Irish company Pharmapod is taking a lead role in significantly reducing medication and medical errors worldwide.
Over several years of working at a high level in the pharmacy sector, both in Ireland and across Europe, Leonora O’Brien, Pharmapod’s CEO, became aware of what she refers to as “a silent epidemic”.
“I saw that there were a lot of medication errors happening – no organisation is immune to errors – but there was no platform through which the professions could share their experiences and learn from the mistakes, so the same mistakes were being repeated, at a huge human and financial cost,” says O’Brien.
The issue, which impacts millions of lives daily, prompted Leonora to leave her job and set up Pharmapod to develop a Global Learning Health System as a platform for reducing medication errors. The result, launched in 2012, is a cloud-based software-as-a-service system incorporating artificial intelligence tools for the management of patient safety incidents and continuous quality improvement.
Pharmapod’s unique approach
Pharmapod enables pharmacies and healthcare professionals to record, review and analyse patient safety incidents quickly and securely. It’s the first international platform of its kind to pool and share patient safety data across borders, monitoring trends and the causes of medication errors, empowering healthcare professionals locally to improve their practice.
“Our approach is unique in a number of ways. Firstly, we think without borders, so we’re giving healthcare professionals an international forum to share data, learn from it and develop proactive actions to prevent errors from happening. In addition, we can feed back information about risks in real time to professionals to help them learn quickly and efficiently. Our alert system is designed to send highly specific and relevant analysis to pharmacists, so they don’t have to spend time wading through masses of information to find the learning they need to make improvements,” explains O’Brien.
“Our powerful Datawarehouse can generate reports in real-time. These reports can be run by a local organisation or by stakeholders on a provincial, or national level. For example, in Canada, we have a local Response Team in place, a team of pharmacy professionals and patient safety domain experts who review the reports and identify any trends or significant risks. They also develop recommendations for the pharmacies to help prevent these errors recurring. Teams on the front line can learn reactively from what has happened in their local practice, or local group, but we can also feed through learning from other healthcare environments and, indeed, other countries.”
The learning can also be shared with schools of medicine and pharmacy, ensuring that new pharmacists and healthcare professionals are armed with the information they need to help them avoid making medication errors.
The award-winning solution, created by a team of pharmacists and technology experts, is now in widespread use in the UK, Ireland and Canada across healthcare environments including community pharmacy, long-term care and hospitals. Recently, the company celebrated a milestone event when it signed a partnership with the International Pharmaceutical Federation (FIP), recognised as the leader of pharmacy at a global level, and representing over four million pharmacists and pharmaceutical scientists around the world.
“In response to the World Health Organization’s Patient Safety Challenge to reduce medication errors by 50% over the next 5 years, FIP and its member organisations are taking a lead role in developing and adopting effective solutions to improve processes across the healthcare system and prevent patient harm,” explains O’Brien.
“What is needed is a robust infrastructure that can provide the data to achieve that goal and Pharmapod can provide it. Without data, we cannot measure the improvements made – with the Pharmapod platform the FIP are working towards measurable tangible outcomes. By harnessing technology, we can strengthen communications across the pharmacy profession, helping pharmacists to share their expertise and accelerate improvements in practice.
“At the FIP, the World is split into six geographical regions, in keeping with the World Health Organisation categorisation. We are identifying which regions and countries are ready to implement a solution and engaging with stakeholders on a national level. The Pharmapod solution is then rolled out on a country to country basis. It’s a very exciting time for both the Pharmapod and FIP teams.”
Accelerating international learning
National level engagement is a significant dimension of Pharmapod’s approach to reducing medication errors. As well as providing its sophisticated software, the company aims to set up Response Teams in every market. The first team has been set up in Canada, where over 4,500 pharmacies are involved in the country’s largest medication safety programme, using Pharmapod’s platform.
“We are taking data collection to the next level by looking at how we can respond to findings. The Response Teams are developing recommendations that can be shared with pharmacies locally and internationally, accelerating the learning from country to country,” says O’Brien.
Pharmapod has succeeded in creating a hugely positive network of healthcare professionals united in shared goals – the safety of patients, driving efficiencies and real peer-to-peer sharing of experience and learnings.
“All along the patient journey there can be risks. Although Pharmapod is best known for addressing medication errors, our system is a full Quality Management System, so it can also deal with medical errors in a hospital environment, safety risks such as slips, trips and falls, as well as providing a full documentation management system for quality procedures, internal and external reporting and inspection processes,” says O’Brien.
“Organisations are identifying weaknesses in their systems and can run reports at the click of a button to demonstrate the improvements that have been made. It drives efficiencies, delivers a healthy return on investment and drives a culture of patient safety across the organisation”.
It seems like a simple premise – the patient should be at the centre of their care regime.
In practice, it can be anything but. The patient revolves around, and is processed by, fixed assets, fixed regimens and a healthcare system that often, by necessity, reverts to a one-size fits all model.
Innovation in Ireland’s medtech sector is driving a new way of meeting the growing demands of a changing population, as an aging cohort brings new care demographic challenges, such as chronic illness and constant care requirements.
A digital connected healthcare system will do much to meet this demand, by using the power of connected tech, linking patient data silos and allowing primary caregivers to move from episodic intervention to personalised and more effective prevention and management.
What connected healthcare looks like today
Devices as simple as smartphones, smartwatches and tablets, linked to monitoring apps, drug regimens and patient data are at the vanguard of individual connected healthcare. The challenge is to integrate these into the daily routine of a national connected healthcare system.
