A new era of healthcare transformation is set to disrupt the MedTech industry.
An aging population, rising chronic disease prevalence, and urbanization are bound to further strain healthcare systems, already grappling with issues of healthcare access, quality, and cost. New treatment paradigms are required which integrate elements of prediction, prevention, and automation to make care more affordable and efficient.
Are governments, providers, payers, MedTech companies, and consumers making progress? Perhaps, but in some cases it may be too soon to tell. Established players, disruptive entrants, and governments are developing new solutions and approaches to improve care access and quality, and to control costs. However, delivering value in the current dynamic healthcare environment will require a broad set of partnerships, relationships, and joint-ventured initiatives. The breadth and scope of healthcare changes and range of different regional delivery systems all indicate that partnering models will be quite diverse. Realizing new insights, new approaches, and new sources of value within a meaningful time frame will require collaboration. The MedTech industry is experiencing an evolving reasoning for moving away from an input-based approach, that is, inputs from patients and physicians, to a value- and outcome-based approach, that is, improving the patient health outcomes. The main aim of this transformational shift is to provide maximum benefit to a large population alongside a set of controlled resources.
Future medical devices will be targeted to meet the unique needs of emerging markets, which demonstrate high growth opportunities compared to saturated developed markets in the Western hemisphere.
The pressure to reduce healthcare expenditure, intensifying competition, and consolidation of hospitals and health systems has resulted in unprecedented changes in the way MedTech companies do business. The dynamic marketplace is transforming the traditional way of doing business and requires the MedTech manufacturers to rethink their existing business models and create value proposition for customers through innovative products and solutions. This transformation of the MedTech industry is fueled by increasing emphasis on quality of care and treatment, stringent regulatory landscape focusing on patient safety and cost-containment, empowered and informed customers, and emerging technologies.
Indian Market Dynamics
The Indian medical device industry continues its upward march of growth and is strongly supported by India's robust legal framework. The market will benefit from sustained economic growth and strong healthcare drivers. It will continue to reduce its dependence on imports, as local manufacturing expands under the Make in India initiative. The expanding private sector will remain the main growth driver.
The Indian MedTech market will continue to record healthy growth despite a hardened stance on pricing for essential devices. Currently valued
at 25,426 crore, the market is expected
to grow to 27,736 crore in 2017 and to 39,262 crore in 2021, predicts BMI Research. Market growth will moderate over the next 6 years, reflecting an increasingly competitive operating environment and expanding market share for lower-cost domestically produced products in some sectors.
In the 12 months to January 2017, imports grew by 7.7 percent, taking the running annual total to 18,130 crore. Despite an improved performance in 2016, headwinds to exports persist with a weak external demand outlook in key markets. In the 12 months to January 2017, exports grew by 8.7 percent, taking the running annual total to 7,510 crore.
India will actively target investment from major medical device manufacturing nations under a memorandum of understanding signed between Invest India and the local medical device industry. The public–private collaboration will also seek to address the roadblocks hindering investment to achieve its goal of becoming a global medical device manufacturing hub. Meanwhile, Japan will partner with India to develop an internationally harmonized medical device regulatory framework and Japanese manufacturers will support the
Make in India initiative under a program of enhanced co-operation agreed in May 2017.
Established players, disruptive entrants, and governments are developing new solutions and approaches to improve care access and quality, and to control costs. Lacking definitive measurement, results to date appear mixed; however, according to a recent report by Deloitte, stakeholders that focus on five key considerations in 2017 and beyond can keep moving forward:
Cost. The world's major regions are expected to experience healthcare spending increases from 2.4 percent to 7.5 percent between 2015 and 2020. Providers finding it difficult to gain further cost and operational efficiencies after picking the low-hanging fruit should turn their attention to more transformative initiatives to bend the cost curve. This means breaking through the constraints of a traditional care delivery model; shifting from long-standing FFS payments to outcome-based, cost-sharing financial models; moving from acute, episodic medical treatments to proactive and holistic population health management; and transitioning from manually intensive clinical and business processes to technology-enabled solutions.
Care delivery. Lack of access to basic healthcare services and variations in care quality are persistent problems in many of the world's regions. Today's health challenges are complex and interrelated so care delivery models that use a multipronged, collaborative, and technology-enabled approach are more likely to yield positive results. For example, integrated care that addresses patients' social, behavioral, and physical needs can help improve outcomes and reduce costs; however, implementing a collaborative care model is likely to generate organizational challenges. For both providers and payers, it can be difficult to overcome employees' resistance to new roles and procedures without strong leaders to champion integration and improved HIT to enable widespread adoption. Improved education and reimbursement incentives may drive adoption rates and usage. Public policies can play a key role in encouraging and maintaining collaboration across sectors, as well as creating incentives for different sectors to contribute what they can to the cause of improving population health.
Innovation. Robotic surgery, 3D printing, implantable devices, and other digital- and technology -enabled innovations that target prevention, monitoring, and treatment are showing potential to improve outcomes and reduce costs. Healthcare leaders should consider building ecosystems that embrace nontraditional players and sources of knowledge outside their own four walls. Stakeholders should consider building pilots before investing in scale, learn to embrace change, and evaluate new revenue sources. Additionally, organizations should strive to be agile in anticipating and adjusting their strategies as innovations continue to evolve. From a tactical perspective, incorporating digital healthcare and analytics into daily practice can help to streamline care pathways, reduce costs, increase patient satisfaction, and improve quality. Finally, healthcare organizations of all sizes should embrace innovation and calculated risk-taking, and stop waiting for the perfect solution – try, learn, and continuously evolve.
Operations. Public and private health systems will likely need to implement new business and clinical operating models to deliver scalable, efficient, and high-quality care, and to reduce waste, redundancies, and costs that threaten system sustainability. Just like commercial enterprises, healthcare organizations should invest in tools and processes to better understand their target markets and customer segments, and improve the patient experience by engaging more effectively with today's active and informed healthcare consumers. Additionally, organizations should standardize their clinical and business processes to improve quality and efficiency; enhance hospital information systems to support evidence-based decision-making; and use M&A and alliances to share resources and enhance capabilities. Insights and evidence should inform where future strategic and tactical investments will be made to improve operations and realize greater value.
Regulatory compliance. Healthcare is one of the world's most regulated industries, with laws and policies addressing clinical quality and safety, cyber security, counterfeit drugs, and corruption. Taking a standardized, consistent approach to compliance planning, execution, and monitoring makes good clinical and business sense in today's highly regulated global healthcare environment. Provider, payer, and life sciences organizations should promptly assess potential capability and data security gaps, define their vision and needs, establish a forum and governance process for risk-related decision-making, secure adequate funding and appropriately trained staff, and develop effective implementation and remediation programs. Cyber security should be a major focus area. Organizations can avoid or mitigate cyber breaches using a centralized security program that contains authoritative, uniform, and efficient policies and decisions; encourages employees to recognize and report potential threats; and verifies the cyber security and privacy practices of third-party business partners that handle PHI. Finally, information sharing and partnering can help to reduce healthcare operational and regulatory risks. Countries in the EU and elsewhere are working across governments and agencies to promote a more systematic approach to regulatory rule-making, monitoring, and enforcement.
Without exception, healthcare systems should continue to source and implement strategies that can help improve outcomes and hold the line on costs. While there is no such thing as the perfect health system, there are examples of good performance in most countries, which can provide valuable learning for all healthcare stakeholders.