By Andrew Wilson, Insight Director, Kadence
The MedTech industry has spent a year and a half living with the medical device excise tax and that time has done little to clear up uncertainty. Fewer MedTech executives today have a good sense for whether the promised influx of patients resulting from the Affordable Care Act will ultimately generate enough revenue to offset the tax. While we don’t have clarity on the tax yet, it remains painfully obvious when we look at the state of the current U.S. healthcare industry that this tax revenue alone isn’t enough; rising costs must be addressed in a meaningful way.
“If we can empower people to be more informed and engaged in their care decisions, they will be the driving force behind improving the efficiency and effectiveness of the healthcare system.”
Innovation to develop products, services, and systems that are more effective and efficient is critical to solving the healthcare cost problem. While the majority of MedTech organizations have historically focused their sales and service efforts on their relationship with physicians, they’re shifting their focus as they look to the future. In Kadence’s 2014 MedTech. Innovation Pulse we recently found that MedTech organizations will focus just as much of their future innovation efforts on patients as they do on physicians.
Because patients ultimately have the final say in lifestyle decisions like diet, exercise, when to seek treatment, and disease management, they have an enormous influence on the cost and the effectiveness of their own care.
Organizations that can develop products and services that help patients make better decisions will win in the future. Many of the most costly diseases are chronic (e.g., diabetes, heart disease, cancer) and require complex treatment plans that include medication regimens, clinical interventions, and meaningful lifestyle changes. Managing a disease correctly can save the healthcare system financially, but more importantly it translates to higher quality longer lives. For example, imagine a heart disease patient with a pacemaker that provides them with information in real time through a smart phone app helping him become more conscious of decisions about sleep, diet, and exercise. At the same time this pacemaker can communicate vital information to the patient’s cardiologist who can customize the treatment plan with rich information about what’s working and what isn’t. Perhaps most intriguing is the potential to use rich data captured through these innovations to learn about treatment effectiveness. These types of patient empowering innovations have the potential to dramatically change healthcare in the U.S. (and worldwide). And MedTech companies have the opportunity to drive this change; however it will require a shift in how they have traditionally learned about their markets.
As MedTech companies race to innovate, they will likely hold internal brainstorming sessions, meet with physician advisory boards, and speak to their sales and customer service groups. While important, the problem with these approaches is that they leave out the most critical component the patient, the key to successful innovation. To generate this intimate knowledge of patients, organizations need a plan to focus their innovation. One that
MedTech companies face a future of both great uncertainty and opportunity; however it is clear that in the context of the Affordable Care Act and the evolving nature of today’s care model, patients are going to become increasingly important. MedTech companies will need healthcare consumer insight programs to uncover the wants and needs of their patients and discover the addressable white space. Their intimate understanding of patients will enable them to pull ahead and gain a decided competitive advantage. The winners aren’t going to be those who bring solutions to market first, but instead those who can translate deep patient insight into game changing products and services.