Ireland’s healthcare ecosystem is well-placed and already delivering innovations in the medical, healthcare and life sciences sector.
The medtech sector in Ireland has experienced growth at an exponential rate over the past decade. The sector has grown from 50 to 350 medtech companies within 20 years. Currently, 15 of the top 20 global medical devices companies have a base in Ireland. The sector employs 38,000 workers throughout the country – the highest number of people working in the industry in any country in Europe, per head of population.
Ireland possess world-class capabilities in research with intensive collaboration between companies, research institutions and clinicians. This makes Ireland a perfect platform for the industry to start, innovate and continue to scale as one of the five global emerging hubs for the medical technology sector.
Building on two decades of investment in science and technology, the Irish Government is currently implementing a strategy called Innovation 2020. One of its main aims is to ensure that companies based in Ireland outperform competitors in international markets. A key target of the strategy is to grow the number of research personnel in industry by 60% to 40,000 by the end of the decade.
This sees Irish connected health start-ups benefit from a desire among local healthcare providers to adopt and embrace new technology.
Key decision makers are adopting and implementing change. Ireland’s national Health Service Executive (HSE) is working closely with industry to embrace and implement connected healthcare devices in situations in which clear operational or financial benefits accrue.
As a result, Ireland’s connected healthcare ecosystem is proving increasingly productive, with state agencies, academic research institutions and health bodies working closer with industry than ever before.
The Irish-based European Connected Health Alliance actively promotes and supports the connected healthcare agenda through its presence in more than 40 countries. ECH Alliance events are the perfect forum for investors, partners and start-ups to engage with leading experts from government, education, multinationals and the indigenous sectors.
HIHI facilitates and accelerates the commercialisation of innovative healthcare solutions by offering companies the opportunity for pilot and clinical validation studies and the health service access to innovative products, services and devices that they may not otherwise be exposed to. HIHI is built on the recognition that collaboration with enterprise can benefit patient care, patient pathways and outcomes; a key driver for connected healthcare.
The ecosystem would be nothing without the skill sets to grow. The Irish Medtech Association offers a Connected Health Skillnet that offers learning, development and networking opportunities.
This innovative ecosystem is why Ireland’s prescription for delivering connected healthcare is in rude health.
Irish company Critical Healthcare has signed a deal worth €10 million over five years with the leading international private provider of emergency services in Europe. The announcement was made by Minister of State for European Affairs Helen McEntee at a St. Patrick’s Day reception hosted by the Irish Embassy in Copenhagen at the weekend.
Critical Healthcare provides a comprehensive range of medical products and services to ambulance providers and the pre-hospital market across Ireland, the UK and Europe.
It has completed the deal with Falck, who has over 100 years of history within emergency, assistance, safety and healthcare services. Falck is the leading international private provider of emergency services and the only intercontinental ambulance provider.
Headquartered in Denmark, Falck has operations in 35 countries and its 2,500 ambulances respond to four million emergency calls every year. The company also provides many other pre-hospital services, including emergency helicopters and rapid response units with paramedics, nurses and doctors.
Rapid growth at Critical Healthcare
Founded 18 years ago by Seamus Reilly and Anne Cusack in Ireland’s midlands, where it is still headquartered, Critical Healthcare employs 22 full-time staff. That figure is set to at least double over the next five years as a result of the deal, which centres on Critical Healthcare’s multi award-winning procurement platform Medlogistix, in addition to other projects.
Medlogistix has dramatically improved the supply chain and procurement landscape for the National Ambulance Service of Ireland, as well as multiple emergency service providers in the UK.
Critical Healthcare will now be rolling out Medlogistix for Falck across four countries – Denmark, the UK, Germany, and Spain. Critical Healthcare will become Falck’s single managed service provider for medical consumables and will be responsible for managing some of Falck’s key manufacturers and producers.
The deal is estimated to be worth approximately €2 million per year over a period of five years, with a total contract value of €10 million.
Dr. Anne Cusack, Managing Director and Co-founder, Critical Healthcare, said:
“We are absolutely thrilled with our collaboration with Falck and look forward to a long and fruitful relationship with them. This is a massive commitment by them to entrust this business with us and we are looking forward to being able to repay that trust by delivering a world-class, quality service to Falck across Europe.
“The impact of this collaboration is an important milestone in the company’s progression and represents significant growth for us over the coming years. We have 22 directly employed staff in Westmeath, where our business is growing strongly. But with the new Falck deal, and other ongoing work, that number is set to increase further – by around 30 new hires over the next five years.”
Seamus Reilly, Operations Director and Co-founder, Critical Healthcare, said:
“We have already established an office in Germany, opened in January 2019, and initiated our first employee there. We have recruited four further people specifically as a result of the Falck deal. We are currently building the platforms for Germany and Denmark and our aim is to have all four countries operational no later than April. We were able to compete for and win this European contract because we were able to demonstrate the savings our package could offer across all elements of the procurement process.”
Critical Healthcare also especially wanted to thank Enterprise Ireland, the trade and innovation agency, for its help during the procurement process, as well as for its Business Process Innovation grant, which assisted with the development of the Medlogistix.
Helen McEntee T.D.,Ireland’s Minister of State for European Affairs, said:
“It is heartening for me to witness an Irish Small and Medium Enterprise such as Critical Healthcare achieve such fantastic growth through its commitment to innovation and customer service. The fact that Critical Healthcare is forging strong links in Denmark, the UK, Spain and Germany, while at the same time continuing to maintain its dominance in the Irish market and hiring significant numbers in the midlands is a credit to the management and I wish them further success into the future. It is a wonderfully positive story for Ireland and for the Midlands.”
