We spoke to medtech professionals and experts about a possible upcoming recession in the UK and the USA. They say the sector is not as “immune” as some might think…
In the run-up to what looks like an economic downturn, industry speculation is hot. Whether or not it’s a good time to invest, and whether or not certain sectors can turn the other cheek with confidence of “immunity”, remain active topics of debate. And in that debate, the medical technology industry is supposedly poised to withstand an economic crisis.
But just how strong can it stand in the storm? And how does it compare with other parts of the health tech industry?
We can’t “invest our way out” this time
Craig Oates is the UK managing director of Doctrin, a patient engagement platform that is currently providing remote consultation services to primary care patients in the UK midlands.
He told us that medtech will not be immune to a recession, and that people will not be in a position to “invest their way out of difficulties” like some did in the previous global crash.
Speaking with Health Tech World, Craig added: “We are already seeing staff leave the NHS, opting to move to the private sector or pursue healthcare roles overseas due to higher pay and a better work-life balance.”
“The cost-of-living crisis will likely make this worse, increasing the ‘brain drain’ we’re currently seeing impact digital innovation in healthcare.
“This will have wider impact on elective recovery as staff shortages in the NHS worsen, making it more difficult to cut down on long waiting lists built up over the pandemic.”
He added: “Digital health technology is now needed more than ever to help maintain recovery in the NHS, however NHS budgets are likely to be diverted away from technology so money can be directed to alleviate bigger budget pinch points, such as staffing.
“This could be counter-intuitive as tech plays a major role in addressing the challenges the NHS faces, particularly around workforce.
“However, it is not considered a quick fix, so funding tends to be diverted during times of financial difficulty.”
Health tech and investment
Craig is sure that tech companies will also face investment challenges, recruitment and retention as well as research and development.
He added: “At Doctrin we are continuing to invest, however in the case of some health tech companies reduced funding might impact their ability to survive.”
Where does healthcare stand?
He added: “Surgery, cancer treatments and/or the dispensing of medications and other therapies will never “wait” for a recession to end. Beyond the care itself, however, there can be significant impact.
“Healthcare systems, at the time of a recession, become much more sensitive about their spending and overall financial positions.
“As a result, they will look for additional channels of revenue and become stricter when it comes to spending. Interestingly, while spending becomes more careful, systems actively seek new technologies that are built to save them money, create new revenue channels, or increase revenue for existing channels.
“Also, depending on the financial position of a given health-focused company or healthcare system, management may see a recession as an opportunity to differentiate itself through new technologies.
“Of course, in a recession situation, even if a company is in a positive financial position, it will apply a far stricter set of criteria for decision-making.”
Investment in an economic downturn
Investment in new companies and technologies are encouraged more in a recession than at “premium” times. Dr Bahagon continued: “There are great deals to be made on innovation during challenging economic times, but the entity will need the financial wherewithal to be able to do that.
“A recession is EXACTLY the time to invest in companies and new technologies. If you wait until a market is hot, you will end up paying a high premium and will likely be a me-too rather than a true leader.”
Medtech in a recession
Paul Landau, CEO and Founder of Careology, told us that “no sector can be complacent” with coming financial hardships.
He said: “MedTech is such a broad term, made up of many different areas, but none are immune to an economic downturn.”
“Some sectors may well be more susceptible than others.
“Cancer services have been so badly hit by COVID, with enormous challenges being faced.
“Digital solutions like Careology, which provide digital cancer care that enables increased clinical capacity, and delivers financial and operational efficiencies will likely gain further traction.”
He added: “There are very real operational and financial challenges that healthcare will face like other industries.
“However, the financial pressures of a recession presents digital opportunities like digital cancer care to drive efficiencies.
“There is greater opportunity during a recession where digital has the power to drive massive efficiencies, but that doesn’t mean we are immune or complacent.”
A world of change
Dr Bahagon concluded: “In my 20+ years of medtech and healthcare experience, the famous quote of Gen. Eric Shinseki has remained in my mind throughout: “If you dislike change, you’re going to dislike irrelevance even more.” The world of medtech is a world of change. In many respects, we are working to bring change for the sake of improving care.
“But sometimes, change is foisted upon us. Either way, we must embrace our situation and continue to innovate.”
Microsoft invests £2.5 billion in UK AI
TMS shows promise in tackling depression ‘epidemic’
AI depression app set for NHS clinical trial
UK Biobank releases world’s largest single set of sequencing data
Listen: Longevity, Eastern wisdom and Western science
Fundamental principles of healthcare digital twins
Tackling the diagnostic testing sustainability problem
Gym-going men ‘unaware’ of protein risk to fertility
Anti-choke mug protects Parkinson’s patients
AI model predicts breast cancer risk without racial bias
- Diagnostics3 weeks ago
3D model will advance understanding of spinal injury pathology
- Opinion7 days ago
Why it’s time to revisit workplace mental health initiatives and make them work for everyone
- AI3 weeks ago
AI can help predict survival outcomes for cancer patients
- Research4 days ago
Tackling the diagnostic testing sustainability problem