Medtronic’s Ken Riff sees the writing on the wall.
The largest medical device company will not remain on top by simply doing what it has done all along: sell its products to hospitals where physicians implant patients with its life-saving or life-sustaining technology.
The current focus on keeping people well and lowering healthcare costs necessarily means that hospitals will use less of Medtronic’s implantable products.
At the MedCity CONVERGE Conference Tuesday in Philadelphia, Riff, vice president of strategy and patient data management of Medtronic’s largest business division – Cardiac Rhythm Disease Management – explained how Medtronic is looking for ways to be “part of the continuum of care.” Riff was a speaker on a panel about the opportunities for medical devices following healthcare reform.
“We need to have a much broader solution,” Riff told the audience. “We are looking for partners in diagnostics, population health, population monitoring and patient monitoring.”
How will Medtronic achieve this, given that historically the company has largely cultivated relationships with physicians to the near exclusion of everyone else?
Ironically, the physician, at least from one aspect, may hold the key in helping Medtronic expand its presence in delivering care.
In an interview after the panel, Riff said that Medtronic is looking at broadening its strategy by adopting the “adjacency model” conceived by Bain & Company Partner Chris Zook.
The strategy revolves around taking a company’s core business, look at multiple dimensions around those core businesses – in Medtronic’s case it would be physicians, patients, technology, customer – and move a step at a time in adjacent directions away from, but related to the core business.
For instance, Medtronic has relationships with physicians but currently the relationship is based on getting ideas to develop innovative medical devices, training them to properly use the devices and then helping them during surgical procedures.
Yet physicians happen to be the very people that are also diagnosing the disease initially before any intervention occurs. Diagnostics is that adjacent area in the physician dimension that Medtronic has never really addressed. Now, Medtronic can take that adjacent step to dip its toe into diagnostics.
All of this of course means that the medical device behemoth is looking for acquisition targets in diagnostics, patient monitoring, population health management, Riff said.
Which of course is good news for those numerous startups that may not necessarily be developing the next breakthrough medical device.