Medtronic CEO Omar Ishrak has publicly voiced his desire to transform the world's pre-eminent medical device company into a medical technology solutions firm whereby hospitals can count more on the Minnesota firm as a partner than a vendor.
|Omar Ishrak, CEO, Medtronic|
That transformation has begun to take shape. In August, Medtronic announced that it has bought Cardiocom, a remote patient monitoring company to help heart failure patients continue to be monitored by healthcare professionals from afar. This move would allow Medtronic to play a greater role in the continuum of care taking them beyond the hospital walls.
But in a more striking manner, the company also announced the launch of a hospital solutions business where it will manage the cath labs of some hospitals in Europe with the goal of making them more efficient and sharing in those spoils. Medtronic is creating new business models under a new healthcare paradigm where hospitals, its customers, are rewarded for keeping people healthy and costs down.
St. Jude Medical CEO Daniel Starks doesn't appear to be too impressed.
|Daniel Starks, CEO, St. Jude Medical|
In a conference call Wednesday to discuss the company's third-quarter financial results, healthcare analyst Danielle Antalffy from Leerink Swann asked him to weigh in on his competitor moves, without naming Medtronic. Starks began by saying that he would not discuss future strategic actions that might tip off competing companies as to the direction St. Jude Medical is taking.
But then he said:
"In our minds, we could recast ourselves as any kind of company, I suppose," he said. "But the special role of a high-tech medical device company, which we continue to define ourselves as, is innovation, particularly anything we can do that would be disruptive innovation."
Starks then listed the disruptive innovations that St. Jude has invested in including the implantable CardioMEMS wireless communication system to alert of heart failure and the world's first leadless pacemaker Nanostim.
In his mind, these technologies address as well as focus on the needs of the current healthcare environment that values positive clinical outcomes and cost-effectiveness.
"That is our focus and that is what differentiates us from consulting services firms," Starks said.
It will be interesting to see how these different visions of adjusting to a new healthcare paradigm play out. Will squarely focusing on disruptive technological innovations in lieu of incremental innovation like St. Jude appears to want to bring riches? Or will creating a new business model and playing on a broader spectrum across the care continuum like Medtronic wants to do be the winning philosophy?
2014 sure will be interesting.
|Hear from Medtronic engineers about innovations in implantable devices at the MD&M Minneapolis Conference and Exposition, Oct. 28-30.|