Monday, April 13, 2015

“Where is the Maestro?” Emerges as Recurring Theme at the 20th Anniversary Medical Technologies Frost & Sullivan Executive MindXchange

By Venkat Rajan
Principal Analyst
Frost & Sullivan

During his keynote, Dr. Joseph Smith, Chief Medical Officer and Chief Science Officer of West Health, drew a parallel between the healthcare industry as an orchestra with a number of brilliant practitioners, but lacking in the guidance of an authoritative conductor to synchronize individual efforts towards producing coordinated music.

That sentiment seemed to encapsulate one of the biggest overriding themes of the 20th Anniversary Medical Technologies Frost & Sullivan Executive Mindxchange. Over 2 days of interactive sessions on March 9-10 in San Diego, CA, speakers and thought leaders highlighted the various degrees to which the market many within the healthcare industry thought they once knew, is now being overhauled. 

“Inter-operability and Coordination”

Beyond his orchestra metaphor, Dr. Smith used the practical example of how newer automobiles are able to seamlessly use sensors and information towards collision avoidance, lane assistance, automatic breaking, automatic parallel parking, and other automated features. Those technologies help drivers mitigate user errors and provide warning about potential mechanical malfunctions.
In contrast, when it comes to the healthcare field, the introduction of a host of new devices and technologies has from his perspective, forced nurses and clinicians to be managers of technologies and synthesizers of information. Now these trained health professionals must ask themselves:

  • What are the different monitors telling me about the health of my patient? Which ones are more important? How do I distinguish trends from anomalies
  • How do I correlate readings from the various biometric monitors with to adjustments in treatment levels in another device (respirator, infusion pump, etc)?
  • What is the appropriate level of response to various alarms?

This overburden not only draws time and attention away from patient -centric care, it also can be traced to the high rates of errors and avoidable mistakes that occur in care provision. In an outcomes-based compensation model for care, those errors are not only clinical issues they are also financial liabilities to the facility.

Ideally, if there was greater inter-operability between the various medical technology systems, the information captured and responses would be more automated and would enable care givers to more easily perform their responsibilities, as opposed to encumbering them.

As with many of the challenges plaguing the healthcare system, moving from theoretical solutions to practical applications can be a complex and protracted process. This process requires buy-in from a wide range of stakeholders, who typically are not accustomed to working with external entities. Medical device developers rightfully can point the finger at a lack of clarity from regulators, a lack of openness in the IT systems of EHR vendors, and a lack of willingness to pay for those added functionality and services from providers.

From talking to many of the attendees at the event, it is clear that the vast majority of their organizations are willing to explore and collaborate on developing innovative solutions.

Garry Fingerhut, Executive Director of Cleveland Clinic Innovations, seemed to affirm how the imperative for some of these transformations has influenced how organization evaluate and foster innovative ideas from their specialists. A retrospective of start-ups their organization has developed and spun out seemed to capture that shift over the years from more treatment centric tools and implant technologies to more information and analytics based solutions in recent years.

It’s not that these issues have not been tackled previously; attendees noted initiatives from the past that were launched to a great deal of hype but lacked the requisite momentum to gain traction.
Accordingly, an interesting question arises as to, what makes more recent developments any different than those previous missteps?

The answer, based on insights provided by other speakers, is quite possibly, timing. Timing in the sense that providers themselves are undergoing a significant reformation of how they are compensated for their services.  That in fact brings us to the second major overarching theme of the event, which is as providers continue the evolution towards value-based care models….. how do vendors work with them?

Outcomes Based Care and Vendor Positioning of Value 

With Dr. Steven Merahn , Chief Medical Officer for US Medical Management, providing the provider perspective and  Dr. Michael Dahlweid ,Vice President and General Manager, Solutions at GE Healthcare, providing the vendor perspective, attendees at the event got a comprehensive overview of the customer-centric  ideas and strategies technology developers are using to create solutions that address the needs of their customers.

Dr. Merahn highlighted many of the innovative approaches their organization has implemented to move our current care paradigm closer to one of disease management and value-based care. Rather than making incremental changes, their organization developed from the ground up the infrastructure and skill sets it needed to be successful in this novel model. Where others saw risks, their team saw opportunities for innovation.

In the previous fee-per- service model, there was a fairly straight- forward means for vendors to equate the price of their technology to the diagnostic test or procedure being performed. However, in this new model, the specific tool or combination of technologies used towards better care are secondary to the resultant outcomes. Dr. Dahlweid outlined a very deliberate and structured process by which medical technology developers could assess the rational for transitioning into outcomes (i.e. risk) based contracts with their customers. From the perspective of GE Healthcare, he was able to share some valuable insights into their thought process, case studies, and even in some cases the internal challenges a company might face in getting approval for launching such initiatives.  One interesting nugget that was gleaned, is that risk based contracts might not necessarily be for everyone. In cases where there isn’t a tangible metric that vendors could track, trend, and most importantly monetize, some concluded that an organization might be better served exploring other approaches for business model evolution.


A key topic discussed during one of the interactive sessions, addressed the issue of industry convergence and risks of market obsolesce.  Participants highlighted the case study of Uber, and how this innovative IT based solution was able to take on the highly regulated and capital-intensive taxi cab industry. Similarly, in the healthcare space,  a key question was asked: How can participants avoid being a victim of disruptive innovation themselves?

Ultimately, I believe the key take away from this year’s event might be that while the forthcoming change is inevitable to healthcare, the strategies and approaches by which companies will react to those disruptions will be critical to the long term resiliency and success of their organizations.

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