Marina Donohoe, Director of Enterprise Ireland’s UK and Northern Europe Operations, said:
“Across the globe, Irish companies are achieving international sales at record levels and bringing the Irish Advantage to business partners. Internationally, Irish companies are driving innovation and leading across a wide range of sectors including the medtech sector, with Ireland being the second largest exporter of medtech products and services in Europe. Critical Healthcare, an Enterprise Ireland-supported client, is a great example of the success and innovation that is emerging from Ireland and the deal announced today is hugely significant for the company and their Danish partners Falck.”
In good times and bad, whether we are stressed or serene, there is a solid reason we are routinely told to listen to our bodies. Our bodies have a lot to say for themselves.
EY’s most recent life sciences Pulse of the Industry report describes the human body as the ‘biggest data platform’ there is. Capturing this data, making sense of it, and using it to create value for all stakeholders, are the driving forces behind today’s global health industry.
What, specifically, can we expect to see and hear shaping medtech over the coming months? Ask anyone up or down the supply chain and the first response you’re likely to hear involves the unstoppable rise of Artificial Intelligence (AI).
It’s widely anticipated that the market for healthcare AI applications will increase significantly this year – to around $1.7 billion – in areas including drug development, imaging diagnostic and risk analysis. As the medtech industry comes to terms with the seemingly endless possibilities of AI, all concerned are looking for evidence – and results.
The rise and rise of AI
“It’s not just medtech that’s being transformed by AI, it’s almost every industry,” says Donal Cummings, Chicago-based Vice President of Digital Health and Life Sciences with Enterprise Ireland. “But the impact on healthcare is likely to be greater because it’s a legacy industry that lags behind other sectors, so AI has the capacity to really move the needle.
“Some of the advances are mind-blowing,” he says. “You look at a firm like Nuritas, which is using AI to unlock peptides that deliver unprecedented health cures and benefits that could improve the lives of billions of people. The potential is just vast.”
That sense of potential is shared by Amy Robinson, a Trade Development Executive with Enterprise Ireland based in Boston. “AI is the massive buzzword in our industry right now, it’s taking over the pharma world as well as the medtech industry,” she says. “Everyone knows that AI has the capability to transform the way we treat patients but are we seeing it in action? I’m not sure – not fully anyway.
“Maybe this will be the year that machine learning does what everyone says it can do, in terms of time saving and accuracy of diagnosis,” Robinson says.
“Right now though, my sense from talking to companies is that there’s still a slight hesitation. Are patients going to buy in? Are companies going to invest? I have a feeling everyone is holding back slightly until the technology has proven itself.”
As that technology evolves from perceived ‘gadgetry’ to genuine, device-based data generation and analysis, industry insiders see a range of holistic benefits.
“AI represents a golden opportunity to capture and collect data that brings about a greater understanding of individual patients,” says Jean-Charles Moczarski, Market Advisor for Enterprise Ireland’s life sciences division, based in Paris. He cites Syncrophi as an example of an Irish company operating in the digital health space.
“One of the great benefits of the technology is that it allows medical practitioners to spend more quality time with the patient and less time on paperwork and administration,” he continues. “Meanwhile, analysis of the data through complex algorithms leads to more specific, and ultimately more effective, treatments.”
AI is also enabling individuals to take more control of their own health.
“Here [in the US], there has a been a shift to value-based care. Ultimately, hospital systems want to reduce the number of hospital admission as much as possible, keep people in hospital for as long as necessary for treatment, and then reduce the likelihood of readmission following discharge,” says Robinson.
“The rise in wearable tech can reduce traffic to the hospital waiting room,” she says. “If someone is prone to falling, for example, their watch can send them alerts and guide them through daily exercises designed to strengthen core muscles and balance. The same tech can help people monitor their sleep patterns, cardiac rhythms, or even recover from more serious illness, say a stroke or Parkinson’s, by setting and monitoring daily goals.”
As fast as the AI revolution is taking place, it’s about to get even faster.
“The arrival of 5G mobile technology is going to speed things up in healthcare AI, with real-time information dramatically improving the quality of care,” says Moczarski. “There seems to be almost no limit to the value the technology can add. Basically, the more data the healthcare industry has, the more things it can do.”
Big tech moving into healthcare
Who knows more about data than the tech giants? These behemoths have had their eye on medtech for some time now. Apple in particular has been leading the charge with a series of consumer-targeted innovations – the Apple Watch is virtually a 24/7 health advisor – and data-driven investments. What is the state of play this year?
“As an industry, medtech is certainly ripe for disruption,” says Cummings. “You look at banking, which is hardly at the forefront of technological uptake, and people have all sorts of ways to access their money and their data. Compared to that, health is lagging so far behind that it’s no wonder the big tech firms are waiting in the wings.
“These guys are proven problem-solvers; they’re used to going into a sector and creating solutions to tackle pain points,” he says. “The likes of Google and Apple have looked at healthcare and thought “You know what, we can make this better”. I think Apple in particular are ready to go again with their wearable technology.”
It’s not just consumers who are feeling the effects of a tech takeover.
