Review MedTech Products, Customers, and Trends
Learning Objectives
After completing this unit, you’ll be able to:
- Describe the main categories for medical devices.
- Identify the MedTech industry’s most common customers.
- Identify major trends impacting MedTech companies.
Medical Technology Products
Medical devices and technology range from cotton swabs to robotic surgery devices, simple to complex, and inexpensive to really expensive. Let’s simplify a long list of products by medical device category.
| Medical Device Category | Description |
Examples |
|---|---|---|
|
Implantable devices |
Devices that repair, replace, or enhance a system in the body |
|
|
Surgical devices |
Instruments that surgeons use to perform intricate tasks in surgical procedures |
|
|
Imaging systems |
Equipment, techniques, and processes for seeing the interior of a body for clinical analysis and medical intervention |
|
|
Diagnostics |
Devices that examine patient samples to provide information for diagnostic, monitoring, or genetic purposes |
|
|
Wearable and monitoring systems |
Sensors that monitor the patient, usually with wireless communication, as part of a wearable item that attaches to the body |
|
|
Durable medical equipment |
Equipment that provides therapeutic benefits to a patient with certain medical conditions or illnesses |
|
There are thousands of medical technology products and services, and getting comfortable with these product categories is a great place to start. Now, let’s talk about who buys these devices.
MedTech Customers
Many of the healthcare sectors serve the same customers, so you may be familiar with this list. Medtech customers include:
- Payers
- Providers
- Patients
- Distributors
Let’s learn more about all four customers and how they impact the med devices industry.
Payers
Med device companies face a long and complex process to get their products to market. They need regulator approval, plus payers to cover and reimburse providers and patients for the devices.
Med device companies convince payers to cover their products by working with stakeholders such as advocacy groups, providers, and professional medical societies. In some cases, these stakeholders provide the FDA with clinical evidence of a device’s safety and efficacy. These stakeholder groups play an essential role in bringing products to market. Let’s get to know some of these groups to see how they influence payers.
| Stakeholder |
Role |
How They Influence Payers |
|---|---|---|
|
Patients and patient advocacy groups |
Drive the adoption of new medical treatments. |
Med device companies work with organizations to convince payers to bring a product to market. For example, they might work with a global diabetes research organization to bring an artificial pancreas to market. |
|
Providers |
Are willing to use the device and advocate for its adoption, which means changing the way doctors do things now. |
Doctors need to be willing to change the way they do things. For example, cardiologists adapt to using a stent that can be absorbed into the body instead of a metal one, which positively impacts patient outcomes. |
|
Professional medical societies |
Are willing to update their guidelines to include new devices once enough clinical evidence is provided. |
Med device companies need organizations like a national association of physicians to update their guidelines. If they’re willing to do this, payers are more likely to cover the device. |
There are definitely more tactics that med device companies use to work with payers to cover their products, but this is a good start. Let’s move on to providers.
Providers
Many med device products—such as surgical apparel, wound dressings, or surgical trays—are like commodities. They’re easy to manufacture, and there’s not much difference from supplier to supplier. They have low profit margins, so securing long-term, high-volume supply contracts with large hospital chains is vital.
However, other high-tech devices—like advanced diagnostic imaging or robotic surgical instruments—are different. These products are more likely to be evaluated by a value analysis committee (VAC). Taking a multidisciplinary approach, a VAC includes staff and providers to evaluate devices.
Individual doctors are also influencers. When orthopedic surgeons perform knee surgery, they decide what to use during the procedure. Based on their experience and product preference, they select the device unless the hospital’s purchasing department doesn’t approve that product.
Patients
Patients buy and pay for certain medical devices out of pocket, like ankle braces or mobility support devices. Patients are also considered customers because of their influence on many MedTech selections.
Take a glucometer, a device that measures blood sugar in people with diabetes. The patient chooses the device they want. Maybe they have a coupon, or they prefer a smaller size. Similarly, patients may see the direct benefits of a specific device and discuss it with their doctor.
Distributors
MedTech companies work closely with distributors specializing in supplying large amounts of products to hospitals and care facilities. While patients, providers, and payers play a leading role in which products are ultimately used, MedTech companies often work with distributors to make sure their products are supplied where needed.
In a world of business review sites, customers have access to a lot of opinions. Med device companies need to produce high-quality products, sell them at fair prices, and provide outstanding service to keep customers happy.
Pack your first-aid kit with this knowledge of med device categories and customers. Next, we talk about trends and challenges.
MedTech Trends and Challenges
What’s exciting about the MedTech sector is the speed of innovation. With the help of patients and doctors, med device companies improve products all the time. You might say change is a constant trend!
Let's look at other trends and assess the challenges affecting this ever-changing sector.
Trend: Patient outcomes are the focus.
Why it’s happening: Reimbursements are changing due to the emphasis on value-based care, which means a new focus on quality and outcome over usage.
Why it matters:
- Med device companies are moving toward being more service-focused and not just product manufacturers.
- Established patient communities and greater education on using products lead to better patient outcomes.
Trend: Revenue growth is projected to be modest.
Why it’s happening: The number of potential users for devices is growing, but market forces and external pressure often lower prices.
Why it matters: Hospital boards and buying committees work to streamline device purchases. This competitive bidding process makes it difficult to increase prices.
Trend: Buyers are consolidating.
Why it’s happening: Hospitals are consolidating into larger health systems, creating group purchasing organizations with stronger purchasing power.
Why it matters:
- Research shows hospitals perform better when there’s less competition on where to receive care.
- There’s been a decline in medical device revenue per admission following hospital acquisitions.
Trend: Wearable technology is on the rise.
Why it’s happening: Wearable technology is expanding.
Why it matters: This technology requires closer connection to patients and systems to collect, monitor, and analyze patient data.
Trend: Cybersecurity vulnerabilities are an increasing threat.
Why it matters: Hackers and criminals threaten security systems.
Why it’s happening: Med device companies must ensure compliance and security for all products and systems that are exposed to cyber threats.
The MedTech sector has technology built into its DNA, focusing on speed and innovation. Expect change in the MedTech industry to be persistent as the sector responds to significant trends.