Oh hey, sorry if I bumped into you. I should be more careful when I walk down the street, but I was distracted. By what you ask? Well, me and my trusty binoculars have been looking skyward for flying pigs and downward for massive blocks of ice because it has become apparent that things have changed.
I used to say that the medical device industry was going to figure out that the old world of selling their wares was gone sometime around when pigs fly or hell freezes over, thus my quest for the above-noted items. I was in Minneapolis last week, self-appointed mecca of the medical device industry, and I saw, with my own eyes, some longtime medtech industry stalwarts talking about the current state of the industry in a way I have not seen before.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
I was at the Minneapolis Medtech Conference and sitting in the audience watching a panel prior to mine. Now let me add that the panel I was there to moderate was about how artificial intelligence and data are changing the medtech world, which is weird enough. Historically there has been little discussion about the convergence of these worlds where the medtech glitterati gather. MedTech entrepreneurs of the traditional variety and data scientists of the new world order variety are rarely mixed in the same drink. They have not been entirely imiscible (a new vocabulary word I learned from my pal David Shaywitz recently), by which I mean they are not totally incapable of mixing. We have seen evidence of the cocktail here and there (Propeller Health, Canary Medical, even products like implantable defibrillators from big companies like Boston Scientific and Medtronic), but they have been rare, with most of the medical device world focused more on the mechanical engineering aspects or even the bioresorbable aspects than the data-intensive ones.
And even more relevant perhaps, the medtech world has stayed largely away from the payer world, thinking about reimbursement primarily as an offensive strategy much akin to how one might guard LeBron James, rather than how one might hold hands and sing Kumbaya. Few of the medtech stalwarts have really committed to products that are intended to reduce costs to the healthcare system; the usual refrain is better medical devices are “more expensive but someday the world will thank us.”
But there I was, in the belly of the medtech beast, watching two very stalwart representatives of the field (guys who have been at it a really long time with many successful medtech companies under their belt) say things like this:
Fred Moll, Current CEO of Auris Health and Founder of Hansen Medical, Restoration Robotics and Intuitive Surgical, among other things, said:
- Electronics in and on the body is the biggest recent trend affecting medtech;
- Big technology companies are making real inroads into medtech and traditional medtech must partner with them to deliver better healthcare; and
- Use of technology to transform the cost of healthcare needs to be in the forefront of medical device thinking
Andrew Cleeland, currently CEO of the Fogarty Institute for Innovation and founder of medtech companies Twelve and Ardian, among other medtech roles, said, and I quote, “There is a roomful of people here who would completely agree with that.”
I had to pinch myself to be sure I was actually in Minneapolis. And that’s not because I disagree with any of those statements; in fact, I violently agree. But I haven’t heard them so starkly stipulated as fact by those who have been instrumental in building the medical device industry to what it has become. Seriously, there was a time – and it wasn’t more than 5 or 6 years ago – when I suggested to another big medical device leader that their longtime medtech conference (a different one) might consider incorporating some stuff about the booming digital health field and how it was going to change the face of medtech. He nearly laughed me off the phone, saying that this really wasn’t relevant to his audience. My how the times have changed. And that’s why I’m scanning the horizon for the flying pigs – the change in thinking is dramatic.
I used to feel like the only person who had ever given any thought to the convergence of tech and devices at these conferences. They were littered with people who had spent their whole careers thinking that the medtech field was special and different and that to mix with the healthcare IT side was, well, weird. But this same panel with Cleeland and Moll also featured Robin Thurston, CEO of Helix, who is at his very first medical technology company (consumer-focused genetic testing) and who most recently worked for UnderArmour after starting MapMyFitness. Talk about an unusual mix. It was such an interesting discussion.
And I’m so glad to see the dawn of this new convergence thinking become more and more generally accepted. I will say that I have very recently spoken to several medtech executives who haven’t get gotten the memo that the world has changed and who are still trying to sell the old “if we build it, they will come” story. But if guys like Moll and Cleeland are preaching this gospel, it won’t be long before the rest of the converted will declare themselves. The medtech world definitely has to recast itself as a group that contributes to reducing healthcare costs through improving quality. The old narratives just don’t work anymore and are exactly what led to the decline in medtech investing.
My panel was a lot of fun to moderate. I got to hand-pick my participants and decided to mix it up with three entrepreneurs working right at the nexus of digital and devices (Christine Tsien Silvers from Health Reveal, Fabien Beckers from Arterys and David Van Sickle from Propeller Health) and a big medtech leader (Ken Stein from Boston Scientific) who has also very much seen the light of the new day (or long ago realized that it was the flying pigs who were blocking out the sun). We spoke about how the market is changing and how these companies are using data and machine learning to make medtech better, stronger and cost-reducing.
We talked about taboo topics like whether prices should drop when data yield information that certain devices are less effective than others or whether outcome and price should be tied together (short answer: yes). We talked about how complex the issues are about maximizing corporate revenue and knowing that one’s products are better suited to a smaller market than originally hoped, as a result of seeing data that proves it. We also spoke about the complexities of knowing whether we yet have the right data to be effective in these endeavors and whether the data itself is ready for prime time or still needs much hand curation (yes it does). Good stuff.
And I was somewhat amazed to see the audience paying attention. There were few people looking at their cell phones (at least compared to the usual conference) and people deeply focused on the new AI narrative and how it affects them. I polled the audience at the start of the panel and asked how many felt truly comfortable with the Data/ML/AI conversation that has overtaken the healthcare space and about 1/3 of people raised their hands. I also asked the audience how many of them were tired of hearing these buzzwords and about twice as many responded in the affirmative. And yet, despite the buzzword fatigue, the medtech world is clearly finding a hunger to learn and think in new ways. Finally: Watch out for the pigs.
