5 Focus Areas For Medtech Business Success In 2024

By Tarken Friske, senior director of consulting, Full Spectrum

Amidst the steady drumbeat of potentially disruptive technology advancements, an evolving regulatory climate, shifts in patient behaviors and expectations, burgeoning industrywide momentum in areas like personalized care and outcome-based reimbursement, and challenging supply chain dynamics, medical device manufactures are tasked with accounting for a dizzying pace of change in today’s medtech economy. With so much change, organizations must distinguish reality from hype and identify the changes with true potential to impact their products and businesses. Manufacturers able to manage this uncertainty and change will seize on new opportunities through innovation. Successfully navigating this landscape requires proactive consideration of the potential value and risks to your business and your customers, sufficient organizational agility to react effectively, and a willingness to partner when needed.

1. Focus On Value Creation

Not every opportunity to innovate is going to be worth pursuing for every business. You don’t have to (nor could you) adopt every buzzy technology, follow every trend, or relieve every industry pain point. So how do you decide which initiatives to pursue? Through a relentless, continuous focus on the value proposition, both short and long term.

As a medical device manufacturer, you have four fundamental stakeholder classes to which you may deliver value:

• Patient – For the patient, value may come from better access to medical care and/or improved health outcomes but may also be derived from something more subtle and indirect like ease of use.
• Healthcare provider (HCP) – For the provider, value may come from increased patient volume, easier reimbursement, reduced cost, and better outcomes for their patients.
• Payer – For the payer, value comes from the ability to make better-informed decisions on care coverage, taking into consideration cost and effectivity.
• Yourself – As the manufacturer, your value proposition will take the form of improvement to the top and/or bottom line, through strategic market positioning, increased revenue, reduced costs, or another form of improved efficiency

Every opportunity considered should be evaluated to estimate its value proposition across all stakeholders. The best opportunities are going to be those that provide value to more than one stakeholder class, but don’t go overboard here. Delivering meaningful value to all stakeholder classes at once is typically impractical, leaving little flexibility for any eventual trade-offs. The sweet spot is going to be the opportunities that deliver value to two (typically) or three (occasionally) stakeholder classes. Manufacturers should avoid placing outsized emphasis on their own value proposition as compared to other stakeholders as this commonly leads to poor product adoption, diminishing realized value.

Once you have decided which value you intend to capture, you also need to determine KPIs (key performance indicators) that will determine success and then measure them at every opportunity.

2. Get Data-centric

Among the more prevalent technological trends transforming the medical device industry over the past decade, and one you most likely have already embraced, has been connectivity. Medical devices and applications are rich sources of data on everything from patient behavior to treatment efficacy, product reliability, and product usability. Connectivity is the critical link to unlock the value of this data for your organization.

Savvy manufacturers are collecting and leveraging this data both as a means of measuring the value delivered to product stakeholders (KPIs) and as a direct means of creating additional value by enabling greater data-driven decision-making for all stakeholder classes. Better informed manufacturers and providers drive better diagnostics and treatments, leading to better outcomes for patients. In the most mature organizations, device data are being directly monetized, opening the door to new revenue streams, partnerships, and business models.

As a medical device manufacturer, you should be collecting and exploring any data you can get your hands on (while maintaining compliance with privacy standards, of course). Storage eventually gets expensive, so keep only the data you anticipate using, but be considerate of what you may be discarding. Historical data is invaluable for back-testing new products and making informed decisions on priorities and trade-offs.

3. Ensure Organizational Agility

Innovation is often messier than you’d like. Organizations that innovate effectively will acknowledge up front that there will be unforeseen obstacles along the way; plan for this uncertainty and embrace the agility necessary to react to incoming data, learn fast, and pivot when warranted.

Somewhat paradoxically, agility must be planned for. Successful innovation requires a well-thought-out road map with periodic externally visible milestones along the way for reevaluation of both your goals and your progress toward them. Having established an expectation of value, and the KPIs and data feeds for measuring realized value, it is critical to constantly reassess whether you are meeting your expectations.

