Medtech and payers start thinking about health economic outcomes, but doctors haven't
Earlier this year, our VP Adrienne Lovink presented the top ten trends to look out for in 2013. To no one's surprise, a focus on health economic outcomes was listed as our top trend. We all know the story: even though medtech markets in countries like China and India are fast-growing, the large US and European markets still represent the bulk of revenues for most global companies. As a result, companies are having to adapt to a shifting view of health care in these countries as governments and regulatory bodies clamp down on unnecessary spending.
Medtronic's CEO Omar Ishrak recently voiced the effect that this is having on the medtech industry by pretty much saying that they have to stop viewing themselves as a device provider, and start viewing themselves as a health care solutions provider. While this is a bold statement for a company that well, manufactures devices, he's right. ?The true value of the procedure occurs after it's complete,? said Ishrak.
Until recently, however, determining cost-effectiveness over an entire treatment cycle was something that medtech manufacturers gave little thought to. For example, this paper from L.E.K. Consulting discusses how hospitals have indicated that medtech companies aren?t really meeting their needs for providing clinical and cost data?there is therefore a great opportunity for medtech companies to forge stronger relationships with hospitals on this front to get ahead of their competitors. According to one quote from a hospital CEO in the L.E.K. Consulting paper: ?It would be great if medtech companies would take a more coordinated approach and assess our needs before providing their offering. So far, no one is doing this.?
Payers are also in the process of adapting to this new health care model. Recently, several US insurance companies joined forces
to help determine which medical devices are most cost-effective in the long term. This will be something that medical device makers will definitely be watching. Implanted devices like pacemakers, defibrillators, stents, hip and knee replacements, and heart valves will be under particular scrutiny.
Interestingly, with all the talk about how medtech companies are going to have to increasingly sell to payers on cost
rather than physicians on outcomes, I was surprised to see that in a recent survey
, the majority of doctors still felt that they have the most control over medtech purchasing decisions. Maybe this just represents how new this way of thinking is in health care, and that purchasing decisions based on long-term cost-effectiveness have yet to be realised on a wide scale. Still, I can?t help but think that these doctors are about to be sorely disappointed.