Medical technology (MedTech) firms are on the verge of reinventing their role in enabling care delivery due to various external factors, such as continuous margin pressures from providers on account of increasing healthcare costs, changing needs of end users, rapid technological advancements, empowered patient-consumers taking an active role in their health and demanding new-age solutions, and threat from low-cost emerging market competitors. The increasing emphasis on value-based healthcare, which drives outcome-based reimbursement and purchase decisions for medical devices, necessitates a shift in business model and pricing strategies among the MedTech firms.
The current scenario is presenting device companies with new opportunities to transform from a feature-oriented hardware sales model to a more engaging partnership model that helps save provider and payer costs while improving patient outcomes.To build solutions that solve the needs of key stakeholders in the current landscape, quantifiable data-driven metrics that prove the efficacy and effectiveness of the device are needed.
For this, companies should shift their focus to continuum of care solutions, as the value metrics to prove the outcome might not be readily available during the point of intervention and would need continual measuring beyond the acute care setting.Integrating data and analytics to enhance the care process (improved clinical workflow and real-time clinical decision support) or extending monitoring capabilities beyond acute care setting (to recovery wards and home) prove the benefit of capturing pertinent data.
The focus on continuum of care solutions, enabled by connected devices integrated into digital platforms, provides new revenue streams for MedTech firms centered on data and performance. It enables providers and payers to design innovative care delivery and disease management or wellness models. To sustain in the competitive market, MedTech firms need to embrace innovative risk-sharing models, value-based contracts, subscription models, and managed service partnerships. This research service covers key strategic imperatives for MedTech firms, key impacts on their growth opportunities due to business model transformation, and growth drivers and restraints for business model transformation.
Author: Srinath Venkatasubramanian
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