To create innovative, medical technology, companies have to look at what people need but think about what cars do. Cars today rarely surprise the driver with a terrible breakdown. Instead, they are fitted with cutting-edge sensors, computers and sophisticated communication systems that proactively warn you of potential hazards.
Development teams around the world are currently working to make this same vision possible with wearable medical technologies. Besides the devices that can be worn as watches or bands (think “fitbit”), these teams are also developing skin-surface, implanted sensors and in-body intranet gadgets that can link devices whilst keeping the data collection private from any potential breaches of interconnectivity. Other teams are developing technologies ranging from skin patches to wearables that detect body signals, such as epileptic outbursts, that then automatically deliver the appropriate dose of the required drugs for treatment.
According to an interview with Serge Bernasconi, CEO of MedTech Europe, wearables represent one of the latest trends influencing the medical technology industry in Europe; and probably for global markets as well.
We can thank the technological growth of sophisticated, frequently wireless systems, for this surge in wearables. The ability to build small, smart electronic systems that can be worn or implanted in the body for a prolonged period of time, collect data about the patient's physiology to recommend or support optimal medical responses and then transmit this data wirelessly, will inevitably change the horizon of medicine.
Despite the enthusiasm and ignoring the intrinsic limitations of these technologies, like the constant need for a power source, there is still no clear business model to demonstrate the value of wearable medical technologies to the various market stakeholders.
The real value behind these wearable medical technologies is actually the patient data they collect. Pivoted appropriately in the tide of medical regulations and sensitivity issues, this value has several major implications for wearable medical technology companies trying to develop their business models.
Razor and Blades
From the days of ‘King Camp Gillette’, the razor and blades business model represents any business practice in which a company offers a one-time product at little or no cost that is complemented by another product, for which the consumer is required to make repeat purchases.
Taking into consideration the resources and technologies invested in developing increasingly sophisticated wearable medical devices, it is reasonable to expect they will not be the cheapest gadgets on the market. And while many customers and individuals might be willing to purchase the latest medical technology trend, healthcare systems and hospitals/clinics will definitely be more skeptical on funding or covering the costs of wearables.
Seeing as how coverage and reimbursement fosters the adoption of medical technologies, it should be important for wearable medical technologies companies to plan on how to approach patients, as well as medical professionals and institutions that can provide care with better results and lower costs of treatment.
Considering all the appropriate aspects of patient data security and privacy – which already exist among doctors, patients and Electronic Medical Records (EMRs) – wearable medical technology companies could provide the devices, at low or no cost to customers, while selling medical data on a subscription model to healthcare systems and hospitals/clinics, because these are the stakeholders who can benefit the most from an overall patient population healthcare improvement.
Think about aggregated data to healthcare providers, or simply put ‘Big Data’. For example, many chronic disease management programs, which are focused on high-risk patient groups, struggle to obtain timely and accurate data on their health and fail to deliver the expected results. What if local health authorities could measure the average increase of blood glucose and/or pressure over a large patient group during the course of one year and plan appropriate measures to educate and better treat that population? Would that be valuable?
In terms of individual data, medical professionals would be able to monitor patients consistently and better manage the coordination of care amongst groups. Certain patient data variables could trigger alert systems, such as those already in use by many outpatient and rehabilitation providers, and immediately inform doctors. This can be extremely valuable for post-surgical care. Consequently, patient data could be used to automatically schedule an urgent patient check-up instead of having to wait until the next consultation, or worse...
There are many other possible applications that go beyond diagnostics – there are wearables that can actually treat patients. The point is that wearable medical technology companies have the opportunity to approach healthcare systems and hospitals/clinics to propose solutions for superior monitoring and treatment without placing the focus on the price of the devices.
The potential for medical wearables is already there for all of us. The question is no longer if the healthcare system will acknowledge their value. Rather, how can these advanced companies accelerate the perception of their value for the healthcare system, including payers and providers?
Do you agree companies need to further consider the perception of payers and providers for wearable medical technologies? Do you want to read more analyses and news about wearables? Subscribe to our newsletter Value Intelligence and join the discussion.