Treating congestive heart failure patients is an expensive proposition for hospitals. It is a chronic disease that has only become more expensive now that Medicare is penalizing hospitals if heart failure patients are readmitted within 30 days of being discharged.
Two startups are taking radically different approaches to the disease. Chanhassen, Minnesota-based CardioCom is aiming to provide hospitals greater insight of the patient’s status after release by using a remote monitoring and telehealth solution. In August, Medtronic acquired the company for $200 million.
On the other hand there is Atlanta-based CardioMems, that has developed an implantable sensor that is able to monitor intracardiac pressure and alert physicians of any change, thereby preventing hospitalization. The promising solution is based on wireless sensing and communication technology for the human body. Medtronic’s in-state rival, St. Jude Medical invested $60 million in CardioMems in September as well got an exclusive option to buy the company for an additional $375 million if certain commercialization milestones are met.
Which approach - the telemedicine/remote monitoring or implantable sensing - will win with hospitals desperately looking to manage the congestive heart failure patient population?
The jury is out because CardioMems’s much-ballyhooed product hasn’t won FDA approval yet, though some believe that after initially rejecting it, FDA will bless the device soon.
But one Medtronic executive seemed to imply that CardioMems may not get much traction from hospitals in these lean times. Here’s Mike Coyle, Executive Vice President & Group President, Cardiac and Vascular Group at Medtronic, responding to an analyst’s question about Medtronic’s Cardiocom technology and CardioMems in the context of managing heart failure. The question came in the Q&A session with analysts last week when Medtronic reported fiscal second-quarter results.
I think it’s important to look at heart failure as both a short term and a long term issue. The short term issue is the 30-day rehospitalization challenge which all hospitals in the U.S. agree is something that is a big challenge for them to manage. That’s where the Cardiocom solution with basically a very fixed window of time in which the impact has been proven to be very effective.
The alternative that’s currently being looked at permanent implants (that) are a very expensive solution, which are really not the right answer for the short term challenge. The question would be “Are they the right solution for the long term challenge of heart failure management?”And in that case, clearly as [CEO] Omar just mentioned there are a lot of variables involved here. It’s not just the availability of the measurement from the device, but also the tracking of that data, the specificity and sensitivity of those data and the cost of managing that information. We think that it is a very expensive solution that is being looked at for the long term. We are really focused on focusing on that near-term window….
Earlier CEO Omar Ishrak opined that “Studies have shown that to move the needle on things like heart failure requires a broad set of services, a broad set of solutions that have to executed through multiple stakeholders.”
In other words, a single technological solution like CardioMems is not going to solve the problem.
This is classic dissing in business-speak of course, but it also underscores a real divergent vision and strategy that these two Minnesota stalwarts of the medical device industry appear to be pursuing.
Medtronic seems to want to move along the healthcare spectrum and provide more than just therapies and technological advances. It wants to recast itself as a partner to hospitals through an increased focus on services.
St. Jude Medical, whose CEO seemingly pooh poohed this approach, wants to win the future by technological means.
Once, Obamacare takes hold, it will be interesting to see whether this will be a zero-sum game.
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