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Industries & Professions /
Medical Equipment Manufacturing
The medical equipment and device manufacturing industry (often referred to as the medtech industry or medical devices industry) designs and manufactures a wide range of medical products that diagnose, monitor, and treat diseases and conditions that affect humans. These products range from inexpensive tools, such as tongue depressors, to complex, multimillion-dollar systems, such as magnetic resonance imaging systems. Other examples include pacemakers, stethoscopes, replacement joints, hip implants, miniature robots that perform complex surgeries, synthetic skin, artificial hearts, scalpels, medical laboratory diagnostic instruments and test kits, patient management software, and software that is used as a component in a medical device.
Medical technology (also known as medtech) is used in hospitals, clinics, the offices of doctors and dentists, medical laboratories, outpatient treatment centers, and any other facility where patients are diagnosed and treated. Medical technology, along with pharmaceuticals and advances in public health (sanitation, safety, etc.), has improved the quality and length of human life. As a result of these developments, average life expectancy in the United States increased from 47 years in 1900 to 78 years in 2016.
Although medical instruments have been used since the beginning of human history, the modern medical equipment manufacturing industry traces its origins to the mid 19th century. At that time the medical profession became more regulated and physicians and other medical professionals sought more consistency and reliability in medical instruments and equipment. Today there are more than 6,500 medical device companies in the United States, according to SelectUSA, and more than 80 percent of them employ 50 or fewer workers. Ernst & Young reported that all publicly traded medtech companies are classified as belonging to one of five product groups: imaging technology, non-imaging diagnostics, research and other equipment, therapeutic devices, and other (products that do not fit in any of the other categories). The Food and Drug Administration’s (FDA) Center for Devices and Radiological Health regulates all medical technology ranging from bandages and splints to high-tech devices.
In 2015, medical device spending in the United States totaled $148 billion and is expected to reach $155 billion by 2017. According to a 2014 report “Estimates of Medical Device Spending in the United States,” by Gerald Donahoe and Guy King. This represented 5.9 percent of total national health expenditures. The medical device industry and the market for its products are expected to change in the coming years. Following enactment of the Affordable Care Act in 2010, a medical device tax of 2.3 percent on all medical manufacturing, dampened growth and profits in the industry. Congress placed a two-year moratorium on the law in 2015 and seemed ready to repeal the tax altogether with the support of the Trump administration as of January 207. Medical technology companies widely viewed the tax as a hindrance to innovation essential to future success and to keep pace with evolving technology.
Opportunities are available in this industry for people with all educational backgrounds. Nearly 40 percent of workers surveyed by Medical Product Outsourcing magazine reported “bachelor’s degree” as the highest educational level they had achieved. Slightly more than 33 percent had a master’s degree. Nearly 9 percent had a doctorate, 7 percent had an associate’s degree, and 7 percent were high school graduates.
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