Uncertainty that U.S. lawmakers will reach a deal to prevent automatic budget cuts is crimping the country’s medical-devices market just weeks after President Barack Obama’s re-election safeguarded his 2010 health law, the head of General Electric Co.’s health-care unit said.
“We’ve gotten through the election and removed the ambiguity of the debate around the Affordable Care Act, but we still have to plow through the fiscal cliff,” GE Healthcare Chief Executive Officer John Dineen said. “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.”
Doctors and hospitals are watching as Obama and Congress work to avoid $607 billion in spending reductions and tax increases due to take place on Jan. 1, Dineen said yesterday in an interview at the Radiological Society of North America’s annual meeting in Chicago.
GE Healthcare, the world’s largest maker of medical-imaging devices, posted a 2 percent drop in third-quarter U.S. sales after a 1 percent gain in the three months ended June 30. The market for the equipment is “stalled” because of the policy doubts, Dineen told analysts in September.
The nonpartisan Congressional Budget Office has said a failure to avoid the fiscal cliff could trigger a recession and push the unemployment rate to about 9 percent, compared with October’s 7.9 percent. Lawmakers return to Washington this week after the Thanksgiving holiday.
Dineen said Obama’s health-care overhaul will lead to a greater focus on consumer choice, patient comfort and physician productivity. GE Healthcare introduced a quieter magnetic-resonance imaging scanner, enhanced software for three-dimensional image viewing and an ultrasound device tailored for breast-cancer detection.
The unit’s $18.1 billion in 2011 revenue was 12 percent of the Fairfield, Connecticut-based parent’s total.