From home healthcare taking some baby steps to retailers driving telemedicine, there is change on the way next year, say experts at Frost & Sullivan and the design firm Nottingham Spirk.

Brian Buntz

While 2016 will see the election of a new president, the trends that categorize the year are likely to be outgrowths of existing movements in healthcare, but by no means does that mean that 2016 will hold more of the same. Qmed spoke with Venkat Rajan, industry manager, medical devices at Frost & Sullivan and designers at Nottingham Spirk to come up with these six predictions for medtech next year:

1. Survival of the Fittest for Home Healthcare Companies

Home healthcare seems to be one of the trends that everyone in the industry talks about and for good reason. A national survey conducted by Harris Poll on behalf of Nottingham Spirk in fall 2015 showed chronic health conditions--such as diabetes, arthritis, and hypertension--as one of the top drivers of the consumer medical product market's rapid growth. This is truly a new era for in-home medical products, with analysts at IHS expecting the global market for consumer medical devices to exceed $10 billion by 2017.

Still, these are still early days yet for the home healthcare technology field, and some of the companies active in the niche have yet to identify a winning approach for their technology. "There is a lot of movement and a lot of new pilots, but the model hasn't really gained traction yet," Rajan says, who expects to see a Darwinian-like thinning of the playing field. "We will start to see some of the more ideal approaches gaining traction," Rajan says.

As for which home-healthcare approaches will likely fail, Rajan believes that non-technological hurdles are challenging for some companies in the field. "The ones that are failing are ones that maybe don't have the right partner or maybe they have a user interface that is hard to use. Or their technology collects the right data but they have trouble getting people to look at it," he says. "I think those nuances are going to be what determines the model that gains traction more than the technology behind it."

2. Retailers Driving Telemedicine Forward

As early as 1964, NASA had telemedicine capabilities; however, the potential of remotely cooperative medicine has remained more of an abstract possibility than a reality until recently. Expect retailers like Walgreens, CVS, and Walmart to help propel telemedicine forward in 2016.

Many of the pharmacies in these stores have already begun offering telehealth consultations with board-certified doctors. RiteAid has begun piloting the use of HealthSpot kiosks, which enable patients to interact with doctors remotely in a manner that mirrors an actual visit for minor complaints. The booth gives patients access to a stethoscope, blood pressure cuff, and so forth, giving patients the ability to monitor their vital signs with a doctor's remote supervision. The HealthSpot kiosks, which are manufactured in the United States, will drive opportunities across all types of manufacturing from printed electronics to fluid management and on-the-spot diagnostics, according to the design team at Nottingham Spirk.

3. A Ground-Up Approach to Serving Needs of Emerging Markets

It's nothing new that major medical device companies are seeking to stave off slowing growth in their traditional markets by expanding their business in emerging markets like China. But their approach in doing so is changing, says Rajan, who expects such companies to ramp up product development for entirely new product types to meet the unique needs of healthcare in countries like China, India, or Kenya.

Remote clinics in these countries (which are often relatively low-tech affairs--in some cases, clinics are air-conditioned shipping containers) are making extensive use of smartphone- and tablet-based diagnostics. Such clinics can share the resulting data with hospitals to help triage patients, identifying which are sickest. "I think there is potential with cloud computing, devices that could allow for innovative ways to provide testing," Rajan says. "The approaches that take hold in the developing world might be different than the ones that take hold here. You might have to develop it from ground up."

This would represent a considerable shift in thinking for major medical device companies, which have long noticed the importance of emerging markets to their future business but have sometimes struggled to meet their specific needs. "Big medical device companies would sometimes take their technology that they sold in the United States or Europe and cut the price by 20% and try to sell it in emerging markets," Rajan says. Oftentimes, that approach didn't work as well as they would have hoped. 

