the top 10 technology and business model changes poised to disrupt the medical technology industry
TRANSCRIPT
The Top 10 Technology and Business Model
Changes Poised to Disrupt the Medical
Technology Industry
February 2014
Presented at MD&M West 2014
Venkat Rajan
Frost & Sullivan Analyst Team Provides Broad,
Cross Industry Coverage
• Leveraging insights into the present and future of industry convergence
• Built on a foundation of market, competitive, and technology analysis
• Supporting our clients to see the future of their industry through the lens of global shifts
Life Sciences
Advanced Med Tech
Connected Health
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Frost & Sullivan’s Complete Growth Lifecycle Partnership Research, Ideation, Strategy, and Implementation Expertise
But taking action on the
opportunities is significantly
more complex, requiring
organizational alignment,
a cohesive strategy, and
ownership for the plan.
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Pivot Point:
Turning
insights
into action
Understanding the universe
of opportunities and
prioritizing them by size, fit,
risk, and other factors is a
required starting point for any
growth project.
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How Well Do You Know the Affordable Care Act (ACA):
Opportunity Impact Dashboard
Home Care Pharma Wellness
Services
Inpatient
Care
Outpatient
Care
Primary
Care
Ambulatory
Care
HCIT Imaging
Diagnostics
Reimburse-
ment
$ $ $ Govt. &
Industry
Payors
Providers
Medical
Device
Supply
Chain
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The Market You Knew is Eroding
Eroding Customer Value Proposition
Profit Model Under Pressure
• Business exposed to technology obsolescence due to new advances
• New technologies capable of providing comparative product/service value
either cheaper, faster, simpler, or to a broader addressable customer base
• Customers view its product/services as commoditized
• Customers see limited differentiation between available devices
• Diminished customer enthusiasm for new product upgrades
• Declining YOY margins.
• Competitors going out of business, consolidating, and exiting market.
• Significant internal cost cutting necessary to maintain viability.
Market Disruptors on the Horizon
• High employee turnover rates due to career apathy
• Strategy focused on maintenance as opposed to expansion
• Team slow to adapt and/or innovate
Internal Infrastructure Deteriorating
• Limited VC/investment buzz for market and its future
• Limited academic curiosity and interest in advancement
• Public companies struggling to maintain stock price
Investment Dollars Flowing in
Opposite Direction
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Recent History Current Future
Medical Devices — Business Outlook
$150 Billion $340 Billion $500 Billion
How to diagnose?
How to treat? Minimally invasive
Devices as the first line of
treatment, devices
to prevent, improve well being.
Technologies geared
towards extending life.
Technology to improve
outcomes (mitigate risk).
Integrated platforms to provide
comprehensive continuum of
care. Focus on quality of life.
Companies that advanced
standard of care.
Winners: Big Imaging
Companies that could make
treatments safer and easier
to perform.
Winners: Cardio, Ortho, Surgery
Companies that understand
consumer behavior, needs, and
pain points.
Winners: ?Apple, Google?
Source: Frost & Sullivan
TYPES OF
COMPANIES
WHO EXCELLED
MARKET
DYNAMICS
MAIN FOCUS
REVENUE
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Top 10 Disruptors in Med Tech
• Portability, versatility over specialization Mobility
• Remote systems for analysis and computation Cloud in HC
• Analytics to make better and quicker decisions Big Data in HC
• New care setting, new devices, new payment model Aging in Place
• Moving beyond repair and replace Regenerative
• Novel manufacturing solutions for device testing, development, and customization 3D Printing
• Reduce supply costs Private Labeling
• Consumer as the influencer (financial decisions, satisfaction scores, etc.) Consumer Power
• Cutting the waste (care delivery, care coordination, administrative excess, redundancy) Optimizing Delivery
• Cutting the costs in the supply chain (price transparency, direct purchasing, etc.) E-Commerce
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Optimization of Operations
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Creating Value in the System
…Opportunities for Competitive Positioning
• Competitive differentiation
• Maintain relationships
• Generate new revenue
• Support price strategy
• Identify new customer needs and opportunities
• Others…
Customers Needs…
• Supporting a value-based purchasing
strategy
• Shifting procedures to outpatient settings
• Reducing hospital-acquired infections
(HAIs)
• Reducing readmissions
• Reducing unnecessary spend
• Others…
Costs/ Risk
Data/ Information
Efficiency
Outcomes
Time Savings
Satisfaction/ Experience
Service
Patient Empowerment
Patients
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Consumers Believe mHealth Will Improve Convenience,
Quality, and Cost
Source: The Economist Intelligence Unit (2012 ) and PWC: Emerging mHealth: Paths for Growth (2013) and Frost & Sullivan
Surveys of consumers show an increasing interest and enthusiasm for using mobile devices to
engage with healthcare providers
In the next three years, patients agree that…
52% 48% 46%
mHealth
applications /
services will
make
healthcare
substantially
more
convenient
for me
mHealth
applications /
services will
improve the
quality of
healthcare I
receive
mHealth
applications /
services will
substantially
reduce my
overall
healthcare
costs
Top drivers for patients to begin using or
increase using mHealth -
Ability to access by my
healthcare providers more
conveniently/effectively
Ability to reduce my own
healthcare costs
Ability to take greater control of
my health
Ability to obtain information that
is difficult or impossible for me to
obtain from other sources
Ability to access better
quality healthcare
46%
43%
32%
28%
25%
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Next Steps for mHealth
Adoption
• Personal devices
• Professional solutions
Regulation
FDA guidance finally released
Impact to date on funding
Business model success
Waiting for reimbursement?
