Massachusetts: The “Medical Device” State?

Massachusetts’ medical device exports have grown more than twice as fast as other state exports, and currently represent about 10 percent of all medical equipment the United States sells abroad, according to a report commissioned by an industry group.

The study, conducted by accounting and consulting firm Deloitte & Touche, also found that the Bay State’s device industry employs more people than any state other than California.

More than 24,000 people in Massachusetts and 392,000 people nationally worked in the medical device industry in 2008 (the most recent data available). The sector includes a number of start-ups in addition to Natick-based Boston Scientific Corp. and Waltham-headquartered PerkinElmer Inc.

“[Medical device companies] are still creating hundreds of jobs, and the trend line for the future looks even brighter as we come further out of the global recession,” said Tom Summer, president of the Medical Device Industry Council (MassMEDIC), which commissioned the report.

The data indicate that medical device exports grew at an annual average rate of 11 percent over the past decade, compared with a 4.6 percent rate for all exports, and 10 percent of all medical device exports from the United States. Last year, medical equipment from Massachusetts accounted for 13 percent of all state exports and 10 percent of medical exports from the United States. In addition, venture-backed start-ups made $286 million, which amounts to 12 percent of all U.S. venture capital investment in the medical equipment sector; this is notable considering Massachussets comprises just 2 percent of the U.S. population.

Mike O’Hara, a partner in Deloitte & Touche’s Boston office, said it is probably too soon to gauge the impact on the device industry of the battle by Congress over healthcare.

“We’ve got a concentration of talent that feeds the industry,” O’Hara said. “It’s a growing industry, and we should be focusing on it.”

Another concern is whether insurers will curtail reimbursements for medical devices due to pressure to control costs.

“There’s a concern with how [insurers] are going to respond to healthcare reform,” O’Hara said. “Because at the end of the day, they’re the ones that are going to have to pay for medical devices.”

O’Hara presented the study earlier this month at the MassMEDIC meeting in Waltham.