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Medtronic to make a move into health services


Medtronic wants to be more than a purveyor of medical devices. Bloomberg News reports that changes initiated by the Affordable Care Act are prompting Medtronic to adopt a new business model that will seek more direct contact with patients and hospitals.

The Fridley-based company's Chief Executive Officer Omar Ishrak said providing services to manage patient care will help Medtronic reach more people.

Medtronic's $200 million acquisition of Cardiocom just last week signaled the shift. The Chanhassen-based company provides monitoring services to patients with chronic diseases and has contracts with large European medical centers to run their cardiac catheterization laboratories. The Cardiocom acquisition allows Medtronic to help heart failure patients who do not have their products.

"It's a very much intentional strategy to build out a solutions company," Ishrak said, calling the shift "a transformation."

Reuters reports that Medtronic also plans to sell more than medical devices in emerging markets, including China and India. Helping developing countries with their healthcare systems has been named as a top priority, with efforts expected to offset a domestic slowdown as health care spending in the U.S. is reined in. Medtronic will initially focus on countries in central Europe and the Middle East, where many hospitals are under construction.

Medtronic on Tuesday reported fiscal first-quarter sales that missed analysts' estimates on weaker-than-expected demand for defibrillators and the InFuse bone-growth product. Revenue of $4.08 billion was less than the $4.12 billion average of 16 analysts' estimates compiled by Bloomberg.

Shares declined 2.4 percent to $52.83. They have gained 29 percent since the first of the year.

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