Will ACOs be the tipping point?
Sustainable consumer models?
Value
Clinical efficacy still unproven?
Long-term value to individuals?
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Cloud Solutions are Aligned with Healthcare Shifts
Source: Frost & Sullivan analysis
Big Data Mobility
Cloud Social
Media
Cloud allows scale in storing big data
Collaboration in research means moving partners to the data
Care collaboration and transitions in care require flexible access and merged data sets
Cloud is a key enabler of mobilizing data for use by consumers and enterprise users Point of Care Patient Lab
Genomics
Care Coordination
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Opportunities to Leverage Big Data
Source: Frost & Sullivan
Clinical Decision
Support (Accelerate
dissemination of
research findings)
Individualization of
Treatment and
Interaction
Comparative
Effectiveness and
Outcomes Research
Clinical Trial Design
Micro segmentation
of Cohorts and
Consumers
Direct-to-Consumer
Analytics
New Data Sets, New Tools, New Business Models
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Consumerization
Behavioral economics
“We have not been able to accelerate
to that next level of providing that
customer experience that people
come to expect when interfacing with
a hotel or other industry”
Quantified self
Increased
individual financial
responsibility
Social networks and online health resources
Source: Frost & Sullivan
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What are Consumers Looking for from Healthcare
Engagement?
• Breaking down “bricks and
mortar” approach to healthcare
• 24/7 access to personal health
information via web portal
• Ability to communicate with
providers via e-mail
• Test results and other data
delivered via mobile devices
• Online scheduling and bill pay
• E-visits
Convenience Engagement Personalization
• Preference-based care
vs. evidence-based
care
• Customized approach
to communication
• “Respect my wishes for
privacy and security”
• Clear explanations of condition
• Content to help patients
understand health status
• Shared decision making
• “In the loop” — treat patient
like a member of the
healthcare team
• “I want all my information in
one place so my community
has access.”
Source: Frost & Sullivan
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Interoperability Platform
Oximeter
Infusion
Pumps Monitors
Electronic
Medical
Record Workstation
Medication
Station
Smart phone
or tablet
Other Diagnostic
Devices or
Biometric Sensors
Point-to point connectivity enables standardized electronic records, remote healthcare and
diagnostics, remote clinical care, electronic medical records, and mobile healthcare.
MEDICAL
DEVICE
CONNECTIVITY
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Key Configuration Considerations
Categorizing Devices
System Deployment
Patient association is critical to effective implementation of connectivity solutions.
Initiation can either be patient centric or location centric. Ensuring tracking across
the workflow and proper patient disassociation is of equal importance.
Categorization of devices based on use and data transmission. Episodic devices obtain a single set of measurements at a fixed time. Continuous tracking devices are continuously capturing data and device performance information; some are stand alone while others can transmit across an enterprise network.
Deployment is tied to how the device fits in the clinical workflow. Does it require
a point of care component, or is central station monitoring sufficient?
Patient Association
Synchronized time stamping, security from malware, downtime protocols, and
integration of data with an EMR are among the most challenging issues to
adoption of interoperability systems.
Data Validation and Security
Protocols for change management as devices get replaced or upgraded are
important to factor into the network, and consider contingencies of how changes to
one might affect another. It requires coordination from both institutions and OEMs.
Change Management
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Technologies Changing Healthcare
Patient Satisfaction
Smart
Tracking
Technologies
Dedicated
Information
Management
Sterilization
Automated Point
of Care Testing
3-D Printing —
Prototyping/Manufacturing
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Technologies Changing Healthcare (continued)
Operational Efficiency
Cognitive
Computing
Device
Connectivity
Platforms
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Technologies Changing Healthcare (continued)
E-commerce Platforms
Devices as
SaaS Platform
3-D Printing — Individually
Customized Medical Devices
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Contact Details
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United States
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