“Up until now the healthcare industry has been made up of traditional players, such as Boston Scientific and Medtronic,” says Robinson. “We are now beginning to see a shift towards more non-traditional players entering the market. GAFA [Google, Apple, Facebook, Amazon] are poised to move in and they’re threatening to shake up the whole industry. As such, traditional suppliers have been consolidating their supply chains in order to remain competitive and that’s having a knock-on effect on smaller manufacturers who perhaps don’t have the economy of scale.”
Another trend shaping the healthcare landscape this year is consolidation, with high-profile mergers and acquisitions helping companies to scale and enhance their competitive edge.
“There’s a lot of consolidation adding a further layer of complexity to the medtech industry, I would say concentrated mainly among medical device manufacturers,” says Cummings. “This has the potential to squeeze the little guys, who traditionally would have started out as sub-suppliers to Irish manufacturers before setting their sights on the export market. With the trend now towards fewer and bigger suppliers, the smaller players may have to rethink their business model.
“There is a lot of interest in the Irish scene, which is known as a greenhouse for medtech innovation,” he adds. “There are a lot of big players looking around for the next big opportunity to invest.”
A data-driven future
Digital transformation is accelerating in every aspect of our lives. Healthcare is no different. The rise of artificial intelligence, the proliferation of big tech in medical research and manufacture, and the changing face of the wider business, is all being driven by an unprecedented flood of information. As even more data becomes available, as our understanding of that data becomes more sophisticated, the industry will continue to change. An exciting year awaits.
Precision healthcare involves the use of data to provide customised care tailored to an individual patient based on real-time clinical, molecular/diagnostic and exogenous factors.
The emergence of such models demands that hospitals are no longer seen as places where healthcare is just delivered, and need to evolve into hubs that bring together clinical engagement and patient experience to provide customised care delivery with high outcomes.
Similarly, these outcomes won’t be limited to performance metrics such as quality of care, utilisation of resources and cost efficiency, but will extend to include non-tangible elements like patient comfort and satisfaction. It is therefore essential for hospital IT departments, clinicians and all stakeholders to embrace this change towards customised healthcare delivery that is no longer based on a one-size-fits-all solution.
Key Performance Indicators for Hospital CIOs to Support Precision Health
For several decades, hospital CIOs across Europe were focused on investing in healthcare IT infrastructure that mainly centred on electronic health records (EHR). Today, however, hospitals need to look beyond EHR and should have a robust data management strategy in place for precision health. For this shift, it’s important to not only invest in medical technology and devices that collect healthcare data, but also develop a roadmap that integrates all solutions so that clinicians can derive actionable insights from data.
There is also a need to invest in the latest technology that supports the vision for personalised care delivery such as data analytics, clinical decision-making and the overall development of a digital ecosystem that supports interoperability. Furthermore, it will be critical for hospitals to train physicians and clinical staff so that they can make use of the established infrastructure efficiently.
Hospitals should also increase awareness among patients to utilise technology for their self-management goals such that an integrated care delivery system comprising pre-, during and post-care follow up is achieved with active participation from patients. Hospitals will require integrated data including patient history, genomics and other social determinants of health, and data from post-discharge follow-up or home health, and use it in conjunction with the data that is generated in the hospital during care. This is especially important as hospitals increasingly engage in population health management and chronic disease management programmes.
Medical Technology: an Enabler for the Future of Hospitals in the Precision Health Era
According to Frost & Sullivan proprietary research, 90% of hospitals in Europe are digitally enabled yet less than 20% of them are fully digital, with capabilities to share data outside their own hospital network.
For personalised and precision healthcare delivery, two critical elements are healthcare data continuity across care settings within and outside the hospital, and high levels of patient engagement.
To enable digitisation of personalised care, medical technology vendors have to design data-enabled solutions and devices that will help hospitals achieve synergy between core-precision health technology including -omics Rx/Dx, remote patient monitoring and exogenous and lifestyle monitoring. In addition, they have to develop enabling technology for healthcare data management, interoperability and security.
There will be an emergence of business models that encourage collaboration between hospitals and medical technology vendors through risk-sharing agreements to drive patient engagement, especially in the light of increasing healthcare consumerism.
To summarise, hospitals, medical technology vendors and healthcare organisations that are able to digitise and democratise healthcare information to derive value from both institutional and individualised data will stand to generate high outcomes in a value-based care environment.
Medical technology companies devote about 7-8% of their annual sales turnover to research and development and it can take up to three years to bring a new product to market.
It’s a complex and time-consuming process, given the effort and cost of R&D, the elaborate review and approval process, and overcoming the “valley of death” between innovation and commercialisation. Additional pressures include the regulatory landscape, healthcare reforms and medical device tax, all of which restrict innovation.
Medical technology companies want to bring the latest products to market quickly and at cheaper rates. As such, collaboration between industry, academia and the clinical community will be highly beneficial to leverage the cumulative benefits of ideation, scientific skillsets, test beds for trials and manufacturing prowess to bring next-generation medical devices to market.
Key Benefits Offered by an Integrated Ecosystem to Medical Technology Companies
Academia provides a strong research engine for medical technology companies to tap into and in turn offers support for commercialisation through financial assistance, as well as development and manufacturing capabilities.
On the other hand, the clinical community can contribute to such collaboration by providing key inputs and professional opinion regarding use cases, thus furthering the pace of research and innovation.
Furthermore, government and regional healthcare authorities can provide assistance to these collaborative partnerships through policies and frameworks that support infrastructure development such as defined bio-medical clusters and life sciences enterprise zones. Other benefits include accessibility to experts in a variety of medical fields, often enabling them to expand to areas outside their current focus.
