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As originally asked by Gunter Wessels,Ph.D.,M.B.A.
We have observed that the medical device and technology innovation race has not slowed, but gaining provider’s adoption of recent advances is definitely more difficult these days. Why? Certainly there are cost pressures, but there is a fundamental change in the innovation-adoption model: A shift from suppliers driving medical innovation to provider care delivery innovation (and supplier capitulation) is evident. Examples that indicate this shift include the rise of Accountable Care Organizations, the melting of physician preference influence on device selection, and the increasing price-value analysis in supply chain management. How do you remain relevant when what made you successful in the past isn’t working as well now?
Todd Staples, MBA
My only point is that the big influencers and drivers of innovation (demand) are the Payors, Providers, and Patients – it is the device industry and others role to see that the demand is met and satisfied, and to some extent nurtured in new directions.
I would encourage our group members to read the report in it’s entirety – there is great insight in this report for all regardless of your job function.
Todd Staples, MBA
I think the only way device companies can remain relevant in this “New Normal” is to continually seek to engage with their customers on areas that providers are being challenged to improve. A good example of this was a few years ago when CMS made several key changes to hospital reimbursements refusing to pay for Hospital Acquired Infections (HAI) and patient treatments that were a result of negligent care such as falls, surgical errors that resulted in additional surgeries, and pressure ulcers. These were areas that hospitals had been getting reimbursed on in the past, so the only motivation for a provider to reduce these incidences was patient care, which is many times a subjective thing to measure in the real world. As soon as CMS put the spotlight on this issue every hospital immediately was scrambling to reduce incidences of these now very important expenses.
Out of this particular example, many device companies rushed to shift product strategic focus, and M&A activity adjusted as well to meet this demand from the market. Only by having a two way conversation with providers and understanding their pains, can manufacturers stay ahead of these trends and remain relevant to the delivery of care. Once a segment of the market becomes commoditized, it is common practice for manufacturers to take a step back and look for the next expanding need, which is exactly what they should be doing.
Najim Mostamand, CFA
And why do you wonder “we” might be irrelevant?
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