Value-based healthcare greatly depends on improving patient outcomes at lower cost, and the ability of healthcare providers to impact quality of care measures, such as reducing hospital readmissions or improving preventative care.
Medtech companies need to go beyond providing medical devices and products to their customers in order to remain successful and retain customers long-term. Healthcare providers no longer just need devices: they want comprehensive and connected systems that help them provide integrated care.
We spoke with several leaders in the medtech space to better gauge how companies are adapting to changes taking place in the healthcare sector, and what must be done to ensure patient-centric care remains a top priority. Adjusting their business model will help medtech companies find ways to stay profitable in the push toward value-based care as provider needs change.
More medtech companies are entering into offering healthcare services and digital health products, which has further strengthened the need for companies to consider how they handle internal buy-in and manage bureaucracy to keep up-to speed with the fast development in the area of Services and Digital Health Solutions, explained Satschin Bansal, Zimmer Biomet Senior Director, BU Lead Services & Digital Health EMEA/Asia-Pac. An internal culture change will be required in the changing healthcare environment, Bansal added. A traditional sales representative that sells just implants, for example, may feel threatened with the shift in priorities.
“You really need top down support,” he said. “We’ve had that since the beginning. Our new EMEA President has a background in Solution selling and Digital Health which is clear indication where the future opportunities lie in medtech.”
“Companies that really embrace this change from selling metal or plastic to selling innovation and services will find success,” Bansal continued. “You need to look beyond the obvious.”
The shift toward value-based care has also impacted the way that medtech companies should consider risk, according to Sarah Fisher, Senior Director, Global External Innovation, Johnson & Johnson.
“Regarding our ability to look at things that are digital in value-based care, we’ve shifted to looking at risk models with providers and provider networks to remove the burden of outcomes beyond initial surgical outcomes,” Fisher said.
For Johnson & Johnson, the company portfolio is focused on surgery, she added. That includes what happens before, during, and after surgery.
“When we look at value-based outcomes and at-risk models, we’re not doing large systems integration efforts or brick and mortar managed services offerings,” Fisher explained. “We’re not taking over infrastructure – that’s not core to Johnson & Johnson in the medical device space.”
“We’re looking at how to get efficiencies, more insights from data, improve outcomes of surgery, and monitor patients when surgical procedures are over to make sure they’re getting the rehab they need,” she continued. “We want to know how to identify patients before a major event to bring them in for preventative measures.”
When a company has done a number of experiments it can start to refine that and say what it has learned from that experience. A company can take various point of care devices or pilot programs in different markets around the world and bring that intelligence together to define where it thinks it should play worldwide.
That’s where Johnson & Johnson is at now, Fisher said.
“We’re looking at ways to revamp ownership of the supply chain, and are looking for partners to help us improve operational efforts so that we can focus on the science and clinical pieces where we excel,” she stated.
However, it is important to not look at your competition, Fisher maintained. Asset-based companies like Johnson & Johnson have typically been focused on who has the best product. It is really only worth paying attention if something can be learned from a competitor.
“We really need to buy into this idea fully that the focus does have to be on the end user 100% of the time,” she said. “That can be a provider institution, it can be a patient, etc., but monitoring competition for me is much less important than a laser focus on whether we are bringing value to the end user.”
Considering risk and adjusting the sales approach
The move to consolidate the procurement process is one of the key drivers to why Boston Scientific is looking to provide more value-based services, said Gil Rabbie Senior Manager, Global Healthcare Solutions at Boston Scientific.
“It’s not every day you come up with the next pacemaker or groundbreaking new therapy,” Rabbie said. “Those will happen once in a while, but generally innovation is incremental. Not every healthcare system around the world recognises the value of some of these innovations and is prepared to pay a premium for it. We need alternative models.”
“Intersecting with that is this consolidated procurement and price-pressure, which makes it harder to have a discussion about additional value-adds unless a customer is prepared to consider their total cost improvement opportunity, as opposed to just having a narrow focus on unit price reduction,” he continued. “Boston Scientific has always been innovative and will continue to be, but we need to think about other avenues to support the business and its customers with where their real challenges are.”
It’s important to consider the entire supporting infrastructure of hospitals and healthcare systems, Rabbie explained.
Boston Scientific has built a capability that supports hospitals to grow their services, which takes it beyond the device and wrap-around support to new models of enabling its customers to be successful. For example, the company is helping some customers with targeted programs that increase access to a new therapy and therefore subsequent time to treatment.
“[Healthcare is] evolving. We’re testing the market and learning as we go,” he said. “There’s a lot to be said for understanding how to be a bigger player in healthcare than just a supplier of devices. At the end of the day, no one player will do everything, but if we’re all more interconnected we can help healthcare prosper and deliver better results for healthcare and for patients. That’s the goal.”
Medtech companies are also in agreement that the sales approach itself will also need to change.
Johnson & Johnson has customer engagement around a very specific offering, Fisher explained.
“We know how to sell what we have in our sales bag today,” she said. “When you ask our same team to start to speak about selling services and solutions, it’s a different conversation and one that we’re not used to. We need to train our commercial salesforce to understand the new way of selling these new offerings.”
With the shift that’s occurring, successful companies must realize how to market and sell their products with outcomes in mind, explained Michael Brown, VP National Healthcare Systems at Agfa HealthCare.
“There may not be a technological change in a product – it may be the same product – but the conversation needs to change away from price and into outcomes,” he said. “How is our product different relative to patient safety, patient satisfaction, operational improvement, improved diagnosis, and the customer’s ability to meet their objective?”
Considering the entire patient experience will be essential for medtech companies in the coming years. Finding ways to adjust their business mindset and approach will help companies evolve and incorporate aspects of value-based care.
Stay tuned for Part 2 of our discussion on value-based care in the medtech space, where we delve further into patient-centric care and the need to implement tools/training to prioritize patients.