More importantly, it also provides additional opportunities for collaboration such as infrastructure sharing, collective buying and group purchasing, as well as the opportunity to be part of a coveted community of high technology, venture capital and innovation.
Emerging Models: Medical Device Innovation Clusters and Infrastructure Sharing Models
Access to the best healthcare facilities, universities and research organisations and the presence of several technology start-ups, manufacturers, suppliers and venture capitalists are the hallmarks of a hotbed of innovation.
There are 27,000 medical technology companies scattered across Europe, mainly in medical innovation clusters in France, Germany, Ireland, the UK, Spain, Switzerland and Italy and employing more than 600,000 people.
These companies are focused across the value chain, including R&D intensive technologies, proprietary products, contract development and manufacturing, packaging and sterilisation. From medical instruments for diagnostics, drug delivery and surgical intervention to highly specialised areas such as medical imaging, robotics, implantable medical devices, prosthetics, regenerative medicine, healthcare IT and telemedicine, these clusters play a big role in taking medical technology to the next level.
Apart from cost savings and research collaboration, these clusters offer other critical advantages. For instance, Ireland provides proactive support to medical technology companies through several initiatives that enhance the ease of doing business such as CÚRAM, a medical device research centre at NUI Galway. This culture of innovation has led eight of the world’s top 10 medtech companies to put down roots in Ireland. They also benefit from the export potential as medical devices account for 10% of all exports from Ireland. Similarly, 80% of the global production of stents and 50% of the ventilators for acute hospitals are manufactured in Ireland, which indicates the success of the medical device hotspot in furthering innovation.
To summarise, an integrated ecosystem of academia-industry-clinical community supported by government and regulatory authorities can collectively address major challenges by putting together the strategic competencies necessary to achieve a common goal.
Frost & Sullivan research has shown that healthcare providers across the globe could face a decline in operating margins of up to 30%, due to costs associated with regulatory reforms as well as general reimbursement.
As a result, they are often forced to cut back on the procurement prices of products offered by medical technology companies. This means that on the original equipment manufacturer (OEM) side of business, medical technology companies have to look internally for savings as research-led innovation or manufacturing cost management alone cannot bridge the gap.
Supply chain and logistics are major areas where costs savings can be achieved for a medical technology company: According to McKinsey, supply chain transformation not only results in a 10-20% improvement on profit margins and inventory days of supply (DoS), but also allows them to offer additional service solutions to their hospital customers.
Strategic Advantage Offered by Supply Chain Management
The time has come for medical technology companies to move away from a one-size-fits-all approach for supply chain management (SCM) and begin to develop differentiated strategies based on product line, target market and customer type.
An effective SCM strategy for medical technology companies should focus on overcoming the fragmentation in inventory management by giving an OEM the ability to base consignment stock on market demand. This will enable companies to have high product visibility across the supply chain, which results in optimised stock-keeping while reducing the cost of inventory holding and improving logistics as more products will be in circulation in the market.
To improve operational aspects of supply chain, most medical technology companies are investing in technologies that enable real-time tracking of assets to forecast demand and improve workflows. However, there is also a need to recognise the variations in the procurement of medical technology by healthcare providers to fine-tune the supply chain strategy based on customer type.
To achieve this, medical device OEMs will have to increasingly look into collaborative and risk-sharing agreements involving multiple stakeholders, including group purchasing organisations, hospital collectives, procurement departments of hospitals, and third-party distributors or logistics providers.
Integration and Collaboration will be Key to Effective SCM
Supply chain integration will be critical to overcome fragmentation and bring in more transparency and communication across the healthcare supply chain. This will require standardisation of transactions between medical device OEMs, distributors and healthcare providers.
Medical technology companies are working with distributors as well as directly engaging with healthcare providers to sell their products. In both cases, the focus should be on identifying and addressing the structural changes faced by healthcare providers, such as cost pressures due to regulatory reforms and reimbursement, and use that as the base for pricing and consignment stock management.
Medical technology companies that are revitalising their supply chains by removing redundancies and improving workflows to enhance operational efficiency should ensure that the transformation process is holistic and rolled out across the entire organisation simultaneously. A piecemeal approach will only add to the complexity and result in inefficiencies. An all-inclusive plan will lead to better cross-functional efficiency in the long term, as medical technology companies will be able to identify key performance areas within the supply chain and proactively address the challenges in real time.
Over 13,000 medical technology patents were filed through the European Patent Office (EPO) in 2017, an increase of 6.2% over 2016, underscoring that Europe is fast becoming a major hub for medtech development.
Medical technology is no longer product-oriented but is positioned more and more as a solution with an integral role to play in delivering value across the care continuum. That’s why medical device original equipment manufacturers (OEMs) have a constant need to innovate to stay relevant in a highly competitive market.
This is particularly the case in Europe, where roughly 27,000 suppliers face an average technology lifecycle of 18-24 months before enhanced features are made available in the revised version of a given product, according to figures from MedTech Europe.
As a result, medical device OEMs have to find ways to generate value over and above the typical R&D-based innovation that requires higher lead times to bring a product to market. In this scenario, product value engineering (PVE) gives OEMs a cost-effective and efficient route to bring incremental innovation to its solutions and provide ways of offering value to customers in terms of product improvement, efficient manufacturing and customer satisfaction.
The Rise of Product Value Engineering
Most of the healthcare challenges for which medical OEMs provide solutions are complex and systemic, often traversing clinical, economic, workflow and supply chain issues faced by hospitals.