Ask yourself:

• What is your data telling you?
• Are you as far along as you expected to be at this point?
• Has something changed externally or internally that may necessitate revising your goals?
• Do you have what you need to make it to the next milestone (budget, resources, expertise, tools, etc.)?

Be prepared to employ your agility and pivot, when necessary, based on your answers to these questions. A pivot can be a reprioritization of goals, the adoption of a newly identified enabling technology, a strategic partnership, or even the wholesale abandonment and replanning of your current initiative. The keys are early recognition and unhesitant adjustment.

4. Don’t Go It Alone

Modern medical devices are complex, multidisciplinary products, spanning disease states, technical domains, geographies, and regulatory contexts. Conceptualizing, building, and operating these products requires identifying, integrating, deploying, and managing a multitude of disparate tools, technologies, frameworks, and standards. For manufacturers, this can mean juggling programmable logic, embedded firmware, application software, cloud infrastructure, and AI/ML, along with the challenges in networking, UI/UX, verification, security, and operations that must be overcome to integrate them. It is infeasible for a single organization to establish competence, let alone expertise, at this level of scale and scope and at the pace necessary to bring innovative products to market. Success requires third-party collaboration. Be introspective about your organization’s core competencies, where you have gaps, when to invest in expanding internal competencies, and which aspects of your products and business represent opportunities to partner.

Be opportunistic about strategic partnerships that complement or extend your organization’s core competencies. Such partnerships will bolster your organization in fundamental ways, providing additional capacity and introducing new skillsets or more radically by introducing wholesale solution elements that combine with your products to yield novel innovations.

5. Account For Risk

Excitement and optimism for the innovation opportunities in medtech are well warranted, but we can’t ignore the interplay of risk. Assurance of patient safety and adherence to quality standards always has been table stakes for successful medical products. As products get more complex, the potential hazards associated with design risk and use errors demand added focus, but manufacturers are increasingly faced with additional risk factors that may have been of lesser concern with their legacy products. These include the emergence of cybersecurity as a dominant risk class and uncertainty around winning acceptance of product technology innovation with individual payers and regulatory agencies.

Cybersecurity is being discussed in every boardroom and there has been a pronounced uptick in the directiveness of regulatory guidance emphasizing the identification and management of these risks in both pre- and post-market activities. We must acknowledge that increased cybersecurity risk is an unavoidable side effect of the complexity and interconnectivity demanded of modern medtech products. Just as you and your partners are innovating in your products, bad actors are innovating their means and methods of exploiting any gaps in your system and data security controls. Automatically treating this risk as a disincentive to innovating is a potentially fatal organizational mistake. Instead, manage risk just as you manage value to enable informed risk/reward decisions – characterize it, prioritize it, measure it, plan for it, respond to surprises with agility, and seek partners wherever internal capability or capacity falls short.

Increasingly, innovative products may face adoption or approval challenges with individual payers, health systems, and regulatory agencies based on sensitivities to cost and/or risk. A manufacturer may be called on to provide more comprehensive evidence demonstrating product performance and/or risk levels as compared to the current standard of care. Organizations that have established clear definitions of value and KPIs, and are collecting the data needed to measure them, are better positioned to win when faced with these obstacles.

Conclusion

The modern medtech landscape is rife with opportunities, rewarding organizations that deliver increased value to patients, HCPs, and payers through innovation in diagnostics and treatments. Successful organizations will take a data-driven approach to managing stakeholder value and product risk, embrace the agility necessary to accommodate uncertainty, and seek opportunistic partnerships that enable them to not just survive but thrive.

About The Author:

Tarken Friske is senior director of consulting at Full Spectrum. He is a seasoned technologist and has spent the past 16 years in the medical software space as a software engineer, architect, and consultant. He leads the consulting team at Full Spectrum, guiding clients through critical strategy, technology, and design decisions for legacy and next-generation products.