Keeping medical device designs relevant in a big data world migrating to outcomes-driven payment models

Last week I presented the closing keynote at the Medical Design & Manufacturing (MD&M) West Conference & Exhibition in Los Angeles. MD&M has always been about what’s next in medical device design and this year’s event didn’t disappoint. While still being primarily focused on hardware, many smart device manufacturers came out to MD&M looking for advice on next generation architecture and thinking so that they could point their product roadmaps in the right direction. The questions at the end of keynote were astute and thought provoking. Below is what I shared with the crowd in both the main presentation and through answers to their questions; you can find my presentation deck at as usual.

Today we’re accustomed to going on the Internet to visit websites, send e-mails, shop online, run mobile apps, and even get up to the second and down to the inches directions from satellites orbiting the earth. We’re seeing medical devices and related hardware moving faster towards the same kinds of consumerization, their sensors switching from analog to digital native, becoming more mobile, and perhaps most importantly, becoming part of the “Internet of Things” (IoT) by generating enormous amounts of coveted clinical data.

What’s going to be even more spectacular is that you’ll soon be wearing smart watches that can know your vital signs, electronic “bandaids” that can sense whether wounds are healing, and many other personal medical devices that continuously monitor things going on within and around your body. These kinds of devices will make up what will soon become the “Medical Internet of Things” (mIOT). mIOT devices will generate significant amounts of data and managing this data becomes what’s known as a “big data” problem. The reason is obvious – data flowing continuously from your body comes in rapid velocity, large volumes, and many different kinds of variety.

IoT, Big Data, mIOT, and analytics will certainly transform the medical device landscape and those that don’t adapt won’t be around to enjoy the spoils. The way next generation devices will be designed must adapt so that new devices generate the right kinds of data that are easier to analyze and utilize – the specific traits that buyers of clinically useful equipment will use when making purchasing decisions. New health system purchase decisions will be made era of value-driven decision-making due as the fee for service (FFS) payment models get augmented by outcomes based payments in so-called Accountable Care Organizations (ACOs). As our customers of medical devices get paid less for the services they perform and more for the patient outcomes they improve, their expectations of data generated from our devices also gets more sophisticated.

As we create and upgrade future devices, our designers must realize that they’re no longer just making standalone devices, they’re likely crafting a system component that fits into a larger system of systems ecosystem that is creating and moving around enormous amounts of coveted data. Coveted because that data can be used to improve diagnostics, tailor clinical workflows, improve patient safety, and advance care coordination. All of these kinds of tasks and the data that will make them possible become even more important as payment models move from FFS to outcomes-driven.

If you’re a company making an analog device living in a digital world, your days are numbered and you need to be worried. If you’re making digital devices and you’re not sharing data with IT systems, your competitors will be selling more products than you will because ACOs and outcomes-driven organizations have an insatiable appetite for data. Because next generation health systems will be paid for outcomes, they will not settle for aging, expensive, stand alone equipment when connected alternatives are available. If you’re selling digital devices that are sharing some data but not capturing enough data to make it useful for analytical purposes, you’ll see limited revenue growth and margin pressure along with loss of sales as your customers phase out your products in favor of those that generate clinically valuable data for improving their workflows.

Most medical devices, like other IOT devices, will be disrupted by the business-value focused Big Data movement at some level. How much your company’s products are disrupted will depend on whether your devices are built around the idea of enabling agile clinical workflows and whether your devices generate patient outcomes improvements in a measurable way. Think about the mobile phone and digital devices world in 2007 vs. 2014 – almost none of the same players that were big back in 2007 are still big today. Now, think about the world in 2021. Will your company be around or will it be disrupted out of existence by Big Data, analytics, and new payment models?

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  1. Pingback: The Internet of Medical Devices | Bob on Medical Device Software

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