In spite of all the benefits that these solutions bring to customers today, OEMs continuously face pressures to reduce product pricing while protecting business margins. In this context, specialised engineering solution providers offer competitive differentiation and cost savings to OEMs, especially when such innovation leads to better and improved versions of the solution, where enhanced features help to generate superior value for the customer.
It is all the more important with healthcare reform and reimbursement cuts affecting the profitability of medical technology companies. Not to mention, the added pressure from healthcare providers, payers and regulators demanding that OEMs demonstrate proven outcomes for their products.
To that end, PVE offers medtech OEMs a new lease of life as its activities revolve around providing more with less — more features, more benefits, and higher quality— for the same cost or lower. PVE ensures that solutions are optimised continuously during their lifecycle with respect to the needs of customers and market demand. The focus on PVE has led to the emergence of flexible business models in medical technology development and manufacturing, where the emphasis is on designing for value.
Outsourcing Medical Device Development and Manufacturing for Long-term Sustainability
The major customer segments of medical device OEMs — namely hospitals, imaging centres, laboratory groups, private medical centres and general practices — are facing the brunt of budget cuts and increasingly moving away from a capital expenditure model to one that’s focused on operational expenditure where possible.
Large-scale one-time procurement processes will eventually move to pay-per-procedure models. This situation is coupled with the reality that these customers have less money at their disposal to invest in cutting-edge medical technologies and have to make some quick and rational decisions when it comes to picking the appropriate technology, given the rate of change in terms of specs and features.
The eventuality is that medical device OEMs have to provide more for less in terms of features and ultimate value, and often do not have the in-house capabilities to transform their design, R&D and manufacturing capabilities. Medical device outsourcing (MDO) offers several advantages to OEMs looking to expand their capabilities, whether it is in terms of new technology development or market expansion. This helps OEMs to focus on their core competences, while adding new revenue streams and achieving cost efficiencies during product development. MDO enables OEMs to bring newer products to market in 30-50% less time compared to in-house development efforts, and at 10-30% savings levels when it comes to product development costs.
To conclude, medical technology companies recognise that delivering maximum value is a strategic sweet spot between superior functional performance and outcomes as provided by the solution and optimised costs in achieving it. To translate this value to its customers, OEMs will have to invest in sustainable and scalable models, with partnership and stakeholder collaboration playing an increasing large role to drive the engineering of solutions for the end customer.
North America’s healthcare giants are opening up to new innovations.
The best way to align hospital clinicians and innovation experts is to establish the value of the innovation and then secure a champion to advocate for it at the highest level, “someone who is comfortable about breakthrough insights and acting on them,” said Chris Coburn, Chief Innovation officer at Partners HealthCare, and a former founder of Cleveland Clinic Innovations.
Based in Boston, Partners HealthCare includes community and specialty hospitals, a managed care organisation, a physician network, community health centres, home care and other health-related entities. Several of its hospitals are teaching affiliates of Harvard Medical School, and Partners is a national leader in biomedical research.
While it is easier for large organisations to ‘dock’ with other large organisations, the challenge for innovative start-ups looking to sell into them “is to create a shared understanding, and ultimately a shared reward,” he said.
US healthcare must integrate hundreds of solutions
While for a start-up technology being pitched is its sole focus, for the healthcare system it is just one of hundreds of solutions. “Making sure there is the right level of attention to that technology in the big organisation should be the day and night focus. Getting that cultural alignment takes effort,” said Coburn.
The key to doing it is to clearly identify where the decision is being made. In health IT, that could occur in one of many units whereas, with a medical device, you are likely to be interfacing with just one, from which a likely clinical champion is easier to find.
“Do your reconnaissance to try and figure out who is going to be making the decisions and have a realistic view of timelines,” he said.
Avoid “death by pilot” by agreeing clear end points.
The areas of healthcare innovation about which he is most excited are immune therapy and, on the IT side, machine learning and artificial intelligence. “According to a recent report, 86% of healthcare organisations, whether industry, academic or government, are not yet using AI. In 10 years from now, care is going to look a lot different than it is today,” he said.
Interest in biosensors is already increasing, said Iris Berman, VP telehealth services at Northwell Health. “There is still a little way to go yet but we are looking very much forward to the predictive analytics that go along with that,” she said.
This chimes with the shifting emphasis from reactive medicine to a more proactive approach to health. At the moment “we’re taking care of very sick people,” she said. “If we can take care of that population using AI and sensors, it is in those populations that the best bang for our buck will come in terms of capital spend.”
Through her work in telemedicine, predictive analytics is already helping Northwell Health become more proactive. It’s also enabling people to have more control over their care. The result is treatment at home, which is less expensive and allows patients the support of loved ones. Telemedicine can also help in those parts of the population unable to access care, for a variety of reasons.
Berman debunked the myth that older patients are tech-averse. “Very few senior citizens don’t have a phone. We are all about ‘BYOD’, bring your own device. If you develop things that use a device they are familiar with, they are fine with it. There are programmes we use that integrate with their television, for example. If you integrate healthcare with TV or phone, they are very comfortable with that.”
For Robyn Muzeka, Technology Innovation Lead at Adventist Health System in Florida, the move is on to get physicians away from ‘pyjama time’ – the time spent working on electronic health record systems out of hours.
One way is through the use of devices that enable them to use ambient technology and machine learning/AI to document information and pull up charts. These are in room but are not as invasive as a microphone they have to speak into. “That’s where I think there is a lot of value,” he said.
