Credit Management in the medical devices industry: from stability to strategic risk control
This white paper explores the evolving challenges and solutions in credit management within the medical devices industry through the lens of a seasoned expert: Noy McDonald, a credit management professional with over 10 years of experience at one of the world’s leading medical technology companies, with annual revenues exceeding $24 billion. Noy's journey reflects not only a deep operational understanding of credit processes across Europe but also a shift in mindset — from handling routine receivables to navigating systemic risk.
Noy entered the industry at a time when it was considered stable — backed largely by public hospitals and large private groups with low default risk. Over the years, she witnessed a dramatic transformation. From regulatory pricing constraints to mounting insolvencies and post-COVID financial strain, the medical sector is now riddled with complexities that have fundamentally changed how credit must be managed.
This paper blends Noy’s first-hand experience with actionable insights and strategic recommendations to support professionals navigating today’s healthcare credit landscape.
From stability to credit risk: the new reality in healthcare finance
When Noy began her role, credit management was considered secondary in importance. Payments might be late, but defaults were nearly nonexistent. We had 30% overdue, and it was considered normal
she recalls. Public hospitals were seen as untouchable in terms of risk — after all, they were government-funded. Even private clinics, often owned by large healthcare groups, rarely failed.
But over the past decade, cracks have emerged. Reimbursement codes like France’s LPP (Liste des Produits et Prestations) have driven prices down annually, directly impacting profitability. The government sets the prices. You don’t decide, regardless of whether your client is public or private
, she explains.
These pressures, combined with rising labor costs, created financial fragility across the system. Post-COVID burnout, consolidation of clinics, and delayed reimbursements pushed the sector into a new phase — one where cash flow uncertainty became the norm. In the last 18 months, I’ve seen more liquidations and court-ordered reorganizations than in my previous ten years combined.
How credit risk is evolving in the medical devices sector
One of Noy’s key realizations was that the traditional risk distinctions — public vs. private — no longer held. While public hospitals are backed by the state, they increasingly suffered from payment delays, regional disparity, and administrative bottlenecks. Just because they’re not risky doesn’t mean they don’t cost you cash. And that’s a risk in itself.
Overseas territories like the French Dom-Toms had systemic funding delays, sometimes paying invoices with a 12-month lag. In one case, payment had to be escalated through the hospital pharmacy director to be unlocked just before a government subsidy was received. Private clinics, once considered secure through group backing, began to fall apart. And when they went under, the group often didn’t step in to absorb the debt. I was stunned. Even clinics I’d worked with for years, with solid payment histories, just disappeared.
Operational credit management in healthcare B2B
Faced with growing volatility, Noy didn't rely on hope—she adapted. Her approach included practical tools and cultural shifts. Every client, whether new or long-standing, was monitored using financial information providers. Annual reviews were non-negotiable. Everyone’s financials can shift in a year. I’ve seen A-grade clients go insolvent in six months.
She also insisted on operational visibility. If an ambulance company or small clinic had limited financials, she would reduce their credit line—sometimes intentionally to keep them on her radar. Payment behaviors were tracked closely, and segmentation by public, private, or specialty allowed tailored follow-ups.
One of the more sensitive—but effective — tools in her toolkit was the ability to escalate payment urgency by withholding non-essential shipments. One of the more sensitive—but effective—tools in her toolkit was the ability to escalate payment urgency by withholding non-essential shipments. In certain divisions, particularly trauma and surgical capital equipment, this approach wasn’t taken lightly. In rare cases, if unpaid balances mounted and there was no engagement from the client’s finance team, we would have to escalate
she explains.
But Noy always weighed the operational impact. If a surgeon or clinical lead reached out directly about an urgent need, she would engage, resolve short-term issues, and use the opportunity to reinforce accountability upstream. My aim wasn’t to block—it was to unblock communication and responsibility within their own teams. Most of the time, that worked.
Technology, automation, and the limits of credit control
As her company grew—from managing €20 million in receivables to €95 million — so did the limitations of legacy systems. It took four hours just to generate a dispute report, so that we tried to lead the move and transition to new innovative and much more intuitive tools, enabling real-time dashboards, filtered by hospital group or region, and allowing better forecasting.
But automation had its limits. Due to the highly manual validation process in hospitals — often involving five or more individuals—full automation of dunning processes wasn’t feasible. Instead, Noy focused on building data accessibility, enabling her team to act on the right accounts at the right time.
Strategic credit controls: building as stronger framework
While operationally strong, credit management in the medical devices sector still lags behind in strategic maturity. Noy highlighted how credit policies remained in "draft" mode for years. There was little structured governance, and credit rarely had a seat at the strategic table. To address this, the following strategic improvements are recommended:
- Formalize Credit Policies: Ensure written, approved policies are reviewed annually.
- Use Risk-Based Pricing: Offer differentiated terms based on internal credit ratings.
- Model Exposure by Product Type: Distinguish between recurring disposables vs. high-ticket capital equipment.
- Align with Sales & Finance: Treat credit as a stakeholder in deal structuring.
- Leverage Dispute Analytics: Track reason codes and resolution times to identify systemic issues.
In Noy’s view, the industry is slowly awakening to the strategic value of credit management. You can’t just assume your clients are cash-rich anymore. That era is over
. As reimbursement models shift and clinics merge or close, understanding client risk and behavior becomes central to sustaining growth.
She advocates for more client site visits, stronger interdepartmental collaboration, and better tools for forecasting and alerts. If your client owes you €600K and the only reason they’re not paying is that no one is validating the invoice—how can you accept that?
What the future demands from healthcare credit managers
Credit management in the medical devices sector is no longer about watching overdue invoices. It's about navigating policy, regulation, cash flow cycles, and client psychology — all at once. As Noy’s experience shows, knowing your clients, your risks, and your internal structure is not a bonus—it's a requirement. The future belongs to credit managers who treat this function not just as an administrative task, but as a strategic role in the financial backbone of healthcare commerce.
The future belongs to those who see this function as a strategic lever at the heart of the healthcare sector's financial solidity.