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Device Chiefs: Healthcare Reform Here to Stay, Innovation at Risk [Orange County Business Journal (CA)]

By Reed, Vita
Proquest LLC

HEALTHCARE: Three share stage, concerns on U.S. competitive position

Healthcare reform won't be repealed and the Supreme Court is unlikely to strike down the individual mandate that requires the purchase of insurance.

That's the quick take on a recent gathering that featured a trio of Orange County medical device executives sitting back in leather chairs and talking about their respective segments of the industry and the role their companies play in the nation's healthcare system.

The lineup included: Michael Mussallem, chief executive of Edwards Lifesciences Corp. in Irvine; James Mazzo, president of Abbott Medical Optics in Santa Ana; and Robert Grant, chief executive of Rochester, N.Y.-based Bausch & Lomb Inc.'s surgical unit in Aliso Viejo.

All agreed that healthcare reform would not be repealed, though each said they expect some "fixes" would be made on the margins.

Only Mazzo, who is also chairman of trade organization AdvaMed, said he minks the Supreme Court will overturn the individual mandate when it hears a case challenging the provision in 2012.

The talk was presented by the Forum for Corporate Directors at the Hyatt Regency Irvine. The moderator was Paul Keckley, a Washington, D.C.-based executive director of Deloitte LLP's healthcare research arm, the Deloitte Center for Healthcare Solutions.

The healthcare industry in general, and the medical device segment in particular, is "something which most people have strong opinions about but very little facts," Keckley said.

Then he tossed out various topics to the chief executives on stage.

Grant, a former executive with Allergan Medical, the cosmetic arm of Irvine-based Allergan Inc., said he was worried most about "our competitiveness as a nation," which he called a crucial factor in medical device makers' decisions on where they will make investments.

"Other countries right now are so focused on getting our investments, and our own government is absolutely not focused" on that, Grant said;

"At the end of the day, we have shareholders to answer to and we have to place our bets on where we think we're going to get the greatest return," he said.

The "pace of innovation" in medical devices is a chief concern for Mazzo.

"At AdvaMed, our whole goal is (to make sure) the whole counfty has access to innovation when we want to," he said.

Mazzo said that the U.S. has now fallen behind Europe and the Far East when it comes to introducing medical devices.

He tied his concerns on the pace of innovation to device fees charged by the Food and Drug Administration.

The fee structure is a matter of current negotiations between the industry and the FDA. Mazzo said he was concerned that any hike that resulted in the addition of jobs at the FDA could slow approvals because "people add bureaucracy and people slow down processes."

"You can't allow the government to get bigger because it will slow down innovation," Mazzo said.

He contended that the slower regulatory pace in the U.S. has led devjflj makers with revenue of $100 million or less - a category that accounts for about 70% of AdvaMed's membership - to build research and development and manufacturing in other countries.

The decisions to go offshore are often made by companies backed by venture capitalists and private equity investors who are seeking quicker returns, according to Mazzo.

And they're not easily reversed.

"If you build a manufacturing facility, it is very difficult to move," Mazzo said. "Once you build it, you're there."

All three executives called for more of a "consumerist" concept as an idea to give workers a "skin in the game" when making decisions on healthcare.

Mussallem said business executives should be asking, "What can we do to make my employees healthier? How can I help them be better decision makers?"

He also said "we should be not so quick to discount education" about things such as smoking and high-fat diets and their effects on workers' health.

Mussallem, Mazzo, Grant: only one sees chance of Individual mandate being overturned

Mazzo: bigger government will slow down industry innovation

Mussallem: help employees become "better decision makers" on healthcare

Grant: other countries more focused on device makers compared with U.S.

Copyright:(c) 2011 CBJ, L. P.
Wordcount:688



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