Hospitals Looking to Medtech for Stronger Alliances

To grow their companies and advance patient care, medical device executives should focus on the broader, evolving and more sophisticated set of needs of hospitals and health systems that are increasingly consolidated as well as integrated across the care continuum, according to a report detailed at the Massachusetts Medical Device Industry Council’s (MassMEDIC) 21th Annual Conference at the Boston Convention & Exhibition Center.

The new report from L.E.K. Consulting, the latest annual edition in a long running series of such reports over the years, identifies and characterizes the major meaningful shifts within the U.S. healthcare landscape manifesting in the trends affecting hospitals and hospital systems, their changing priorities, and how the broader ecosystem is adapting accordingly.

The report cites the trend of Medicare and other payers shifting toward value-based payment that is closely tied to outcomes. In response, hospital systems are evolving their models, and medical device and healthcare IT / service companies that serve payers and providers are expanding their roles to provide broader product offerings, as well as more value-added services, including data and technology offerings. 

Monish Rajpal, managing director of L.E.K. Consulting, said that the bases of competition in the industry are shifting, and medical device companies need to grow their capabilities—including data connectivity, analytics, consultative offerings, and more—to react to or take advantage of ongoing changes.

“With the increased focus on integration across sites of care, accountability for outcomes and costs, and competition for critical mass at every level, it is not surprising that a large and growing cadre of hospitals are receptive to third-party participation in solving major issues. Medtech companies on the other hand need to look for ways to broaden their base of business and improve their overall relevance and sustainability, making this potentially a true win-win opportunity in healthcare, especially if the partnerships evolve into longer term, value-based relationships rather than transactional ones based on product price competition alone,” said Rajpal.

The conference was held during the third annual Massachusetts Medtech Week and featured a “fireside chat” with Scott Whitaker, president and CEO of Advanced Medical Technology Association (ADVAMED) on how the policies of the Trump Administration will impact the medtech industry and the current climate of medtech innovation.

“The landscape for the medical device industry is changing,” said Tom Sommer, president of MassMEDIC. “Device companies need to adapt to new initiatives coming from the federal government, while at the same time continuing to innovate to address the needs of patients and hospitals. It’s an unprecedented time, however Massachusetts’ companies are in a good position to succeed.”

Read the entire L.E.K. report here: http://www.lek.com/sites/default/files/2016%20Hospital%20Study_Executive%20Insight.pdf.