While the Affordable Care Act could lead to improved partnerships between medtech manufacturers and hospitals, a new survey and report from ZS Associates indicates that hospital execs aren’t convinced that such partnerships will help them meet their needs.
The passing of the ACA has led to a shift in focus in the healthcare industry towards patient outcomes, which means that medtech companies will need to transition from serving merely as suppliers to becoming partners with hospitals, according to the report.
With a shifted focus to outcomes, medtech vendors will need to adopt new value propositions that emphasize outcomes over products to be able to capture their share of the value created with the changes.
But many hospital execs still aren’t convinced that partnering with medtech vendors will help them meet their biggest priorities, according to information from a survey in the report.
“The industry needs to boost hospital executives’ confidence that medtech manufacturers can function as more than suppliers, partnering with the hospitals to improve the total patient experience and helping ensure quality outcomes,” ZS Associates wrote in the report.
The survey of 85 U.S. hospital executives reported that the hospital execs aren’t expecting to see a huge shift away from cost reduction within the next 2-4 years, but that cost reduction efforts have shifted to achieving outcomes and minimizing medicare penalties and away from reducing the cost of medtech goods.
This is due to CMS’s risk-based payment model, which puts hospitals to bear for the costs from hospital-acquired infections and poor outcomes, as well as rating the hospital’s performance against quality metrics to determine its reimbursement rate.
This gives medtech companies an opportunity to change their relationships with customers and “design innovative ways to create value.”
The survey indicated that while more than 50% of departmental stakeholders think medtech firms can help with innovative tech and new procedures and treatment methodology, less are convinced that medtech companies are ready to take on “a more ambitious agenda.” Only 40% believe medtech firms can help with reducing hospital-acquired infections and rehospitalization and only approximately 33% believe medtech can help with priorities such as operational efficiency.
The report suggested that to become valuable partners to hospitals, medical device companies need to rethink their value propositions, identify and refine the key capabilities necessary to deliver value and transform their go-to-market strategy.
No one approach will work for all companies, according to the report, and not all companies, and hospitals, will want partners. And even firms with partners may take time to develop the mindset to create effective partnerships.
But the effort will be worthwhile for the companies, according to the report, as hospitals shift their attention to lowering costs via performance rather than price.
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