How One Medical Device Firm is Dealing with Obamacare

Posted in Medical Device Business by Qmed Staff on October 23, 2013

Merit Medical (South Jordan, UT) has found a unique way to deal with the ramifications of the Patient Protection and Affordable Care Act, also known as Obamacare. While the company will have to pay millions of dollars to support the new law, the company has discovered a unique way to balance the books.

One of Merit Medical’s latest devices is the Basix Touch, an inflation system for use during angioplasties. As of now, healthcare facilities and hospitals pay approximately $35 for each Basix Touch. Out of this, 2.3% of each purchase goes into federal coffers, helping to fund Obamacare.

The new healthcare law expands Medicaid coverage and provides additional financial assistance for some people purchasing insurance through the federal marketplaces. Because of this, profit margins at Merit Medical have declined.

To cover reduced margins, merit Medical no longer provides 401(k) matching for its employees. In addition, the company stopped donating to charities it previously supported, such as Junior Jazz and The Leonardo.

That said, the company has not had to lay off any of its employees yet. In total, the company employs 1,700 people.

“You take that kind of money out of a company and something has to give and it's basically research and development or marketing, and those are jobs,” notes Fred Lampropoulos, CEO of Merit Medical.