Trends and segments for medical devices in the EU market

Intramural market

• In most EU countries a tendency can be observed towards a decrease in the number of hospital beds, which is partly achieved by reducing the average length of stay of a patient in a hospital. As a result, homecare treatment is continuously growing. Hospitals in Central and Eastern European (CEE) countries have also reduced their number of beds and focus more and more on smaller but better equipped facilities.

• The majority of the hospitals, approximately 80%, purchase their medical products through hospital trusts. These trusts are regionally oriented and represent hospitals within a certain region.

• The major benefit of joining a trust is the reduction of prices (discounts) as a result of increased bargaining power with suppliers. Presently, the intramural market exceeds the extramural market in size with respect to the demand for medical devices.

Extramural market

• In the extramural market the number of medical staff per capita is slightly decreasing. Overall, due to population growth and increasing life span, the consumption of medical Devices and medical disposables in the extramural market is increasing.

• Due to different job descriptions and responsibilities, the number of physicians in CEE countries is higher and the number of nurses is lower compared to other EU countries.

Trends

• The demand for medical devices in the EU has grown slowly but gradually, mainly as a result of increasing healthcare standards.

• Major reasons for this development have been the rising per capita incomes in the EU, in combination with the availability of new (often costly) medical technology.

EU demographics: ageing population

• The ageing population1 is an important driver of growth for the demand for healthcare, health spending and thus the demand for medical devices.

• This trend is especially expected to have influence on certain parts of the market: for example, the extramural market in particular will increase (healthcare centers, homecare services and self care). In this market segment it will lead to an increase of homecare devices, medical equipment to combat chronic diseases and diagnostic equipment that can be monitored from a distance.

• The self-care market is expected to keep on growing; medical products like digital blood pressure equipment, self-diagnostic units for diabetics are increasingly sold as an over-the counter (OTC) product by retail organizations.

• Another market that will clearly be affected by the ageing population is the market for orthopedic devices. An increasing number of older people also means a growth in Musculoskeletal disorders which require orthopedic treatment.

EU healthcare: increasing focus on efficiency and costs

• The tight labour market in the EU in relation to limited public budgets for healthcare has had a considerable influence on the demand for medical devices.

• Labour costs have increased slowly but gradually, forcing the healthcare industry to look for efficient substitutes for labour intensive (thus: costly) practices. For example, nowadays heart monitors allow one nurse to take care of a number of patients simultaneously and disposable catheters avoid regular changing of diapers and bed sheets.

EU healthcare: privatization of public services

• Although equal access to healthcare is generally seen as a major political priority, public spending on healthcare is under pressure. Of particular concern with an ageing population, the pressure on expenditure on healthcare will increase further. As a result, privatization in the health sector is becoming an increasingly important factor.

• An important change due to the privatization of healthcare is that price is becoming more important in procurement processes.

• Decision makers have to clearly state why they prefer a certain product. In the past, decisions could partly be based on previous experiences and brand names.

• In the new situation unknown brands are giving a better chance if it can be proven that they offer the same (or even better) performance at lower costs.

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