America’s Ineffective Health Care Is a Cash Cow for Bactiguard

The way America’s health care market functions has been a stroke of luck for Bactiguard – completely regardless of how effective the company’s technology is.

Over 60 percent of Bactiguard’s income comes from licensed production of catheters with the company’s anti-inflammatory coated surface, according to the company’s prospectus for the IPO (initial public offering). Of the markets that the catheter is being sold in, America’s is by far the biggest.

America’s health care system is radically different from Sweden’s. Health care is a mega industry in the U.S., with a turnover of $2.7 trillion per year, which represents close to 18 percent of the GDP, according to a new report from the Centers for Disease Control and Prevention (CDC). It’s a perfect fit for Bactiguard, regardless of how effective the company’s technology is — which was questioned in yesterday’s “SvD Näringsliv” by Olof Akre, associate professor at the urology clinic at Karolinska, who had visited and examined the technology.

“I don’t think there’s any reason to use the technology on a broader scale, but rather to do further studies,” he said.

Effectiveness often seems, however, to play a subordinate role in the U.S. Although the health care system is certainly reputable, it is also notorious for over-treatment, a lack of transparency around who pays what and also, unfortunately, mistakes in treatment. Doctors and hospitals are lacking incentive to keep costs down when the bill is sent to insurance companies and threats of lawsuits are constantly hanging over them. Over-treating is the safe bet and, as a result, the country spends more money on health care per capita than any other nation.

“More and bigger efforts are needed in the years to come, particularly in controlling the main driver of higher health-care expenditure in the USA,” stated [one of the study authors at the] OECD (Organization for Economic Cooperation and Development) recently in a critical report on America’s health care system.

The conclusion is that a provider of medical equipment has a good chance at doing business in the U.S. even if the positive medical effect of the product is difficult to prove. The risk of the hospital missing a possibility to treat a patient can be enough motivation to purchase new equipment. This is an enormous benefit for Bactiguard, whose catheter is intended to manage so-called hospital-acquired infections or nosocomial ones, a big and growing problem worldwide. It involves intractable infections, which have left medical science at a loss, as antibiotics lose their effectiveness. On top of that, the population is becoming older in the Western world, which is also driving up the need for health care.

However, it isn’t only the OECD that is critical of the overspending and lack of options and transparency in America’s health care system. To an increasing degree, the patients themselves are, too, according to a recent seminar organized in Washington by the news site Politico. Certain experts there suggested that a “revolution” may be imminent in the health care industry, driven by dissatisfied American patients and to a certain degree by Obama’s healthcare reform, “Obamacare.”

The question is, however, whether it would be a particularly quick revolution. One of Politico’s panel experts was Daniel Wolfson, head of the foundation Advancing Medical Professionalism to Improve Health Care, which campaigns for reformed health care:

“I’ve had four unnecessary EKGs,” he said to Politico, and continues: “I think it’s an uphill battle for the patient to talk a physician out of a procedure.”

For Bactiguard, the American health care market has been a cash cow for decades. Unfortunately, according to the company’s prospectus, the market there is nearly saturated with slowing growth. Bactiguard has to find customers in other markets – likely with significantly slimmed down health care costs.