According to Rajesh Parekh, Senior Partner at McKinsey & Company, “ecosystem” is a widely used word in the tech world. Now it’s coming to the medtech space.
So what is an ecosystem? How can medical technology companies leverage this to provide better care and better patient outcomes? How can they do it quickly in an ever-changing environment? Three top medtech leaders joined Parekh at AdvaMed’s MedTech conference in Boston to try to explain this.
Geoff Martha, President and CEO of Medtronic, Lisa Earnhardt, Abbott’s Executive Vice President for Medical Devices, and Mick Farrell, CEO of ResMed, gave their perspective on ecosystems in space.
What is a healthy ecosystem?
Earnhardt said an ecosystem brings together a variety of stakeholders to generate value in space. This represents value for the patient and the customer.
A 25-year veteran of the medtech space, Earnhardt said a traditional view centered on being a medtech company, having a product and delivering it to a hospital or supplier. This two-way relationship should no longer be the norm, however.
“The real opportunity is to come together as an ecosystem, if you will,” Earnhardt said, “come together as an ecosystem to really create value, each bringing their unique strengths, assets and capabilities to Table.”
Martha said bringing all types of devices and technologies together and making them as integrated as possible facilitates an efficient workflow. It also produces better results.
“There is a difference between being connected and being integrated,” he said. “It’s really about generating better outcomes, not just for patients, but also for workers and healthcare systems. We have several different areas that we will be working on.
Farrell said ResMed aims to enhance a term he’s heard a lot — “data lakes” — with “data sinks.” These wells for the developer of respiratory devices provide an in-depth set of data on sleep, suffocation, sleep apnea, COPD, neuromuscular diseases and respiratory failure.
He said ResMed sees patient data for 33% of their life, from bedtime to waking up. The remaining 67% are not taken into account. That’s where an ecosystem comes in with cardiovascular outcomes, surgical outcomes, wellness outcomes and more.
“I see an ecosystem as combining ResMed data sinks with Medtronic data sinks and Abbott data sinks,” Farrell said. “And it’s not just in medical technologies, but also in technology companies.”
Recognize needs and seek better results
When asked how to take technology from concept to difference maker, Earnhardt gave the example of Abbott’s FreeStyle Libre continuous blood glucose monitor (CGM) for diabetes.
Everything revolves around the needs of the patient. Abbott acknowledged that CGM’s capabilities help people with diabetes. However, limiting the technology to just CGM would leave the company “below potential”. So, it has partnered with insulin pumps and coaching platforms to expand the ecosystem.
“It brings the whole ecosystem together to put the patient at the center of their needs,” Earnhardt said. “It gives them the information they need, when they want it, wherever they are.”
Farrell pointed to the decision to give patients their data for free. Patient engagement — one example he gave was gamification through things like TikTok — creates better results.
“We liberated the data and then provided every person in the ecosystem with a way to extract value from it,” Farrell said. “Then they selected our products. Doctors prescribed it more. Patients demanded more from their doctors. It created value that went beyond our space and went into their diabetes care, their cardiovascular care. »
Business model changes
Parekh asked executives if the growing ecosystem is changing the way medtech companies do business. Martha had no doubts – “it totally changed the business model”.
For example, Martha said the shift from open surgery in the spine industry is moving towards companies with ecosystems and committed to scaling the space. This disrupts the industry, he explained. Likewise, as Farrell also pointed out, the software-as-a-service (SaaS) model adds another wrinkle.
“It’s based on that ecosystem, and we’re not there yet in full transparency, but you can see the path it’s started with the shift in market share,” Martha said. “It all started with lower costs and better results. You start to see better results and economic results as well. And then the next phase, which we’re just starting to get into, SaaS models and things like that, a real shift to the payment model. I see it coming, but we’re not there yet.
Farrell said SaaS can be part of the healthcare ecosystem. In fact, he said, ResMed has been using it successfully for seven years and recently invested more in it. But it involves using the strengths of others within the ecosystem.
“You can do it, but you don’t invent them all yourself, and it probably won’t come from your biomedical engineers,” Farrell said. “It will probably come from someone outside of your ecosystem. “Reach out, partner with them, and then find a way to make it part of your set of values.”
Meet the objective and recruit talent
Martha explained that it is important to think about the “purpose of what we do”. It’s “innovation with a purpose,” he said.
This implies a need to “play attack” and attract talent to medical technology. Historically, he said, the talent he’s talking about revolved around “big tech.” To establish this ecosystem, Martha wants to bring these people into medtech.
“It’s about wanting to work for a company that stands for something, that contributes to society and in a meaningful way,” Martha said. “When it comes to health care and medical technology, we are blessed with that. We’re working on cutting-edge technologies, and our products are becoming more and more data-driven, and they’re getting cooler – if you want to put it in that context – day by day. So you have the goal.
This “cool” factor is a driving force in attracting talent to medical technologies. Earnhardt joked that she thought medical technology had always been cool, but “just didn’t take credit for it.”
She sees it as a “phenomenal opportunity” to recruit based on new perspectives and capabilities. Earnhardt also sees an opportunity to partner in a way that perhaps the industry hasn’t felt comfortable doing before.
“The beauty is that you’re starting to see more companies that really want to make an impact here because that’s exactly what we do every day,” Earnhardt said. “I am encouraged by the state of the industry. There’s a lot of complexity there. One of the challenges that we never talked about was kind of this need for speed. How do you reconcile the need for speed and the environment in which we find ourselves?
“Maybe it’s a whole other sign.”
