There are many trends and forces that affect advancement in medical technology. The following are 10 key examples of these influences and how they relate to opportunities or challenges in the medical technology field.
1. Outcomes vs. Episodic Success
Medicine is moving away from Fee-for-Service and more towards Value-Based reimbursement. This is meant to put more emphasis on producing outcomes or long-term solutions, rather than episodic success that may involve making incremental improvements to the treatment of symptoms. This correlates to the differences between a physician, aided by medical devices within a clinical telemedicine system, who can see and treat a patient, and a telephone interaction with a consumer seeking symptoms-based healthcare from a Direct to Consumer telehealth service.
The costs of healthcare in the United States have steadily risen to some $3 trillion a year. Concern that they will continue to increase led to creation of the Affordable Care Act, Accountable Care Organizations, and telemedicine parity laws passed in 29 states. Clinical telemedicine represents the only way to advance access to healthcare while holding down costs and helping to improve outcomes.
3. Marginal Improvements vs. “Disruptive” products
While many medical technology manufacturers attempt to create paradigm-shifting products, most only end up achieving small improvements to existing technology. Companies whose R& D departments continue to make upgrades to existing hardware and software at the suggestions of customers provide consistent value.
4. Materials Technologies
Certain manufacturers are establishing significant competitive positions by becoming familiar with the latest in material technologies for applications in traditional device, pharma, biopharma, cell biology and other manufacturing.
As a reflection of an uncertain economy, available financing has largely shifted short-term, return-focused investors, such as venture capitalists and angels, to mid-cap and large-cap medical technology companies with a long-term vested interest in the future of healthcare. These established companies intend to stay in the medical technology business regardless of current market conditions and so require innovation to progress in their industry.
Economic downturns serve to “thin out the herd” in any industry. It is no different in medical technology. Companies that could not complete development when capital was readily available do not belong and will not remain in the business when funding is scarcer.
7. Convergence of Disciplines
As research from innovators in different scientific disciplines – materials, cell biology, biotech, pharma, etc. – converges, understanding increases. This has led to a range of novel medical products.
8. Information Technology
Manufacturers who understand the significant effects of information technology on medical technology developments will be able to gain strong competitive advantages.
9. Technological Applications for Neurology
The potential of medical technology as it applies to intervening in neural disease and trauma is virtually untapped.
10. Medical Device Excise Tax
The medical device tax has been suspended for two years as result of the taxation and spending bill approved by Congress and signed by President Obama in December, 2015. Many small and large manufacturers complained that the tax would impact their sales. They had raised their prices and reduced their workforce and their employees’ health benefits in the lead-up to the tax.