Adventist is partnering with GE on its mission control applications, using methods of sifting through and analysing data for failings in a way not unlike air traffic control, ensuring patients get to the next level of care as efficiently as possible.
Technologies that help with the social determinants of healthcare are also required, particularly as hospitals spend so much time working with people who don’t have insurance, or have limited insurance. Opportunities exist for niche applications for AI such as in scheduling too.
For start-ups looking to engage with health systems, the biggest challenge is one of scale, said Muzeka. “In the US, we have small markets and large markets, and sometimes we can’t roll out the same technology in each market. We have to flex, each market has an individual take. Be open with your solutions, be adaptable. If you have something you are willing to pilot we can figure out those other pieces, but remain flexible and open,” she said.
Be device agnostic, said Iris Berman. “Interoperability is huge”, as is understanding that hospitals will have a series of legacy systems in place. “Be ready to integrate into existing systems,” she said.
Muzeka agreed: “Where we have been most successful with vendors is where they are willing to co-develop with us, instead of having a turnkey product.”
Challenges in healthcare create opportunities for innovators.
How to drive change in an industry that is traditionally averse to change? How to fix a broken care and delivery model that does not manage people well in the continuum of care? How to cope with razor thins margins at a time when the expense of delivering care is outpacing reimbursement?
These are just some of the challenges identified at the North American Healthcare Forum, a major international event hosted by Enterprise Ireland, and attended by senior leaders from US and Canadian healthcare systems, as well as some of Ireland’s most successful and innovative healthcare solutions providers.
One of the biggest areas of opportunity for the latter was identified as the ongoing shift in focus from the acute setting to the social care setting, with a growing emphasis on the social determinants of health, such as lifestyles and behaviours.
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Budget is a major healthcare challenge
But working within constrained budgets was a recurring theme. For Arden Krystal, CEO of Southlake Regional Health Centre in Canada, where a socialised, single-payer care model exists, one of the biggest challenges is capital.
“We depend very heavily on foundations to fund our capital. Governments take a very limited role in that and it creates a lot of challenges for us in terms of keeping up with things like information technology and newer technologies. We’re always behind (the curve) just replacing things that are literally broken,” she said.
Hospitals in growing communities fare better than those whose communities are performing less well.
Michelle Conger is Chief Strategy Officer at OSF Healthcare in Illinois. Aside from Chicago, the region is not a growing market, she said. Much of its focus, as a result, is on the integration of social services agencies, through a digital platform. One current initiative involves a community of 22,000 people, whose local hospital has closed, leaving residents without access to acute care facilities.
The aim is to improve health outcomes by providing access to OSF hospitals using technology and making better use of community-based programmes.
“In the US, social service agencies and healthcare operate in silos. A lot of times we are all working with the same people but not able to improve their health outcomes because we don’t realise it. Just creating that kind of transparency has had a big effect,” said Conger.
Opportunities for innovation in healthcare
Another challenge is transitions of care, said Brian Donley, CEO of the Cleveland Clinic UK. “Whether it is transitions from hospital to home, from one hospital to another, or from the operating room up to the floor, we see that as a big cost opportunity. Transitions of care costs a lot of money,” he said, pointing out they also lead to concerns about quality and safety. “How we achieve transitions of care better represents an opportunity for innovation,” he said.
Advances in electronic medical records software is a complicated topic, said Michelle Conger. “It gave us access to the data we need – and we built a separate data warehouse that helped us – but I think work has to be done to really help providers work differently because I’m not sure the system has made it more efficient.”
The challenge of highly constrained funding over the past seven years was highlighted by Rob MacIsaac, CEO and President of Hamilton Health Sciences in Canada. “Our strategy is to constrain funding in healthcare and expand capacity in communities,” he said.
“What that has meant for many providers is that we are being challenged to transform the system without having the resources to do that transformation. Innovation is very challenging if you can’t invest in it.”
There are however great sparks of innovation happening, he said, including R&D work around remote monitoring, to try and help patients into their home more quickly after treatment and surgery.
“We’ve also done early work in stratification of patient populations, trying to gain insights so we can start to better predict people before they crash, in a way that helps to prevent that. We are starting to do work around understanding what the potential is for us as a learning health system, and the role metrics and analytics can play in that,” he said.
Southlake Regional Health Centre is in a growing region, and so is the recipient of more funding. This has enabled it to invest in its own innovation centre. It has successfully partnered with a number of tech companies and entrepreneurs to develop products and services, which it has gone on to procure.
The aim is to have innovators come in at an earlier stage, “rather than with a fully baked product that may or may not work in a healthcare environment,” said CEO Arden Krystal. “We hope to do our call outs sooner, saying, here’s a couple of big chunky problems we have – companies, come to us and tell us how you think you can work with us and co-design a product that can help us.”
As with many healthcare systems, particularly those with ageing populations, “a lot of our big problems are around the fact that we have way too many patients and not enough space, so we have to find a way to continue to reduce stays, to help people back into the community. So remote monitors are big, but also some process tools to help us communicate faster and move people through our system hospitals. It’s all those kind of non-sexy processes that we sometimes don’t do very well in healthcare. We’re open to all of those as well.”
Any innovation that enables medical professionals to work “at top of licence” will be welcomed, said David Longworth, interim CEO of Lahey Hospital and Medical Centre in Massachusetts.
Ensuring doctors and nurses are not bogged down in routine tasks or paperwork, for example, will ease problems of burn out.
