Jeff Smith 3 p.m., March 10
ResMed founder says government shutdown a good thing
But ResMed gets big part of its revenue from government programs
Peter Farrell, founder and executive chairman of San Diego's ResMed, maker of sleep equipment, is quoted in afr.com, the Australian Financial Review, saying that the partial U.S. government shutdown is positive for business. "Any time you can stop any government spending money, it's got to be a plus for the taxpayer," said Farrell to the publication.
But there is a lot of government spending that ResMed feasts on. Last year, an alert reader who contributes to this blog under the tag Ponzi pointed out that in its 2011 10-K report to the Securities and Exchange Commission, ResMed stated, "The cost of medical care in many of the countries in which we operate is funded in substantial part by GOVERNMENT (emphasis mine) and private insurance programs. In Germany, we receive payments directly from these payers. Outside Germany, although we do not generally receive payments for our products directly from these payers, our success in major markets is dependent upon the ability of patients to obtain adequate reimbursement for our products.
"In the United States, our products are purchased primarily by home healthcare dealers, hospitals or sleep clinics, which then invoice third-party payers directly for reimbursement. Domestic third-party payers include MEDICARE, MEDICAID (emphasis mine) and corporate health insurance plans."
Farrell must hope that the partial shutdown continues to not apply to Medicare, Medicaid, and other government programs that benefit ResMed.