I don't know if we're going to have a double-dip recession, but the lack of jobs -- and therefore employer-provided health insurance -- seems to be hurting some medical device companies.

Johnson & Johnson (NYSE: JNJ) blamed its slow growth in third-quarter medical-device sales on patients delaying elective procedures, and Intuitive Surgical (Nasdaq: ISRG) seems to be experiencing the same issue.


January-March 2010

April-June 2010

July-September 2010

da Vinci Systems Sold 104 108 105
Year-Over-Year Increase in da Vinci System Sales 58% 42% 22%
Year-Over-Year Increase in Procedures 37% 36% 33%

Source: Company conference calls.

The slowdown in systems sales growth is somewhat misleading, because the first quarter of 2009 was the low point after sales came crashing down during the credit crunch. Systems sales reaccelerated throughout 2009 but have been relatively flat this year, and Intuitive Surgical has yet to match the 110 da Vinci systems sold in the fourth quarter of 2009.

As for the number of procedures, the decrease, albeit quite slight, is a little more troubling because Intuitive Surgical sells instruments and accessories used in the procedures. That category made up 37% of third-quarter revenue and has become a growing part of the revenue base. No growth there would result in a slowdown of revenue growth; it's as simple as that.

Of course, if the issue really is just delaying elective procedures, that may not be a problem for long-term investors; most surgeries can't be delayed forever. And Boston Scientific (NYSE: BSX) and Stryker (NYSE: SYK) are both up today after reporting better-than-expected quarters, so not every medical device company is hurting these days.

Management is guiding for a 35% increase in procedures for the entire year, so it seems to have confidence that the downward trend may be ending sooner rather than later.

On the Motley Fool Rule Breakers discussion boards, subscriber Sarah Goddard had some good advice about the price crash today. "Time to buy or sleep through the pain -- whichever one has the time or cash for."

Find out why Intuitive Surgical has been recommended four times by the Rule Breakers newsletter team. With a free trial for 30 days, get the latest issue as well as access to the archives and our exclusive discussion board.

Stryker is a Motley Fool Inside Value recommendation. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor choice. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of Johnson & Johnson and has a disclosure policy.