As payors and providers build their enterprises around digital tools, the very nature of the medtech business is changing substantially.
According to new research from Frost & Sullivan, medtech vendors are rethinking what they do as hospitals move from high-acuity and high-dependency care to decentralized models. These vendors, in turn, are beginning to rely on capabilities like AI to help them meet the demands of today’s digital healthcare environment.
Frost & Sullivan concluded that new value-added models such as managing disease through remote patient monitoring and connected care will generate revenues of $171.65 billion by 2024, representing a compound annual growth rate of 14.3%.
In response to the emergence of these technologies, it asserts, medtech players need to employ different strategies and different goals than their elders. “Medtech companies’ business models no longer aim to sell products with superior features addressing clinicians’ needs,” according to Srinath Venkatasubramanian, healthcare & life sciences industry analyst. “These models focus on saving the cost of care for payers, improving outcomes for patients and enabling operational or workflow efficiencies for providers.”
A shift away from meeting the needs of clinicians sounds a bit ominous, but more on this later.
According to Venkatasubramanian, medtech companies can seize the moment by leveraging the following strategies:
- Supporting care delivery beyond the hospital setting: By offering solutions such as remote patient engagement, medical telemetry and telehealth, medtechs can help providers make care more accessible and cut costs on care delivery.
- Insight–as-a-Service: The research firm is bullish about the future of insight-as-a-service in healthcare. IaaS is a cloud-based service offering insights and analytics that add value to data, making better use of what might otherwise be relatively uninformative big data stores.
- Monetizing expanded care delivery: As hospitals find new ways to deliver care, medtech companies should build models that help providers monetize expanded care delivery and support cost-effective patient management, Frost advises.
So how does this all net out, after you filter through the consultant-ese and look at what’s really being said here? I think what Frost & Sullivan is suggesting is that medtechs need to shift from providing big iron that helps doctors deliver individual services to solving high-level problems.
Clearly, the traditional freestanding products delivered by medtech giants are becoming obsolete in the face of big changes to care delivery. F&S notes that these giants have begun to buy smaller firms to keep up with these developments. At the same time, the research house says, medtech titans are building platforms offering value-adding services with which they hope to justify higher prices.
All this is reasonable and predictable. I’m concerned, however, if the pendulum has swung away from letting clinicians drive product design, we’re headed for trouble.
After all, we all know what happened when vendors designed EHRs largely for the benefit of healthcare administrators. Physicians were totally alienated, their workload increased dramatically and their ability to connect with patients fell dramatically.
Let’s hope that as medtechs flex their digital health muscles, they don’t forget clinicians’ and patients’ needs. The last thing we need is another wave of misery-inducing healthcare technology.
