Should medtech consider a new go-to-market model?

By Neal Batra, principal, and Andy Davis, principal, Deloitte Consulting LLP

It has been more than a month since we returned from the annual Consumer Electronics Show (CES) in Las Vegas…and we are still marveling at some of the health innovations we saw there. We also noticed that a growing number of health-related devices are being marketed directly to consumers—rather than to health systems and clinicians. As consumer-focused companies move deeper into the health care space, they are challenging medtech’s traditional go-to-market model.

We last attended this event in early 2020, a few months before COVID-19 was declared a pandemic (see Your Toothbrush has Some Important News!). While there were fewer exhibitors, fewer attendees, and a little less sizzle this year, CES remains an important event—particularly for innovators who are bringing the Future of Health^TM closer every day.

More than 100 health companies participated in this year’s event, according to the Consumer Technology Association. As we perused the exhibit hall, we examined and tested a number of devices that line up remarkably well with Deloitte’s vision for the Future of Health. Andy tried on a headset developed by Boston-based Neurable. The device, which resembles a standard pair of headphones, can play audio and take phone calls. It also has sensors that translate the user’s brain activity into actionable data. When Andy tested the device, we could clearly see that his attention was highly focused as he worked through some math exercises, but it plummeted whenever he was interrupted. This device could be used to diagnose and treat attention deficit hyperactivity disorder (ADHD). People who have ADHD often don’t realize when they’ve lost focus. Neurable says it is starting to collect information that could lead to the detection of depression and other chronic conditions such as Alzheimer’s disease (see We Talked About the Future of Health…Now We’re Living It).

Here are a few other consumer-centric devices that caught our eye:

• Abbott: During his keynote address, CEO Robert Ford introduced Lingo—a new line of consumer biowearables that the company is developing to continuously monitor key biomarkers (e.g., glucose, ketones, and lactate) to help improve general health and wellness. The user can monitor the information through an app on a smartphone. “Your body is constantly talking to you, and now it’s time to listen,” Ford told attendees. The medical device manufacturer also demonstrated a handheld blood test that can help assess brain injury. Concussions account for about 4.8 million emergency room visits each year, according to the company, and about half of all concussions go undetected or are misdiagnosed. An accurate rapid test could reduce the number of unnecessary CT scans, and help health care workers triage and treat patients more quickly, which could reduce wait times in the ER.
• CareWear Corp.: The company’s wearable is used in the management and recovery of soft-tissue injuries and pain. The flexible device attaches to the skin and uses pulsed blue and red light-waves to penetrate the skin, which helps to relax muscles and decrease pain and inflammation. This device also helps to reduce recovery time for surgeries or injuries. It also could be used to help people recover from addiction. The company says it is currently working with college athletics programs and professional sports teams.
• Vivoo: This at-home test analyzes the user’s urine to provide personalized, easy-to-understand lifestyle and nutrition advice for smart health choices. Vivoo tracks a wide range of parameters crucial for optimal health: hydration, urine pH level, magnesium, calcium, vitamin C, salt consumption, UTIs and others. By scanning the test via the VivooApp, data can be viewed via the user’s smartphone in less than two minutes without any lab service required. Subscribers receive four test kits monthly, allowing them to see how changes in diet, lifestyle, and exercise impact their bodies.

Consumers are an untapped place to market

There is a perception that people will continue to rely on their physician for care and medical advice. The vast majority of health start-ups at CES were hoping to generate interest by catching the attention of health systems, clinicians, and health plans. While those stakeholders still control the continuum of care and reimbursement today, the traditional model could break down as data and technology make it possible for people to detect illnesses early, or take steps to prevent them altogether. As we noted in our report, Breaking the cost curve: The future of health care spending, we anticipate that emerging technologies, an ability to cure and prevent disease (or detect disease in the earliest stages), and highly engaged consumers will lead to a deceleration of health spending in the years ahead.

At this point, however, few medtech companies market their products directly to consumers. We expect this dynamic could change as venture capitalists and other investors recognize the growing value of consumers who are empowered to make decisions about their own health. In addition, launching a health device aimed at consumers could be less expensive than developing a regulated medical device and could provide a faster path to generating revenue.

Consider this: In 2008, Fitbit was named the best new product in the Health & Wellness category at CES. It wasn’t long before millions of Americans were seeing how close they could get to 10,000 steps each day. Today’s fitness trackers do much more than count steps or heart beats. They can count calories, monitor sleep quality, measure blood oxygen saturation, and collect other granular pieces of health information that could help prevent future health issues. The smartwatch might be one of the most successful medtech devices in history, but it was developed for (and marketed directly to) consumers. One in five US adults regularly wears a smartwatch or fitness band, according to the Pew Research Center. Moreover, smartwatch shipments increased nearly 50% in the second quarter of 2021, according to Strategy Analytics.

While going after the consumer market might be a faster path toward having a regulated medical device, transitioning from a traditional business-to-business model to a business-to-consumer model requires a radically new way of thinking. Can medtech start-ups show us where the future of health is headed? Deloitte recently analyzed a database of 1,000 start-ups and interviewed company leaders. See our report here.

We are in the early innings of this game. The first couple innings will likely revolve around devices that gather data, and companies that developed fitness trackers and health sensors will likely become data conveners. The middle innings will likely focus on the insights that are generated by the data, which will require connecting datasets together. The final innings might focus on making those insights actionable. For example, how can data be used to influence healthy behaviors and better health outcomes? There could be some long innings ahead, and we might even see some extra innings as this game plays out.

Return to the Health Forward home page to discover more insights from our leaders.