It seems many medtech companies are still struggling with the concept of a shift toward value-based care, so we asked an expert for insight on tackling the challenge.
There's little doubt that a shift in business models from fee-for-service to value-based care is coming to the medical device industry—or rather, is already here. We need only look to recent headlines—Medtronic and Boston Scientific are two major companies that have begun to align themselves more closely with hospitals and patient outcomes—to see evidence of this.
Yet for all the discussion about the topic, it seems many medtech companies are still struggling with the concept.
We caught up with Pete Mooney, managing director for the Global Life Sciences and Health Care Industry Group at Deloitte Touche Tohmatsu Ltd., at the FT US Healthcare and Life Sciences Conference in New York City on May 6. We asked him to give us his advice for medical device companies looking to compete effectively in a value-based care economy.
Mooney points out that device makers need to be keenly aware that their products could be disrupted by innovations appearing on the horizon now. He notes that technologies that once seemed futuristic, like 3-D printing and additive manufacturing, are poised to impact the industry.
"If I can print catheters now as opposed to hold all the inventory of 50, 60 different kinds of catheters that I have to have, now all I have to have is a bunch of goop, and I print them out when I need them . . . I think some of those things can be really transformational. And it's coming along . . . much more quickly than I thought."
He adds that while a stent maker may be focused on incremental improvements in stents, "the real issue for these guys may be somebody might be out there growing arteries." He urges device companies to "start worrying about where you're going to get disrupted, and start figuring out how you want to play against some of those businesses."
Secondly, he says companies need to realize that the bottom line is medical outcomes:
"It's all about medical outcomes these days, and demonstrating value. So if you're still thinking about it as—I sell a product—you're kind of a dinosaur. You need to be thinking about medical outcomes and the value proposition you're putting to payers and providers and patients. If you're not doing that, you know, you've got a problem."
As a result of the focus on disruptive technologies and the need to prove value through patient outcomes, Mooney believes convergence will continue to be a strong trend in the industry.
". . . there's a lot of convergence going on. If I start to think about outcomes, it's not just about the pill or the product that I'm producing. It's about the whole cycle of care that has to go into it. That could be drugs, it could be devices, it could be care management, a whole bunch of things that would wrap into that package."
|Stay on top of the latest trends in medtech by attending the MD&M East Conference, June 9–11, 2015, in New York City.|
[Images courtesy of RENJITH KRISHNAN/FREEDIGITALPHOTOS.NET and DELOITTE]