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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: DlphcOracl who wrote (42342)5/28/1999 8:16:00 AM
From: HeatherN  Read Replies (1) of 120523
 
DlphcOracl,

MDT has made recent acquisitions into the neurologic device market attempting to expand their business into products such as spinal cord stimulators for pain etc. Although these items have a high profit margin and are gaining acceptance and popularity, insurers are becoming increasingly resistant to paying for these. A typical total cost for the insurer is between $15,000 and 25,000 for these devices. Pain management has been largely untouched by the insurers as they have focused on other areas to trim their costs such as cardiac stents. It is inevitable that pricing pressure will soon come to these neurologic areas as well.
As a user of MDT's products, I am cautiously optimistic but still stay away from the stock because of the current health care environment (Insurers holding much of the control for pricing pressure). MST's future revenue growth is uncertain to me at this time.
Just an end users viewpoint :)
HeatherN
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