From advanced tumor detectors to artificial joints to remote surgeries, the medical device industry is at the cutting edge of innovation, research, and development. Not surprisingly, the industry’s global market size is pegged to be $455 billion currently and proposed to grow to $657 billion by 2028.
While the outlook for the medical device companies appears favorable, rising healthcare costs, new and increasing competition, and a highly commoditized market are challenges they have to tackle.
To be successful, medical device companies need to go beyond device manufacturing and selling into the evolving value chain and help solve the challenges that the healthcare industry is facing.
Deliver value beyond devices
As Peter Sondergaard of Gartner said, “Information is the new oil, and analytics is the combustion engine.” To stay profitable, Medical device vendors (MDVs) should participate in offering value-added services. Analytics can play a crucial role in boosting the value of medical devices and the data they create, providing a wide range of benefits to providers, patients, and the MDVs themselves. How? Medical devices, particularly remote monitoring devices, generate vast amounts of data. This data, which includes the patients’ clinical information and the device operational information, is then analyzed using analytics applications to obtain actionable insights.
Such information can make a meaningful difference in patient care and help improve the efficiency and operations of the medical device itself.
Care driven by insight
It’s fascinating to learn how one of our customers, a Fortune 100 Medtech company, derived value from such analytical insights. Sensing the need to improve the efficacy of their remote healing device, and to increase its utilization, the customer integrated an analytics application to examine the vast amounts of data their device was generating.
The insights obtained were then used to alter treatment modalities and detect disease patterns before they got worse. In addition, the data also provided important information related to the device and device usability. It prompted critical decisions related to product design and functionality, such as reducing the device’s weight and moving from Bluetooth to a 4G enabled network for real-time transmission.
Another important business benefit was to use the improved efficacy and recovery rates to renegotiate a risk-sharing payment model with the payer. This would not have been possible had the customer limited themselves only to selling devices.
We have seen some big mergers in the healthcare industry between payers, retail pharma companies, and large health systems in recent times. Also, we have witnessed the entry of the tech giants capable of changing the entire landscape of the Medtech industry. On the other hand, payment models are undergoing significant changes with value-based pricing, bundled payments, and risk-sharing models that will soon become the norm for medical device companies.
With increasing competition and the cost pressure, medical device companies will need to look beyond devices to continue playing a pivotal role in the healthcare ecosystem. It could prove to be a challenging task ahead, as the skills required for such value-added services will be considerably different. Therefore, partnering with a technology company could go a long way. HealthAsyst offers technical expertise for integration with medical device systems and advanced analytics. Please write to firstname.lastname@example.org if you wish to find out more.