The healthcare space is getting a major influx of digital innovation, but much of it’s coming from outside the traditional parameters of the industry.
Companies like Apple (NSDQ:AAPL), Google (NSDQ:GOOG), Samsung (LON:BC94) and Salesforce (NYSE:CRM) are poised to eat medtech’s cake if the industry can’t keep up with digital platforms that have already taken hold in other markets.
Analysts at PricewaterhouseCoopers highlighted the top digital technologies that device makers need to master in order to avoid falling behind, including:
- Social media (not just for press releases anymore),
- Data mining (Big Data is nothing without analysis),
- Customer-facing mobile apps (not just for education anymore)
Medtech executives identified these technologies as valuable strategic tools, but three-quarters added that their companies were struggling to adopt them. Meanwhile, the stakes are only getting higher. Patients expectations are changing, as are the needs of providers and insurers.
"With outdated and unresponsive information technologies, traditional drug and device companies will have difficulty meeting the needs and demands of the next generation of consumers," according to the report. "If companies fail to embrace a digital strategy that fuels its innovation machine, they risk displacement from new competitors that will create more valued offerings, and they may miss opportunities to create new revenue sources."
Device makers are especially lagging behind in their use of social media, where peers in drugs, retail and technology are spending more time conducting campaigns around solving specific problems and creating open innovation channels with people outside the company. Conversely, device makers are more stringent on collection and evaluation of new ideas brought in through social media.
Device and drug makers cited social media as the most strategically important digital tool for shaping growth in the next 3-5 years, but retailers and tech companies are far ahead in merging social media with sales and other company data. That may be due in part to wariness in the industry in light of FDA rules governing social media communication with patients.
The industry’s big dogs, however, are already entrenched in the social space. Medtronic (NYSE:MDT) offers live chats with patients and publishes regularly on several blogs. CEO Omar Ishrak also operates his own Twitter feed where he posts on a regular basis, interacting with the online community. (The social-media-savvy exec even recently posted a video showing him pouring water over his head for the Ice Bucket Challenge.)
Social media channels also provide space for collaboration and idea-gathering, helping bridge gaps across divisions within a company and make room for "open and unstructured collaboration."
Companies can also keep an eye out for potential adverse events by watching for keywords on social sites, where patients may be more likely to "report" their issues.
"A recent study showed that Twitter had 3 times more adverse-event reports for 23 commonly used prescription medications than the FDA did during the same time period," according to the PwC report.
Gathering additional data is already a major movement among healthcare companies, but most are still having a hard time making anything from the numbers. More than 80% of device and drug executives cited data as a competitive advantage, but two-thirds were struggling to churn out some meaningful insight.
Some companies are turning to outside sources of data to enrich their view into customers and patients and others are investing in data visualization programs to help tease meaning out of the numbers.
Mobile products are another important void in medtech’s digital toolkit, with most companies still focusing on technologies dedicated to education rather than co-creation.
"Consumer education has been the focus of most drug and device companies’ mobile strategies, but companies may be missing opportunities to use mobile technology in other ways that bring greater return," according to the report. "While 36% of drug and device companies say they mainly use mobile technology to inform and educate customers, only 6% say they use it to gather and co-create new product and service ideas."
The industry’s major players are already putting major skin in mobile technologies, including apps that pair with devices (to track blood sugar readings or record inhaler use) and gamified products to drive patient engagement.