An old Chinese curse says, "May you live in interesting times." For companies that make capital medical equipment, times sure are interesting.

The medical device excise tax, the unique device identifier rule, global economic woes, a U.S. health care market moving towards value-based purchasing — it all means the industry has a lot of changes to face in the coming years.

At the Radiological Society of North America's annual meeting in Chicago in late November, DOTmed News sat down with David Fisher to talk about some of these changes. Fisher knows his way around the medical imaging OEMs. He was formerly the executive director of the Medical Imaging & Technology Alliance, a trade lobby for manufacturers. He stepped down to become vice president of health care policy and strategy at Siemens Healthcare, an appointment that was made in February. What follows is an edited version of our talk.

DOTmed News: For medical device companies, the big policy question is the 2.3 percent excise tax on device sales that goes into effect next year. What's the outlook on that?

Fisher: We're preparing like we're going to be writing checks in the beginning of January to the government to pay our taxes, but in reality we don't even know what the rules are. [Editor's note: The final rules were released more than a week after our talk.] It's going to take some time for us to modify our systems once we get those rules in order to accurately pay our taxes. In our view there needs to be a delay. It's not responsible government to put a rule out in December, if that's what happens, and enforce a tax 30 days later.

What is the sort of political climate around delaying or repealing the tax?

You saw, I'm sure, over the summer, there was a strong bipartisan vote to repeal the tax. I think 30 some Democrats supported it in the House. [Editor's note: The House of Representatives voted 270-146 to repeal the tax on June 7, but the bill never got voted on in the Senate.] I think it's an uphill battle. In the scheme of the fiscal cliff this is small time, and I think at this point we would be happy with good government, which is a responsible delay to allow us to actually read the rule and implement it effectively, appropriately, so that we know we're actually paying the taxes.

Does Siemens know what sort of hit you'll take from the tax?

We have an idea based on the proposed rules, but we don't know exactly. It's substantial.

The proposed unique device identifier rules were also released this year. For those who don't know, this will create a public database and new labels for medical devices to better track them through the supply chain. How is Siemens preparing for that? What are your thoughts on that?

[The UDI rule] actually has some of the same challenges the device tax has for a company like ours. You say, "A UDI, OK, you put a sticker on a big box, right? What's the big deal?" Well, for a company like ours you have software. Sometimes software is part of a machine, but it may actually be its own device cleared by the [FDA]. Which gets the UDI, the box or the software? What if one of them changes and the other doesn't? In our [diagnostics] business, we have kits. Does the kit get a UDI? What about the things inside the kit, do they each have their own UDI, and is that superior to the one on the kit if that's where it belongs? These are just examples of solvable problems for us, but ones where there is uncertainty and if you are less than careful you can create an exponential challenge curve for making sure we do it right.

Software is subject to the direct marking rule (which requires the label printed directly on the device) but this could be a problem if it's distributed digitally, of course.

Not every company sells the box. Some just sell the software...It seems simple, but one of the things I've learned in my nine months here is things are more complicated than you think when you're in Washington, not understanding the guts of a company and how a product is manufactured and how it's ultimately distributed.

The other day I went to a talk from Lawrence Muroff on how pressures in radiology are forcing radiologists to act not just as image interpreters but as clinicians who "add value" to the hospital as a whole by reducing costs or achieving other enterprise goals. Are developments like this making you change your marketing strategies for new equipment?

[In part because of consolidation of hospitals into larger health systems,] the decision-making authority for the purchase of capital equipment is moving from the radiology department or the cardiology or OR or whatever department you're talking about, upward to the C-suite. And each of those partners of ours, there are different things they're interested in, and we have to be able to provide information and authority about each of those things. When we talk about our products, it would be an unsuccessful strategy to talk to the C-suite about the things we talk about to the radiology department, and vice versa. We have to be thoughtful and make sure we understand the hospital and understand the market.

The fleet of capital medical equipment out there is believed to be the oldest it has been in a while. Do you see this as a permanent trend — a longer capital life cycle?

As you look forward, the fiscal pressure, the pressure on spending is only going to increase, whether it's from the federal government or from companies and their health insurance [plans]... That pressure tends to lengthen the life of capital equipment. I think that's one factor. The other factor is there was a lot of capital equipment spending on imaging products back in the 80s, 90s and early 2000s. And you're right, those products are aging. So again I think there's an opportunity there for a company like ours to reach out to those [consumers] and say, here are the new things that are out there, whether it's at the high-end or entry-level products.