Any new products introduced by medical device companies must not only have clinical value, but they must deliver economic value to customers, Medtronic (NYSE:MDT) CEO Omar Ishrak said at the Cleveland Clinic Medical Innovation Summit.
“Technology without a sense of the cost-effectiveness of that technology is not sustainable,” Ishrak said.
For Medtronic, that means thinking about how its new technologies will help its primary customers: hospitals and clinicians.
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“Today when we try to commercialize something, the key question is: Is it worth it?” Ishrak said. “The fact that it’s better [clinically] is sometimes not enough.”
That requires a bit of a change in thinking by device companies, which have gotten good at performing studies to exhibit clinical value. Going forward, hospital administrators will demand to see an economic analysis and the financial benefit from introducing new technologies. Device companies need to figure out how to demonstrate that, Ishrak said.
Ishrak summed up Medtronic’s value proposition to customers with the following equation: clinical evidence + economic evidence + customized solutions = better customer value.
On the subject of economic value, moderator Michelle Cortez of Bloomberg News asked Ishrak to address the perception that Medtronic cares more about profits than improving healthcare.
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Ishrak said the key for Medtronic is to be transparent and consistently do the right thing.
“We have to place integrity and patient safety above everything else we do,” he said.