Medical Devices: Healthcare's Heroes and Enemies

Recently I was asked to present at the annual meeting of the MDMA – The Medical Device Management Association. The program committee requested that I speak about the most significant changes over the last five years and what I am forecasting for the next five years. In addition, they indicated the audience of device inventors, investors, and regulators from CMS and the FDA, would be interested in exploring specifically how these changes would affect the development of ned medical device technologies.

As always, I open my remarks by indicating that we are in the midst of the most significant transformational changes in healthcare, a topic on which Royer-Maddox-Herron Advisors have written numerous blogs and will be the central theme in our book to be published shortly. The almost-radical changes, including the movement to patient-centric ambulatory care, same-day surgical procedures, and numerous virtual-medical monitoring devices, nave been driven mainly by three things:

  1. Non-Invasive Medical Devices
  2. Safer and less toxic anesthesia agents
  3. Home infusion devices for antiobiotic and chemotherapies

Hence, It was appropriate for me to let those in the audience know, because of their inventions and innovations , they are, first and foremost , the HEROES and drivers of significant changes in healthcare, raising significantly the quality and safety of medical outcomes.

However, I then also had to remind them quickly that medical errors, based on a recent study at Johns Hopkins, have been found to be the third leading cause of deaths in the United States, following heart disease and cancer, which in fact are both declining. In addition, our group, and many others, believe that 20% of medical care delivered today is unnecessary as a result of an overuse or misuse of medical treatments and devices. In the United States healthcare delivery has been driven by a competitive model so the same medical devices have been duplicated in medical centers and doctors offices located in close geographical areas. Because these devices must generate a ROI – a return on the investment – they are often used “because we have them”, rather than because the patient will actually benefit from their utilization. In such scenarios, these hero devices then become the ENEMIES, contributing to the rise of medical cost, medical errors, and even fatal outcomes.

If new medical devices and innovative technologies are going to be embraced by healthcare providers, they must embrace and support all componets of the values equation:

Value = [Clinical Quality and Safety + Service Quality] / Cost

Each device will need to prove, with easily retrieved metrics, that its use enhances: (1) quality and safety of the patient’s medical outcomes, (2)improves patient satisfaction because of less pain, same-day surgical potential, improved access, etc., and (3) reduces costs, including labor and supplies. If this value is not better than the value of a similar device already on the market, it is clear that payment reforms, being implemented by both commercial and governmental payers, will not pay for the new device. No longer will volume, often the driver of the misuse and overuse previously mentioned, be rewarded financially. And we all know, where the money flows so flows the technologies.

In addition to supporting the Value Equation, the most successful medical devices of the future would also have the following attributes:

  1. Collect data on an ongoing basis
  2. Assist in the analysis of the data
  3. Early warning signals that the device is not working properly or wearing out
  4. Ability to connect to present information technologies, including electronic medical records and iphones
  5. Support virtual medical technologies in both hospitals, ambulatory clinics, and in the home
  6. Support the stabilization of chronic diseases, so these maladies become a “way of life” rather than an illness
  7. Be feasible for a large group of people, assisting in population health management and the movement to well-care versus sick-care, and,
  8. Utilize genomics, chips, 3-D printers, etc.

Because medical devices will continue to be the driver of all components of the Value Equation, work must be done to overcome the challenges facing the innovative and risk-taking inventors and investors today. These include:

  1. The regulatory barriers embedded in the CMS approval and reimbursement process
  2. Poor communications between CMS and FDA
  3. Short-life span of many devices
  4. Capital availability in health systems
  5. Capital availability from willing investors
  6. Significant barriers on getting patent approvals due to that fact that many devices use information technologies pieces that are already patented, raising the question of ownership

As in all transformation journeys, which often require significant changes, there are challenges in developing enhanced technologies for the medical industry, But these challenges must be addressed and overcome so the HEROES will increase, and the ENEMIES will decline!

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