Many medical devices generate a ton of data, but until recently this data has largely been left to go into the ether instead of the ethernet. Complexities around HIPAA and liability concerns, among other worries, seem to have frightened device companies out of utilizing this potentially valuable asset, if they even know what to do with it in the first place. But times are a-changin’ and some big device companies are beginning to make noises about putting the power of data to work. In Boston Scientific’s recent presentation at the JP Morgan Healthcare Conference company execs called out the “convergence of devices and informatics” as a market tailwind for its future success (what BSC offering will be riding this tailwind exactly is unspecified).
A glimpse at the emerging “big data” strategies of medical device companies shows their approaches to be falling under five major, though not mutually exclusive, categories:
- New Revenue Streams: The business models enabling companies to “monetize” their data might include charging hospitals or payers for access to and/or management of the data, or providing services such as post-discharge patient monitoring.
- Product Improvements: Companies could use data streaming off their devices to guide product enhancements and next gen platforms that deliver better performance, and therefore are more competitive in the marketplace.
- Outcomes Benefits: Processed data from a medical device might direct physicians, patients or caregivers to take steps that, in turn, increase the “efficacy” of the underlying device. An example is St. Jude’s effort to use data from an implanted cardiac assist device to indicate the need for heart failure medication, now being studied in the LAPTOP-HF trial.
- Liability Protection: Careful review of data from medical devices for purposes of post-market vigilance can detect device problems quickly before too many devices get out there, limiting the magnitude of any unfortunate recall situation.
- Operational Efficiency: Medical devices of the future will be able to tell you where they are, or are not, which can greatly streamline inventory management, sales targeting, and compliance with device traceability requirements. Think of Walmart as the role model here!
So why is now the time for medical device companies to start cranking up their data wonks and make something of their repositories?
Companies need something new. Medical device companies are in dire need of some “tailwinds” to combat the many headwinds blowing against the industry. The traditional medical device business model of charging for capital, disposables and maintenance is under increasing scrutiny, particularly as the aging fee-for-service reimbursement framework shifts towards capitated, episode-of-care payment. While all the doom and gloom of late may be a bit exaggerated (every sector goes through cycles), a new reality of growing price pressure and clinical data requirements is emerging. If the established medical device companies can’t figure out how to augment their value propositions and revenues with device data & analytics, some scrappy new competitor will get the job done!
Providers could use some help. With hospitals and health systems increasingly on the hook for patients between acute care visits, care providers will be desperately looking for ways to keep patients healthy and out of the hospital. Implanted devices could get drafted into overtime duty, reporting back to clinicians on device performance and patient status, potentially over the entire lifecycle of a disease. Electronic health records, which thanks to a variety government carrots and sticks, are finally becoming entrenched in the US, will enable this vision to be realized. There is speculation that the EHR Stage 3 Meaningful Use criteria, slated for implementation in 2016, will include the incorporation of the Unique Device Identifier data into the EHR, opening the door to creative combining of patient and device data for improved outcomes (and comparative effectiveness research, by the way).
Consumers are taking interest. The old days of patients relying solely on their doctors for assessments of their medical conditions and selection of treatment options are over. We now live in a land where just about every patient “Googles” her disease and comes armed with opinions to her doctors appointments. Smartphone “health apps” are cropping up everywhere, with more ways to measure one’s own health status than frankly any of us might want (though I admit to having a scale that connects to the cloud). Some consumers are demanding access to the data coming off of their implanted devices, stirring up controversy on the application of HIPAA to a patient’s own data.
With the combined force of industry push, and provider and patient pull, a path to beneficial use of the mounting heaps of data from medical devices will be carved. The hurdles of safety, privacy and liability will get figured out much as they do in every other economic sector that stands to gain from data analytics, which is just about all of them.
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