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“No Financial Crisis, rather an Economic Crisis”
Joachim Schmitt; © BVMed
MEDICA.de spoke to Joachim Schmitt, Director General of the German Medical Technology Association (BVMed), about the situation of the member companies of the association, the mini crisis in his sector and advantages over the car industry.
MEDICA.de: Recently, the BVMed has asked a number of medical technology companies to what extent they are affected by the financial crisis. Do you get worry lines now when you hear the word financial crisis?
Joachim Schmitt: I do not really get worry lines but I think about the position of the health market in the total market. We do regard ourselves as somehow more robust than other sectors. Thus, at the moment, the medical technology industry does not face a financial but an economical crisis: the demand for products or services partly decreased as a matter of fact. Yet the companies do not go bankrupt and are still capable of paying their employees.
MEDICA.de: What kind of companies took part in the poll?
Schmitt: 120 medical technology companies who supply the ambulant, inpatient and home care sector have answered our questions. Among those were small, middle-sized and large businesses with very different business areas, ranging from surgical dressings, auxiliary means to syringes and implants. Medical technology companies develop and sell very different products and services. The BVMed represents all business areas except for capital equipment which are large medical devices such as used for magnetic resonance imaging.
MEDICA.de: What areas of the medical technology sector come off best, which are the ones fighting most?
Schmitt: The more indispensable to life products are, the more likely they are to be financed by health insurances and the less the companies are hit by the financial crisis. If products are concerned that need a private co-payment, presently more patients settle for less and are satisfied with primary health care, or postpone such expenses.
Business start-ups and larger companies are also more likely to be affected. It is mainly them who struggle to get a loan. It means a high risk for banks to give a loan to a business start-up that is not yet established in the market. Large businesses on the other hand usually need high loan amounts. That is equally difficult at the moment.
Apart from this, it still holds true: wounds have to be tended, illnesses must be treated! And we do not choose when to fall ill. Insofar, the demand in health care does not drop.
MEDICA.de: Was that also the quintessence of your poll?
Schmitt: Yes. The reactions of the companies so far can be interpreted as precautionary measures and mostly do not happen out of emergency. A third of the companies, according to the poll, have had a loss in turnover since the end of last year. Another third imposed a hiring freeze. However, a whole quarter of all the companies have stated that they have not yet perceived any effects of the financial crisis. And only four percent of the companies have cut jobs so far. Short-time work is no issue at the moment just as suppliers do not have any problem yet because the demand is still high.
MEDICA.de: That means some of the consequences of the crisis might reveal themselves only in the future?
Schmitt: A forecast is very difficult. Unfortunately, I do not have that much prophetic talent. Obviously, I wish that we are at the peak of the crisis right now. In this case, the medical technology sector would have got off lightly. More realistic is probably that the peak is still lying ahead and that the medical technology sector will face more problems in future, if for instance suppliers go bankrupt. Pricing pressure we have anyway though, with or without financial crisis. Because of the rising prices for resources and the increased personnel costs in hospitals, the hospitals already for a long time pass the financial pressure to the manufacturers of medical products. Therefore, companies have to think about rationalisation anyway.
MEDICA.de: Compared to the car industry, the medical technology sector is still prosperous though.
Schmitt: We would not call it prosperous. But obviously we have a clear advantage over the car industry: whether to buy a car or not is a personal decision that everyone decides individually. Health in contrast is a public and social commitment.
The interview was conducted by Anke Barth.