By Greg Reh, vice chairman, US and Global Life Sciences leader, Deloitte Consulting LLP
Think about this: There are now more than a half a billion types of medical devices manufactured around the world.1 Through the Internet of Things (IoT), a growing number of these devices are collecting, analyzing, and transmitting health data or images to the cloud or to internal servers. Over the next decade, as many as 50 billion medical devices will connect to clinicians, health systems, patients, and to each other.2
Last month, our UK Centre for Health Solutions released a report that examined connected medical devices and their potential to transform health care. Within the next five years, medical technology companies anticipate that 68 percent of their devices will be connected through IoT, up from 48 percent now, according to an online a survey Deloitte conducted with 237 companies. Within five years, 44 percent of respondents predicted that all of their devices will be connected, according to our research.
Challenges and opportunities for medtech
Devices that diagnose, monitor, and help treat patients touch every part of health care. The connected-medical-device market is expected to more than triple, from $15 billion in 2017 to $52 billion by 2022, according to the research firm MarketsandMarkets.
Our research identifies eight challenges that medtech companies should consider addressing as they transition from being suppliers of innovative products to insightful partners in health care.
- Developing an in-depth understanding of end users: As the idea of value-based care gains more traction in health care, stakeholders will likely push medical technology companies to demonstrate the value of their products.
Solution: Manufacturers of connected medical devices should forge closer ties to health system leaders, clinicians, and to patients who rely on their products. They should build new business models and scenarios that demonstrate how their devices can improve patient outcomes and create value to stakeholders. Nearly 40 percent of medtech companies are, to a large extent, taking a value-based approach to their pricing, according to the results of the survey.
- Building funding, business, and operational models: Only about half of surveyed medtech companies say they are implementing new business models to a large extent, while just 10 percent of respondents said they are not adding any new models.
Solution: The fee-for-service payment model does not reward health systems or clinicians for their ability to prevent illnesses or to avoid long-term costs. We are probably still years away from having a value-based health care system that effectively rewards innovation, but the industry is working toward it. We recently worked with the Advanced Medical Technology Association (AdvaMed) to launch a strategic value initiative—a framework that assesses the value of medical technologies that can be adopted by medtech companies, health systems, health plans, and other industry stakeholders. Innovation will likely require different business models, and progress will depend on medtech companies developing new ways to take on risks and rewards.
- Improving interoperability: If health care stakeholders are to take full advantage of connected medical devices, interoperability could be critical. Interoperability can be a significant barrier to creating a patient-centered, digitally-enabled health care ecosystem. There are privacy and security challenges associated with the exchange of health information, and there is no single standard for electronic health records (EHR) systems. There is also little incentive for the private sector to move toward a more interoperable system.
Solution: Open platforms, based on open-data standards, could allow health plans, health care providers, and technology vendors to come together to make data more available to each other. Stakeholders should work toward developing a unified platform through which clinical data can be shared. They also will likely need to develop a consensus for interoperability standards.
- Maintaining cybersecurity: Nearly 70 percent of medical device manufacturers say an attack on their medical devices is likely, but just 17 percent of those companies are taking significant steps to thwart cyberattacks, according to research from the Ponemon Institute.
Solution: Our survey results indicate that most medtech companies are working to maintain the security of their connected devices. More than 80 percent of respondents said they were “reasonably well prepared” (44 percent) or “very well prepared” (37 percent) to protect their devices. Just 14 percent of respondents indicated that they were “not very well prepared,” or “not at all prepared” to protect their devices from a cyberattack. Medical device manufacturers should consider adopting a “security-by-design” approach where a device is built from the ground up to be secure, rather than having security features added after it has been delivered and deployed.
- Navigating regulatory change: A variety of security issues related to connected medical devices has prompted new regulations and guidelines that medtech companies need to navigate.
Solution: Survey results indicate that medtech companies are prepared to comply with regulatory changes. Forty-three percent of respondents said they were “reasonably well prepared,” while 39 percent said they were “very well prepared.” Medtech companies should build strategies to engage with regulators on their innovation models. They should also consider involving clinicians and patients when designing products. The US Food and Drug Administration’s (FDA) initiatives to develop a more collaborative approach to innovation could provide a path for regulators outside of the US to follow.
- Attracting digital talent: There is some concern among stakeholders that they might lack the skills needed to deploy connected devices, which could hinder market growth. To stay competitive, medtech companies should build a tech-savvy workforce.
Solution: Nearly 80 percent of surveyed medtech companies said they are prepared to build digital capabilities within their companies. Resourceful recruitment and retention strategies could include collaborations and partnerships with a diverse range of existing and emerging players (e.g., academia, engineering companies, technology firms, and innovative new start-ups).
- Maintaining trust in a digital age: The success of connected medical devices can hinge on the willingness of patients to share their health data. This is probably less likely to happen if patients aren’t sure how their data will be used. As more devices become connected, medtech should be vigilant in protecting patient data. In a My Take a year ago, I wrote why medtech companies need to make sure patient data are secure.
Solution: Medtech companies should earn the trust of providers and patients by developing strong privacy and security arrangements through the use of data encryption and authentication mechanisms. They should also give patients control over their own data (including the right to keep it from being shared), and allow the patient to see who is using data and for what purposes. Nearly 70 percent of surveyed medtech companies agree that patients will eventually own their health data. Embedded blockchain-like technology could offer a real-time mechanism for tracking how data are processed.
- Improving the adoption of medical technology: More than 70 percent of medtech companies said health care systems and clinicians are not yet prepared to use data generated from connected medical devices. According to our recent surveys of US health care consumers and physicians, half of consumers use technology to track their health information and 53 percent said they shared this information with their doctor. However, only nine percent of providers have implemented technology for remote monitoring and/or integration of data from wearables, and just 27 percent intend to add this capability within the next couple of years.
Solution: Medtech companies should provide health care stakeholders with robust and reliable evidence that the data generated by their devices can reduce costs, improve efficiencies, and lead to better patient outcomes. They also should demonstrate that the devices are intuitive and easy to use, and, when necessary, offer training and support to staff.
As connected medical devices become more sophisticated and mainstream, we can move closer to having an interconnected health care system. Along with allowing clinicians to change how and where medical care is provided, connected medical devices have the potential to gather, analyze, and share data that could help improve our understanding of patients and their diseases.
1. European Commission, Fact sheet: New EU rules to ensure safety of medical devices
2. IBM Institute for Business Value, http://www-935.ibm.com/services/multimedia/GBE03620USEN.pdf