The future of healthcare and the role of medtech

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Medicine doctor hand working with modern computer interface as medical conceptAt the hospital, provincial, and even federal level, those responsible for running our health care system are developing solutions to address the rising costs of healthcare. Alternate funding models are being considered, including paying for outcomes, rather than paying for procedures. In Ontario for example, activity based funding has been accelerated through the evolution and implementation of the Health Based Allocation Model (HBAM) and Quality Based Procedures (QBPs).  Similar initiatives are being pursued in Alberta, British Columbia, and Quebec.

As Governments look to align innovative funding models with outcomes, providers need to be empowered to partner with other stakeholders to deliver care differently. Governments and health care providers are not the only stakeholders looking for solutions. There is a strategic shift in terms of where medical technology fits in the world of healthcare, as highlighted in numerous recent thought leader reports. Here are just a few.

In Harvard Business Review, authors Michael Porter and Thomas Lee argue for a fundamentally new strategy to address the problem of rising costs in healthcare. ‘At its core is maximizing value for patients: that is, achieving the best outcomes at the lowest cost. We must move away from a supply-driven health care system organized around what physicians do and toward a patient-centered system organized around what patients need’.

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A recent 2014 report from Ernst & Young suggests that medtech companies ‘may have to expand their traditional offerings by moving beyond the product (expanding into services and solutions), beyond the hospital (enabling care delivery wherever patients happen to be) and beyond treatment (providing prevention, remote monitoring and more)’.

The report also showed that within hospitals, pressures are shifting from simple cost-cutting to receiving value and that physicians have less influence on purchasing decisions while program administration, finance, and procurement departments are becoming more central to purchasing.

A recent PWC  report states that ‘the mere concept of innovation needs redefining in a health ecosystem that demands and rewards new models for delivering better care at lower costs across a broad patient population. Medtech companies must get ready to compete in this new environment’.

The health care system could benefit from greater collaboration with industry and learn from private sector best practices, such as how airlines do their scheduling, or how banks allow us to access our financial data securely with just four digits.

The system cannot continue to finance itself at six per cent increases in cost per year. A big sea change is needed. We need to retrench and ask how we can do things differently and more efficiently. At the same time health care systems need to ensure value for money and improved patient outcomes and timely access to care. Moreover, the health care system needs to ask itself how do we make these shifts, and who are the stakeholders with such expertise that we need to work with.

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Where medtech is heading

Medtech is reinventing its model to better meet its customers’ needs. For example, through the 1990s IBM shifted from a personal computer hardware company to a global services powerhouse. While medtech will continue to innovate in terms of products, many companies will add a services and solutions offering.

Consider this example from a story in the Western Producer (Regina): ‘the process [of partnering with industry] has been implemented with great success at Maastricht University’s hospital in the Netherlands. The facility has 750 beds and more than 100,000 cardiovascular clinic visits a year. The hospital, with Medtronic’s help, initiated 70 projects to establish patient pathways and create efficiency…seven visits per patient were cut to just one and patient experience was greatly improved. During that appointment the patient would check in once, change once, and the doctors would come to the patient in a very organized way. The hospital realized about $6 million in annual savings. Treatment can be remotely monitored which also reduces return visits.’

For the medtech industry to continue to thrive amid all this change, it’s crucial to align its strategy with the three current universal healthcare needs and priorities: to improve outcomes, to optimize costs and efficiencies, and to expand access for patients (in Canada, this means timely access to the right therapies at the right time).