“If I had a blank canvas in relation to solutions in healthcare I would look at the way patients move through the system and at who is delivering the care, having people operate at the top of their licence,” said Lahey’s Longworth.
“I would also invest in transitions of care, leveraging technologies and applications to help foster seamless transitions of care, care giver engagement and patient engagement. I think we have just scratched the surface in how we can apply technology to not just individual patients, but populations of patients.”
Partnering with Enterprise Ireland is giving US giant Northwell Health an innovation advantage.
Northwell Health is the largest provider of healthcare in New York State, twice the size of its next competitor, with 23 hospitals and 700 outpatient locations. At 68,000 employees, Northwell is also the largest private employer in the State of New York.
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Innovation plays a key role at the organisation, both in relation to research activities, investment in external companies, and internal spin-outs.
A pioneer in its field, Northwell was the first entity in New York to create an integrated health system and today has revenues of close to US $12 billion.
Pressures on US healthcare systems
Despite its unique position, Northwell faces the same pressures as many other US healthcare systems, said CEO and President Michael Dowling, in Dublin recently to deliver the keynote address at the North America Healthcare Forum.
Organised by Enterprise Ireland, the flagship event brought together leaders from many of the biggest names in the US and Canada’s healthcare sectors.
Each faces challenges such as consolidation in their markets, growing use of technology, increased consumerism, greater accountability and financial pressures, he said.
“We all need to transform, to disrupt ourselves before somebody else disrupts us,” said Dowling. “If you are in the healthcare business these days and you are not a disruptor, not continually trying to disrupt yourself, you are probably in the wrong place.”
How Northwell competes against the world’s best-known healthcare provider brands
Not alone is Northwell competing against some of the world’s best-known healthcare provider brands, such as Columbia Presbyterian, Mount Sinai, and Sloan Kettering, “but now we have to deal too with Amazon, with Google, and with pharmacy chain CVS,” which is looking to take over US health insurer Aetna and turn its retail units into ambulatory locations.
Competition is coming from players who “look at the world very differently than we do”, said Dowling. The aim for Northwell, as for all US health systems, is “to be at the forefront of change, not the victim of it.”
At the same time, the sector is increasingly transforming from medical care to healthcare systems, putting a growing focus on the social determinants of health such as lifestyle, behaviours and social issues.
Developing partnerships and alliances is an important way of ensuring innovation at Northwell, he said. In December 2016, Northwell signed a partnership agreement with Enterprise Ireland which allows Irish companies early stage access to its clinicians and key decision makers, aiding the development of new products and services for the wider US healthcare market.
Such partnerships are highly valuable, bringing fresh insights and innovation to both parties, he said, “If it’s done right it’s a win-win situation.”
Why Northwell Health partners with Enterprise Ireland
Dowling partners with Enterprise Ireland because Ireland is, he said, “an epicentre of innovation”, with a young and dynamic population, an excellent education system and an “extraordinary amount of entrepreneurship.” Since the partnership with Enterprise Ireland was established, Northwell has worked with around 90 Irish companies.
Dowling offered advice to others looking to sell into the US healthcare sector.
“A company can have wonderful ideas but doesn’t understand fully the delivery systems of how healthcare is actually delivered on the ground.” Partnering with Northwell enables Enterprise Ireland companies to have a greater understanding of challenges such as regulatory issues, legal matters and reimbursement practices.
“The technology alone won’t solve it unless you understand the process of care,” he said.
“We have worked with 90 Irish companies and it has been a great experience,” said Dowling, citing physical therapy applications developer Salaso, clinical diagnostics company Technopath and medical technology company i360 as examples of innovative Irish companies Northwell is working with.
Patient care is at the centre of all its innovation. “At the end of the day, it’s all about what benefits the patient,” he said, advising companies wishing to succeed in this market to be careful of how they pitch to major healthcare systems in the US.
“Don’t come across trying to tell us that you know how to solve every problem. No you don’t. You think you do, but you don’t. You have a little bit of the solution, it’s great, it helps, but it’s a lot more complex than you think. So do that piece and let’s work on the other pieces.”
Technology alone won’t solve healthcare challenges
Be aware that technology by itself doesn’t answer most problems. “When you are in the business of taking care of people, you use technology to augment what you do, not to replace it. You don’t want to become a prisoner of technology. The technology people who understand the human element are the people you give more traction to,” he said.
The future of healthcare solutions is likely to be increasingly consumer focused. “Healthcare has never been consumer focused the way it should be, it has been patient focused. There’s a subtle difference,” said Dowling.
The doctor/patient or nurse/patient relationship has traditionally been imbalanced, with an assumption that all the power or knowledge is on the side of the medical professional.
“A consumer is more knowledgeable. They now have more access to information, they are more tech savvy. They Google everything and they visit chat rooms before they come in, they question more. So healthcare is making that transition from patient to patient/consumer. It’s not ‘what’s the matter with you’, it’s ‘what matters to you’.”
Technology facilitates this. “We have patients involved in determining their own care. We have technology that allows patients do things at home before they come in. We also understand better, or appreciate better, that the patient’s social circumstances are as big a determinant of health as whether they see a doctor or not.”
Northwell Health already practices telemedicine extensively, for example, across psychiatric, stroke and ICU services. “The combination of consumer and technology is going to drive healthcare change much more than anything else,” he said. “The provider that doesn’t listen to the consumer who is empowered with technology is going to be left behind.”