[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?

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