Creating a Winning Medtech Business Model for a Post-Reform World
Executive Summary
Together, the global financial crisis and health care reform could combine to dramatically alter the device industry's traditional business model. The result could be a variety of different models arising from shifting relationships with physicians and hospitals, with the winners being companies that adapt most effectively to this changing environment.
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iRhythm: Reinventing Arrhythmia Monitoring
There has been a tendency in the health care products industries to design products that serve the maximum number of patients, in order to create the biggest markets. In pursuit of that all inclusive goal, medical device companies have often overengineered products, adding features - and costs - not necessary for the majority of patients. This has been the case in the field of arrhythmia monitoring. By challenging previous assumptions about arrhythmia monitoring, iRhythm believes it's developed a device that improves the diagnostic efficiency and ultimately the economics of arrhythmia care.
In Medical Devices, Is "Good Enough" Good Enough?
Device companies have historically been rewarded for even incremental technology enhancements with premium pricing by a price-insensitive customer, all in the spirit that no improvement to the clinical episode would go unrewarded. But in a health care system that is trying to balance exploding costs and greater access, such a goal becomes simply unaffordable. Instead, payors, hospitals and even physicians, encouraged by government policy makers, will increasingly look for technology that delivers an acceptable clinical outcome at a better price.
In Medical Devices, Is "Good Enough" Good Enough?
Device companies have historically been rewarded for even incremental technology enhancements with premium pricing by a price-insensitive customer, all in the spirit that no improvement to the clinical episode would go unrewarded. But in a health care system that is trying to balance exploding costs and greater access, such a goal becomes simply unaffordable. Instead, payors, hospitals and even physicians, encouraged by government policy makers, will increasingly look for technology that delivers an acceptable clinical outcome at a better price.