The tipping point for medtech: Consumer demands, innovation, and reimbursement
By: Glenn Snyder – November 17, 2016
Today, the health care industry appears to be facing an inherent tension. On one side, many consumers – both as patients and caregivers – are demanding new, more efficient technology solutions. On the other side, medtech companies are still trying to figure out when and how to innovate under the new value proposition. While the incentives around value-based care are emerging, the health care industry is still trying to figure out its innovation strategies. This uncertainty has left many medtech companies assessing how best to invest in innovation while balancing the need to generate stakeholder value.
The growing aging population, higher prevalence of obesity and chronic disease, greater preference to age in the home, and increasing interest from caregivers are driving consumer demand for products and technologies. Deloitte’s 2016 Survey of US Health Care Consumers reveals that many consumers (seven in 10 surveyed) are interested in health care Internet of Things (IoT) technologies. Additionally, 82 percent of respondents reported that they would prefer to age-in-place rather than move to a care facility or in with a family member.
Despite personal hesitancy in using certain technologies, our survey found that more consumers say they are likely to use sensor technology, telemedicine, and remote monitoring technology when caring for others.
At the same time, health care reform and the move toward value-based care are fundamentally changing the system and how it pays for services and products. New payment models – shared savings, bundled payments, shared risk, and global capitation – are emerging. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is moving the industry in this direction even more rapidly than before – not only impacting physicians, but most health systems also.
Under new value-based care payment models, medtech companies have a new opportunity for reimbursement. Physicians may be willing to spend more on technologies and devices that can help them succeed under risk-based models – which will provide bonuses for physicians tied to improved patient outcomes.