4. Demand Will Grow for U.S. to Get More for Its Healthcare Dollars

It seems we are constantly being reminded that the United States spends on healthcare more than any other developed nation--more than $9000 per person per year. More disturbing is that the country is not getting a good deal for the money--outcomes in the United States lag behind countries than spend considerably less money.

Rajan, however, sees the rate of increase in U.S. healthcare spending slowing. "We are seeing a leveling off of healthcare spending in the US. It will continue to climb, but we are seeing a stemming of that acceleration," Rajan says. "There is not anything immediately on the horizon that will drastically alter the course of that."

There will be, however, an increased demand to cut down on wasted spending--things like misdiagnosed conditions and unnecessary testing or procedures. "According to CMS, the hospital procedure they spent the most one was sepsis patients," Rajan notes. Each year, sepsis in the United States is linked to $20 billion in spending and 200,000 deaths. CMS, however, has targeted improving how sepsis is treated as a key priority, outlining a plan to improve early diagnosis of the condition as well as improving its treatment.

Medical device companies would be well served to adopt their business models to align with this waste-reduction trend that also prioritizes evidence-based care and priority quality over quantity.

5. Amidst Commoditization Worries, Medtech Firms Launch New Services

"There are not many industries in which the entire business model changes, but that is exactly what is happening in healthcare with the change from fee-for-service to outcomes-based or values-based reimbursement," Rajan says."If you think about it, a lot of what gets paid for already has a component of value-based care included in it." We're on track to see a CMS shift in 2016 and a more dramatic shift in 2018 to be more aligned with outcomes-based disease-management. "We seem to be moving to a true population-health-based model," Rajan says.

"Device companies are worried that their product may become commoditized," Rajan notes. As a result, many are rethinking how they could bundle services with their products and are drafting risk-based sharing contracts they could establish with hospitals. Philips even recently debuted a subscription model for its app-based ultrasound.

"Medical device companies want to be seen not as a retailer to the hospital but as solutions partners." The goals of medical device companies will be more closely aligned with those of hospitals, which, incidentally, are not just thinking about getting procedures done but about matters such as preventing infections, reducing procedure times, patient comfort, and patient satisfaction.

6. A Voltron-Approach to Innovation

Since the introduction of the drug-eluting stent, the medical device industry has struggled to identity another blockbuster medical device. And even the profit margins for drug-eluting stents began to fall not long after their introduction, convincing former stent innovator Johnson & Johnson to exit the market by 2011.

Other recent promises of the "next big thing" in medtech have also fallen flat. Take the case of renal-denervation, which not long ago, was thought to be a billion-dollar business. Perhaps renal denervation is not dead yet, but it may end up as more of a niche technology than a blockbuster one.

Silicon Valley-unicorn Theranos may possibly be another cautionary tale of the sheer difficulties of a single technology disrupting healthcare. Previously valued at more than $9 billion, the firm has attracted considerable skepticism and after a series of exposés by the Wall Street Journal. "They are facing the blowback of trying to move at the pace of Silicon Valley in healthcare," Rajan says.

Perhaps 2016 will be the year when the medical device industry takes a more of a Voltron-like approach, where individual technologies joined together prove to be more effective than the proverbial sum of their parts. "It is not about which device you use but the entirety of the process," Rajan says. "Ideally everything is working together and your devices are interoperable. One device might work great for its given indication, but if it doesn't work with the EMR system, it can create a lot of inefficiency."

Still, the healthcare industry is poised for an Uber-style disruption, but accomplishing such a breakthrough in healthcare can be nearly impossible for a single firm to pull off.

Perhaps the disruption will be triggered by the increasing overlap of connectivity and analytics into healthcare. "The biggest problems in healthcare aren't going to be solved by a new MRI machine," Rajan says. Instead, they could be solved by the application of computing technologies that are taking hold in different industries in other forms. "In healthcare, decision-support artificial intelligence is one example of a technology that could help drive value in healthcare both inside and outside of the hospital," Rajan notes. "An analytics and connectivity have not been competencies for a lot of the traditional medical device companies."

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