The bottom line of PricewaterhouseCoopers’ Health Research Institute report on innovation in the medtech industry can be summed up as follows: “The value of a device is no longer solely in the product itself.”
While clinical efficacy is a must, the true value in medtech today is a company’s ability to provide information, services, and other assistance to customers to solve additional problems such as improving diagnostics, increasing operating room efficiency, reducing length of hospital stays, monitoring patients remotely, and keeping people out of the hospital.
This is the kind of news we all anticipate, but medtech, a large industry with complex infrastructure, has been sluggish to move on. Other key findings from the report:
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- Only 11 percent of medtech companies use social, mobile analytic or cloud technologies “aggressively” to engage with consumers.
- Only 17 percent of the executives surveyed considered their companies to be “innovation pioneers.” What? Shouldn’t that number be a lot closer to 100 percent? If you’re not innovating, what the heck are you doing?
- Integrated services and new business models will become important to the medtech sector. (Think about Medtronic’s acquisition of Cardiocom.)
- “Medtech executives expect more breakthrough and radical innovations in services and business models, but just 14% said that they coordinate and manage innovation processes for maximum efficiency.” True innovation and “maximum efficiency” don’t go hand in hand in my book. However, this probably points to a wider issue of not encouraging innovative processes nor having steps to evaluate them. In a release, PwC principal Ed Yu suggested this approach: “Embrace failure–create an innovation operating model that separates breakthrough and radical innovation from incremental innovation.”
“Historically, medtech innovation has relied on incremental improvement,” Christopher Wasden, managing director and global healthcare innovation leader at PwC, said in a release. “But ‘innovation’ needs redefining for an environment that rewards value–measured in affordable patient outcomes and customer satisfaction–over volume. True innovators learn from failure–fast, frequent, frugal failure. Medtech leaders need to change their business models, their corporate DNA, to embrace lean innovation beyond their core operations.”
The company suggests, among other things, measuring innovation in new ways with forward-looking metrics. The group also advises that companies work to create strategic partnerships to focus on a target area or disease, allowing the company to “get closer to the patient.”
