent equipment and parts company, and Stephen Hodgson, U.K. manager director of Asteral, a managed service company, took some time to speak with HealthCare Business News about the latest trends in the European market.
HCB News: How do you see the market in Europe changing?
ES: In Europe, the original equipment manufacturers (OEMs) have historically controlled the service of imaging equipment, mainly due to the lack of affordable spare parts. This mirrors the U.S. market. In the ‘70s and ‘80s there were only a few independent service providers, but then in the late ‘80s a reliable supply chain of spare parts was available. As a result the independent service market grew from a handful of companies to over 200 companies in just 10 years. Since the European market is more advanced, I predict that the independent service model and managed equipment services model will be adopted because of the cost savings it will create for health care providers.
SH:The European market is waking up to the prospect of multi-vendor service (MVS) in radiology. Whilst it is established in the biomedical market, Europe has been a late adopter of MVS for imaging equipment. The managed equipment model is becoming more popular due to a positive shift toward value-added services and a smoothing of capital expenditure. Both rich and poor countries that want to hold onto scarce capital are forming strategic partnerships with vendor neutral experts. The governments are looking to partner with companies in order to reduce the lumpy capital payment model and make it a more predictable revenue payment. The partner organizations are able to assist the clinicians in buying and integrating technologies.
