In a Recessionary Germany, Health Care is Booming : Trade: The unified nation’s effort to modernize facilities has created a $7-billion market in medical devices.
Four years ago, Eckehardt Nesener was a laboratory chemist at a high-security hospital that catered to the Stasi--the secret police of former East Germany.
Tucked away in a lush, rural enclave on the outskirts of the former East Berlin, the so-called Stasi Hospital required a difficult-to-obtain security clearance for all employees, and no one entered the huge, stone edifice without the proper credentials.
Today, Nesener easily enters the hospital with only his business card as a salesman for Beckman Instruments, the Fullerton-based maker of medical laboratory equipment. Usually with him is his boss, Jutta Muller from Munich.
“All things have changed,” said Nesener as he guided his new Mercedes-Benz through the narrow streets of the city while handling several calls on his car phone. “The new life makes many opportunities.”
Indeed, sales opportunities for U.S. medical device companies, many of which are based in Southern California, are abundant in the former Communist nation, government and industry officials said.
As part of unification, the government is pouring billions of dollars into the east to modernize health facilities. The resulting demand for medical equipment comes amid a deep recession in Western Europe that has otherwise slowed demand for American products.
“It (health care) is the bright spot in Europe right now,” said Matthew Gallivan, an analyst with the Health Industry Manufacturers Assn. in Washington.
The U.S. Department of Commerce estimates that total medical device expenditures in the unified Germany are expected to top $7 billion this year with an annual growth rate of more than 7% through 2004. That compares to an annual growth of about 4% within the rest of the European Community.
While some of the German device purchases are in the West, the vast majority of new product purchases are in Germany’s six newest states, including Berlin, said Brenda J. Fisher, an international trade specialist for the Commerce Department.
In Berlin alone, the German government has earmarked about $400 million this year--and $4 billion by 1998--to renovate the city’s 33 hospitals and build two new ones, according to a Commerce Department analysis done in January.
The ambitious hospital upgrade project runs the gamut, from renovating old buildings to building psychiatric units and pediatric and neonatal wards.
“They are all in desperate need to renovate their hospitals and clinics,” Fisher said.
At the former Stasi Hospital, now called Klinikum Berlin-Buch, the facility went through tremendous upheaval since unification, shrinking in size from 4,000 beds to 1,700.
Those beds that remain are surrounded by almost primitive conditions. Dr. Detlef Becker, head of the Klinikum Berlin-Buch’s laboratory, said that one of the first goals of the hospital is to raise the standards of the wards.
“We have a very bad infrastructure,” Becker said, referring to barren rooms with old-fashioned beds and an antiquated electrical system unsuitable for modern medical equipment.
Secondly, the hospital is launching a modernization program for its clinical laboratories, which are located both in the main building and on a tree-lined campus about two miles from the hospital.
The facility’s near-empty laboratories attest to the hospital’s needs. In one cubicle, only a cumbersome, inefficient East German-made blood analyzer sits on a scuffed desk.
To upgrade equipment, Becker said he has purchased blood and chemical analyzers from Beckman Instruments and is currently testing a device manufactured by Swiss medical giant Hoffman La Roche.
“We have purchased more equipment in the past three years than we did in the previous 20 years,” Becker said.
But hospitals are not the only target for American medical device firms. Without government jobs, about 40,000 former East German doctors have been forced to establish private practices.
That means purchasing office equipment, such as surgical instruments, X-ray machines, diagnostic instruments and other products in huge volume, said Detlef Geurtler, a journalist with the Wochenpost, a Berlin news weekly. “These doctors have nothing else to do but go private,” said Geurtler.
“It has been difficult,” said Beckman salesman Nesener, whose territory includes eastern German hospitals and doctors’ offices from Berlin to Rostock on the North Sea. “But there are many opportunities for my company.”
