GE Healthcare CEO Says Fiscal Cliff Depressing Imaging Device Sales
In an interview with Bloomberg Businessweek at RSNA, GE’s Healthcare CEO, John Dineen said that uncertainty over whether the mandatory $607 billion in federal government spending cuts and tax increases — the so-called “fiscal cliff” — will go into effect starting on New Year’s Day is forcing his customers to hold off on making upgrades in expensive medical equipment. Advanced imaging devices are of course among the most expensive modern medical devices, and GE Healthcare is the world’s largest maker of medical imaging devices. The company has cited regulatory uncertainty and cuts to health care reimbursement as a reason for depressed sales in the past. In September, Dineen told financial analysts that the market for GE Healthcare equipment is “stalled” because of policy doubts. GE Healthcare third-quarter financials reflected a 2 percent drop in U.S. sales. “It’s impossible to make an investment if you’re a hospital or hospital system if you don’t know what the financial rules are going to be,” Dineen told Bloomberg Businessweek. However, while most manufacturers would undoubtedly agree that regulatory uncertainty is a factor this year, not all financials seem to reflect a stalled market. For example, Palo Alto, Calif.-based Varian Medical Systems Inc. also sells high-end radiology and radiation oncology equipment. Its company-wide revenues for the fourth quarter of fiscal 2012 were up 5 percent from the year-ago quarter and revenues for fiscal year 2012 were up 8 percent from the fiscal year 2011 total.