Whether the recession is officially over or not, the medical device arena has suffered along with the rest of the market. In some instances, it has taken a hit even more so than other sectors. Quite simply, the number of procedures being performed is down, so, consequently, revenue numbers for most medical device manufacturers are as well. So, how can this article be based on the concept that medical device manufacturers could be considered a solid investment? Let’s explore the idea.

For starters, let’s consider why procedures are down. A number of factors can be attributed, but one of the most all-encompassing reasons is health insurance. Obviously, the recession has hit many people and companies in the pocketbook (sort of a requirement of being in a “recession”), but the shockwaves that come from it run much further. Co-pays and out-of-pocket expenses related to health insurance have consistently been raised over the years making it more difficult for many people to afford procedures. Sadly, many therapies or surgeries that should, by no means, be considered “elective” are being treated as such by the general population. This is a not a reference to a facelift or tummy-tuck, but to things such as diabetics properly taking care of themselves or a heart issue that is “put off” as it only seems minor at the moment. It’s no startling realization that when people can go to the doctor at little or no cost out of pocket, they are much more apt to treat any ailment quickly than if they have to pay for it themselves.

Also a result of the recession is the number of people that have lost their jobs and are now without health insurance. While the pure lack of health insurance really does not need any further explanation, other situations that surround it can use a bit more thought. Even if a person does find a new job, they may still be without insurance. The general business practice of a probationary period where insurance is not available to new hires has been around for years, but it is becoming more prevalent and, in some cases, the time frame is being extended to a longer period.

Government assistance (i.e. Medicaid) is a viable option for many people, but it is important to remember that this is not the most profitable situation for hospitals. While it does still generate revenues, payments through this service are simply at a lower profit margin. On a side note, it has been purported that the number of non-paying patients has increased over the years as well further contribution to hospitals becoming more financially strapped than ever before.

So what does this financial crunch have to do with investing in medical device manufacturers? Well, hospitals, doctors and surgical centers are always going to stay up to date with the most current technologies, but are looking for medical device suppliers to provide these technologies with effective cost-cutting features. Small medical device manufacturers with cutting-edge technologies can be an answer for this.

When searching for a company of this nature, it is important to not stretch too far with a company that is still very early in development as there can be too many factors involved that can delay progress in bringing the product to market. Identifying a company with a device that is already cleared by regulating commissions is the path of least resistance and offers the greatest potential for growth.

Vycor Technologies, Inc. (OTCBB: VYCO) manufactures ViewSite™ Brain Access System (“VBAS”) as an alternate for standard retractors used in brain surgery. While still relatively new to the market, VBAS has been used in over 80 surgeries with rave reviews from surgeons as to how it is redefining brain retractors. Standard brain retractors, which have had virtually no developmental change in 50 years, administer localized pressure on brain tissue and impair the doctor’s vision during surgery. VBAS has addressed both of these issues through its proprietary design. Not only is it safer for the patient as it evenly distributes the pressure to expose the necessary area of the brain, but it is transparent and has a “magnification” aspect to it which allows the surgeon superior vision and clarity while performing the operation. In addition, the growth potential for Vycor is exponential as retractors are used in many surgeries, opening the door to developmental expansion into other areas of the body for the device. Vycor is presently researching and developing a new system to be used in spinal surgeries.

BioMedical Technology Solutions Holdings, Inc. (OTCBB: BMTL), through its, wholly-owned subsidiary, BioMedical Technology Solutions (“BMTS”), manufactures and markets the Demolizer™ II System for medical waste disposal, often referred to as “red bag waste.” The Demolizer System is a portable unit that, through a heating process, renders red bag waste as common garbage. The government has strict laws regarding the handling and proper disposal of biomedical waste and strict policies on documentation of compliance. Typically, hospitals, doctor’s offices, surgical centers, veterinarians, etc. pay for a biomedical waste disposal service to pick-up the red bag trash and haul it away. Yearly fees for these services can be extremely high as proportionate to volume. Through the Demolizer II System, BMTS has provided a solid solution to save money (pick-up/haul away services are no longer needed) and make the workplace more efficient as all required documentation is provided in a printout right from the machine. With focus on our environment becoming such a “hot button” topic anymore, it is also important to note that the System is a “green” solution to biomedical waste. Much like Vycor’s VBAS, the Demolizer is gaining in popularity. Repeat orders have recently been placed from organizations such as the U.S. Department of Veteran Affairs and U.S. HealthWorks.

Both of these companies meet the criteria for potential solid investments within the medical device sector. While still growing, they both have compliant, proven and marketed technologies that are making ripples which could become waves in the industry as corporate development continues. Their products provide a superior alternative to what is currently being used today and have to potential of replacing those products with a “cost-cutting” capacity as well. Marketing will take a bit of time as these smaller companies are on limited budgets, but as time advances, more and more industry attention will be focused on what they offer. Not only does this make a path for greater revenues, but can often bring up mumblings of the Holy Grail for investors, the speculation of a buy-out from a larger corporation.

More information on Vycor Technologies, Inc. can be found at www.vycor.com.

More information on BioMedical Technology Solutions Holdings, Inc. can be found at www.bmtscorp.com.