Medtronic always has been at the forefront of medical device industry trends. In a recent interview on MassDevice.com, Medtronic CEO Omar Ishrak explains the need that a lot of life sciences companies have to prove the overall economic value of their technologies.
One of today’s most challenging medical device industry trends is that medical device innovation must demonstrate economic value. In fact, lowering costs is now mandated with the recent health care law changes. “Economic value, in simple terms, is projecting our value proposition in financial terms for our customers, not only the clinical benefits, but the financial benefits,” Ishrak says. This kind of thinking, he adds, is transforming Medtronic’s strategic priorities for the coming years.
But health care’s very nature makes it difficult for companies to present medical devices not as a cost, but as an investment. “The cost of healthcare is incurred during a procedure,” Ishrak notes, but “the benefit of that investment, if you like, is realized at later time and potentially in a different place.” In this context, it’s difficult for any medical device company to follow a patient’s outcome and the health care costs after a procedure has been done.
Medtronic and other companies can begin making the case for investment by partnering with hospitals and running pilot projects to focus on areas that reduce health care costs. The goal is to produce quality data that proves their technologies can reduce overall patient costs.
A CRM solution can help companies like Medtronic by providing ways to monitor these pilot programs and hospitals. Greater visibility through real-time analytics is the key to identifying areas where costs need to be reduced and where cost reduction has been achieved. They then can use that data to put together more qualitative analytics and even a case study to prove the overall effectiveness.
“Once those pilots are successful, we intend to scale them across those systems and eventually do even broader market expansion,” Ishrak tells MassDevice.com. Going forward, Medtronic will assess economic value before spending money on products, he adds, a new approach that will require changing “the mindset and the thinking and the culture in the company.”
Source: MassDevice.com, January 2013