Clinical operations note: why-i-stopped-ignoring-globus-medical039s-depreciation-data-and-you-should-too-86

I’ll just say it: if you’re evaluating a medical device partner without looking at their depreciation and amortization numbers, you’re flying blind. I learned this the hard way, and it cost me—both in credibility and in wasted budget.

I’m a supply chain coordinator handling surgical instrument and implant orders for a mid-sized hospital network. I’ve been doing this for about six years. In my first year (2018), I made the classic mistake of focusing only on product specs and quoted prices. I didn’t care about a vendor’s internal accounting. Why would I? I wasn’t their CFO.
But after a particularly expensive mistake in Q4 2021, I started digging into the financial health of our key suppliers. That’s when I found Globus Medical’s depreciation and amortization data for 2022—and realized how much I’d been missing.

Depreciation & Amortization: More Than Just Accounting Fluff

Here’s what most people don’t realize: depreciation and amortization (D&A) tells you how a company is investing in its own future. High D&A can mean they’re buying new equipment, building new facilities, or acquiring technology. Low D&A might mean they’re coasting on old assets.
For Globus Medical, the 2022 D&A numbers weren’t just numbers—they reflected a company actively investing in its ExcelsiusGPS navigation system and expanding its manufacturing capacity. That’s the kind of signal you want from a partner who supplies spine implants and surgical instruments.

In 2022, Globus Medical reported approximately $70 million in depreciation and amortization (Source: Globus Medical annual report, 2022). That’s a significant number for a company of their size. It told me they were putting capital to work—renewing equipment, scaling production. For someone like me, who orders thousands of units of surgical instruments annually, that means more consistent quality and better supply reliability.

The 2022 Audit: A Wake-Up Call

Let me give you a concrete example. In late 2022, we were considering a large order for endoscopic spine surgery instruments. We had quotes from Globus Medical and two other vendors. The other vendor’s price was 12% lower. Looked like a no-brainer on paper.
But something made me pause. I pulled their financial filings (public, since they’re all traded companies). The lower-priced vendor had declining D&A year-over-year. Their assets were aging. Globus Medical’s D&A was stable or increasing. That suggested they were maintaining—or upgrading—their production lines.
I went with Globus Medical anyway (uh, after a lot of internal pushback). The other vendor? They had a 6-week production delay the next quarter because a key piece of machinery broke down. My decision saved us from a $45,000 rush-order situation plus a 2-week surgery postponement. That one decision paid off my entire year’s homework.
Basically, D&A is a lagging indicator of asset health. Ignore it at your own risk.

Why Your Clinical Lab and Pulse Oximeter Decisions Are Similar

You might be thinking: “That’s fine for spine implants, but I work with clinical labs or pulse oximeters. Does this even apply?”
Yes. Honest, it does.
Here’s what vendors won’t tell you: the margins on commodity medical devices like pulse oximeters and diagnostic monitors are tight. A vendor’s ability to maintain quality while keeping prices competitive depends heavily on their production efficiency. And production efficiency is directly tied to how often they reinvest in their equipment (i.e., depreciation).
Same for clinical lab equipment. If a manufacturer is under-investing (low D&A), their instruments are older, prone to calibration drifts, and slower. That affects your lab’s throughput and accuracy.
So when you’re evaluating suppliers for ECG monitors, ultrasound systems, or even dental handpieces, take five minutes to look at their D&A trajectory. It’s a proxy for how committed they are to innovation and reliability.

What About Shockwave Therapy and Other Emerging Tech?

Shockwave therapy is a great example of a growth area where D&A matters. If a company is ramping up production of shockwave devices, they need to invest in specialized manufacturing tooling. That shows up as higher depreciation. For a hospital looking to add this service line, choosing a supplier with rising D&A often means you’re getting a partner who’s serious about scale and long-term support, not just a first-mover with outdated equipment.
This isn’t theory. I’ve seen it play out. In early 2023, we evaluated two shockwave therapy vendors. Vendor A had high R&D spend but flat D&A. Vendor B had moderate R&D but increasing D&A. We went with Vendor B. Their production lead times were shorter, and their device failure rate was lower in the first year (3% vs. 8%). The D&A data was a tell.
Put another way: D&A is the fingerprint of a company’s real investment behavior. R&D can be aspirational. D&A is money already spent.

What About Globus Medical’s Audubon Facility?

Speaking of investment, Globus Medical’s Audubon campus in Pennsylvania is a physical embodiment of their depreciation numbers. They’ve put serious capital into that facility for manufacturing and R&D (Source: Globus Medical news releases, 2023). That investment will show up as depreciation for years. For customers buying spine implants or navigation systems, that means localized production, better quality control, and faster response times.
If you’re in the Northeast and sourcing surgical instruments, that Audubon facility is a logistics advantage. We’ve seen a 3-day reduction in shipping times compared to West Coast suppliers. That’s not nothing when you’re scheduling OR time.

Addressing the Obvious Objection

I know what you’re thinking: “You’re just cherry-picking one metric. What about debt? What about revenue growth? What about customer satisfaction?”
You’re right. D&A isn’t a silver bullet. No single metric is. But my point is that it’s a consistently overlooked one. Most procurement teams evaluate price, quality, and delivery. Almost no one looks at asset investment. And that’s a gap.
In my experience, combining D&A trends with on-time delivery data and FDA compliance history gives you a surprisingly robust picture of a supplier’s stability. For a hospital or surgical center, where supply interruptions mean delayed surgeries and unhappy patients, that’s worth its weight in gold.
So no, I’m not saying D&A is the only thing that matters. I am saying that ignoring it is a mistake I’ve made—and won’t make again.

Bottom line: next time you’re evaluating a medical device supplier, ask for their financial report or look it up if they’re public. Spend 10 minutes on their depreciation and amortization section. It’s more honest than most sales pitches.
I’ve been caught off guard once by ignoring this. Never again.