Chris Newmarker

October 18, 2016

4 Min Read
What Volume to Value Means in Medtech

It's all about data and outcomes these days, top executives at Medtronic, IBM Watson, UnitedHealth Group, and Mayo Clinic said at AdvaMed on Tuesday. 

Chris Newmarker

Medtronic MiniMed 670G

Medtronic touts its new MiniMed 670G insulin pump as the world's first hybrid, closed-loop artificial pancreas--a device that provides value to healthcare because of the medical emergencies it is able to prevent. (Image courtesy of Medtronic)

When Medtronic scored a major win at UnitedHealth Group over insulin pumps, it was all about Medtronic using data to prove better outcomes, Medtronic CEO Omar Ishrak explained during a Tuesday breakfast panel at AdvaMed in Minneapolis. 

Much has been made in the media about Medtronic's sheer size enabling it to become the preferred, in-network durable medical equipment (DME) provider of insulin pumps at UnitedHealthcare. But as Ishrak described it, it was about using Medtronic's data as well as UnitedHealth's own data through its Optum health information subsidiary to prove that Medtronic's pumps could achieve better outcomes through better costs. 

"Not only does Optum have data but through UnitedHealth has a payment model that paid for certain medical models. ... We saw by using a pump we could getter better outcomes through better costs," Ishrak said. 

How did they do this? One way involved the nighttime hypoglycemia episodes that can send diabetes patients in the hospital emergency room. Medtronic--which has been a pioneer in "smart" insulin pumps that automatically address such episodes--could demonstrate that its pumps could greatly reduce such ER episodes, said Richard Migliori, MD, UnitedHealth Group's chief medical officer. 

It was but another example of what the panelists, which also included Mayo Clinic CEO John Noseworthy and IBM Watson Health general manager Deborah DiSanzo, described as the "volume to value" shift taking place in healthcare as countries across the world push for more efficient and effective management of patient populations. 

"It starts with the recognition of innovation, using technology to improve outcomes. That quest never goes away. ... A move to value is essential and critical to the future of healthcare, and certainly for the future of medtech," said Ishrak, who also said that all medical device companies need to get onboard. 

The move to value includes a number of important aspects:

1. It's About Outcomes

Understanding outcomes is critically important. If you don't have clinical and other data to back up your medical device and what it is able to accomplish, you're in trouble. Artificial intelligence such as IBM's Watson is playing an important role, helping to pinpoint data connections. For example, Watson was able to pinpoint signs in insulin pump data that a person using the pump is going to have a hypoglycemic event, according to DiSanzo. And Watson helps alert Mayo Clinic physicians to clinical trials that patients might be eligible for. "You will never hear anyone at IBM say cognitive technology is replacing human beings. This is augmented technology coming to help." 

2. It's About Partnerships

Medical device makers are forging much closer partnerships with health provider and health payers. It was noteworthy that all four people on the panel--big device, big health payer, big health provider, and big data--had worked with each other and forged partnerships. "No-one can do this alone--period," said Mayo Clinic's Noseworthy. 

3. It's Affecting the Playing Field

Big medical device companies such as Medtronic appear to have an advantage because of the resources they're able to throw around, but don't count out the young small companies. Said Noseworthy: "There are some advantages to being small and nimble. You don't have to ask for permission. You just ask for permission later on."

Migliori agreed that small companies have an advantage because there aren't people referring to the balance sheet and saying, "No." "Many of the ideas we've put to work have come from small companies."

Chris Newmarker is senior editor of Qmed. Follow him on Twitter at @newmarker.

Like what you're reading? Subscribe to our daily e-newsletter.

Sign up for the QMED & MD+DI Daily newsletter.

You May Also Like