The transformation and capabilities of MD have exceeded the expectation of doctors and patients with the Internet of Things (IoT). Sensors, connectivity, system applications, mobile devices and analytics have opened an array of possibilities on how medical devices can contribute to the health of people, cost and type of services.
Medical device companies are transforming themselves from devices/consumables providers to disease/care management organizations. Digitization in severe care, chronic care or in adherence is greatly supported by IoT medical devices such as subcutaneous drug delivery units, continuous glucose monitors, vitals monitoring equipment, etc.
There are also more fundamental shifts forcing medical devices companies to reinvent themselves:
- the consolidation of group purchasing organizations (GPOs) and accountable care organizations (ACOs) under healthcare reform
- the growing focus on prevention and wellness management, technology convergence, value-based healthcare, etc.
- The arrival of digital enterprises such as Google and Apple into the consumer health space is ushering in new possibilities
Sensors and embedded software are now integral parts of most of the mechatronics medical devices. Medical technologies range from implantable devices, capital-intensive diagnostic and monitoring equipment, to mobile medical apps.
Three distinct drivers for medical devices industry digitization have emerged:
- The need to increase operational efficiency (e.g., preventive maintenance of devices).
- The ability to innovate digitally (e.g., the need to digitally communicate vitals and device information).
- The creation of industry ecosystems (e.g., the ability to link devices and systems together, diagnostics, monitoring devices, health records).
IoT MD – Strategy Approach
The lack of standards, a crowded product landscape and the relatively nascent stage of technology compel medical device companies to carefully craft their IoT strategies.
Medical device makers need a concerted IoT strategy to drive business success. The true value of IoT lies in its transformative potential and innovation capabilities. A focus center of excellence is required to provide leadership and drive the initiatives across the organization.
A large set of solutions exist in the marketplace, but it is essential to understand how and when a particular solution is relevant for a medical device company. Creating specific operational tactics and templates help in standardization, consistency and cost efficiencies.
Since the IoT could fit the needs of various areas/groups within a medical device company, we suggest that business leaders set an overarching direction to ensure coordinated efforts start with a center of excellence (CoE).
The CoE will function as a clearing house for best industry solutions, provide strategic direction, set governance and ensure broader alignment with the enterprise goals. The charter of a CoE could vary depending on the size of the enterprise and the strategy.
The mandates of the CoE could include evangelization, training sessions, thought leadership, proof of concept applications, standards/best practices and governance. It can consist of business architects, divisional heads, enterprise architects and product owners.
Rather than reinventing the wheel, it is prudent to harness best-in-class solution frameworks and proven methodologies, and to work collaboratively with partners. In the IoT world, there is a diverse array of solutions and partners to consider.
By cultivating a strong partner ecosystem, medical device companies can benefit by mitigating concerns around regulatory requirements, accelerating time-to-market and reducing technology risks.
Transformation and Capabilities of Products and Services
The past few years have seen a rise in “value” customers—those who gravitate to products that are good enough and competitively priced. Unlike customers who seek premium products, value customers are willing to sacrifice a degree of innovation, quality, and service in return for a lower price.
For now, medical device companies offer customers four levels of products and services:
- Premium differentiated.
These products and services are differentiated by efficacy, outcomes, or care delivery and are usually supported by high-touch selling and servicing models. Because they are innovative and provide proven benefits, they command high prices.
- Premium undifferentiated.
Although incrementally innovative, these products and services are not clinically differentiated from competitors’ offerings. This category will suffer intense erosion in price and share.
The features and services this group provides are tailored to meet customer expectations for good-enough products and usually sell at much lower prices than premium products. The sales model for these offerings may involve online support or light-touch representatives who call on clients.
These products do their job but offer minimal service. They compete purely on price and are often used in settings where providers seek to supply a basic service rather than optimize outcomes.
The IoT is expanding the sensory capabilities for all products by providing visibility into the field and usage patterns, unleashing transformative opportunities and capabilities for the entire ecosystem of caregivers, patients, payers, and medical devices.
As decision makers become more cost conscious and competition intensifies, opportunities to serve value-oriented customers in medical devices are growing fast. To adapt to this new world, manufacturers need a deep understanding of the value segment’s needs and profit pools.
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