A design expert offers insights on the market forces shaping the medical device industry, and the reason "design thinking" is more important than ever.

Sony Salzman

The healthcare industry is changing rapidly in the wake of the Affordable Care Act, and the medical device industry is changing along with it. Shifting reimbursement models mean that it's not good enough for a company to sell a great device. Today, medical device companies are increasingly encouraged to offer additional wraparound hardware and software designed to improve quality of life for patients. 

This new market pressure means that thoughtful product design is more important than ever. Scott Nelson, CEO/CTO of Reuleaux Technology, spoke with MD+DI about how hardware and software design is taking on new significance in the medical device industry as a whole.

"It used to be that you had to engineer a device that worked," said Nelson. Now, because hospitals are reimbursed based on outcomes rather than surgical procedures, healthcare providers are demanding that device companies also design solutions that encourage behavior change, he said.

For example, hospitals are no longer reimbursed solely for a successful knee replacement surgery. Rather, reimbursement is based on whether that patient actually regains mobility during the weeks and months after surgery. To capture that information, medical device companies are increasingly offering monitors and mobile apps that sync with their medical devices.

As medical device companies explore these new offerings and challenges, the concept of "design thinking" takes on new significance, Nelson said. Broadly speaking, design thinking is a research and development process used by designers to ensure the end result will actually solve the right problems with a user-friendly interface.

The medical device industry has an opportunity to borrow from the massively popular wearable monitors in consumer health, and integrate them with clinical devices for remote patient monitoring. Yet it's not as easy as it sounds. As healthcare becomes more "consumerized," patients are increasingly demanding medical technology that's just as sleek and simple as an iPhone. It's not enough to merely create a mobile app; companies need to offer an app that is actually useful and intuitive for the increasingly tech-savvy patient demographic.

"One of the key principles of add-on software is usability," Nelson said. "Consumers have very high expectations because of the extraordinary work done in Silicon Valley."

Yet another challenge is replicating the ease of use seen in consumer devices while maintaining data privacy and HIPAA-compliance. These security measures are expensive but necessary, Nelson said. To relieve the design burden, some companies opt to work with outside software vendors with a proven track record of data security.

Because these consumerized wearables and apps are new territory in the medical device industry, the business model for these expanding product portfolios is still evolving. Some companies are designing these products and solutions in-house. Others are partnering with consumer firms such as Apple, Fitbit, or Under Armour. Bigger companies are acquiring smaller companies with products or apps that successfully engage patients and encourage behavior change.

"There is no right answer," Nelson said. Whether companies "make it or buy it," almost all companies will need to expand capabilities in the context of design, he said. In the years to come, the need for thoughtful product design will spur the flurry of M&A, acquisitions, and partnerships that are already taking place in the medical device industry, Nelson predicted.

The consumer health industry will continue to converge with the medical device industry as healthcare's new reimbursement model increasingly emphasizes personalized care and outcomes-based payment, Nelson said. Device companies are increasingly turning to Silicon Valley for inspiration, because the tech industry has the ability to predict a customer's needs and ensure the product solves the right problems.

"Designers are very good at identifying friction," Nelson said. They watch people use instruments, and they notice any time an operator does something that's not core to the device's function, he said. "That's a point of friction." Steve Jobs was a "classic design guy," able to predict and eliminate friction before his customers ever identified a problem, Nelson said.

As medical device companies navigate the shifting healthcare landscape, the first step is for executives to "believe in and understand the value of design thinking in their process, Nelson said.

"A lot of companies are very engineering driven, with a tendency to say that how well a device works is the most important thing," he said. But in a new healthcare environment, ease-of-use and measurable outcomes are paramount.

"Engineers make things work, designers make things matter," said Nelson.

Sony Salzman is a freelance reporter covering healthcare, innovation, science, and technology.

[Images courtesy of DURON123/FREEDIGITALPHOTOS.NET and SCOTT NELSON]