The MedTech sector is witnessing significant disruption in healthcare delivery as more care is transitioning outside the hospital, and this trend is expected to accelerate further in the next two to three years. Factors behind this disruption include the increasing focus of MedTech companies on aligning product and business portfolios to cater to ambulatory surgery centres (ASCs) and home healthcare and the growing use of digital tools such as remote patient monitoring (RPM) and wearables for monitoring.
The care transition is also significantly impacted by factors such as the closure of hospitals in the United States, challenges related to the availability of skilled healthcare professionals, and workforce burnout in traditional hospital settings. Based on a survey of physicians who serve predominantly Medicare fee-for-service (FFS) and Medicare Advantage (MA) patients, it is estimated that up to US$265 billion worth of care services (about 25 per cent of the total cost of care) for Medicare FFS and MA beneficiaries could shift from traditional facilities to homes by 2025 without a reduction in quality or access.
Increasing healthcare costs are prompting payors and providers to seek alternate healthcare delivery solutions such as ASCs and healthcare at home. The number of ASCs will increase with healthcare systems' ambitions to grow their footprint by building new centres to retain market share and expand revenue streams. ASCs are responsible for an estimated 50 per cent of all outpatient surgical procedures in the US. According to Frost & Sullivan estimates, in 2023, surgical procedure volumes in ambulatory surgical settings are expected to surge by 10 per cent in the country.
MedTech companies should customise their market access and sales strategies based on the decision-making authority and needs of the sites of care, which differ significantly from that of hospitals. Orthopaedic device companies have already created strategies to target ASCs, including customised product portfolios.
Hospital-at-home (HaH) programmes have gained significant traction across the US since the COVID-19 pandemic. Several providers offer these services with reimbursement support to allow care for low-acuity patients in their homes while preserving bed capacity for high-acuity patients in hospitals. Evidence supporting the programmes’ success continues to be collected.
As the use of remote patient monitoring, virtual care, and advanced analytics solutions increases, Frost & Sullivan anticipates rapid growth for these programmes. A core capability for providers to offer HaH programmes is small, portable, and smart medical devices that can be sent to patients’ homes and taken elsewhere as the need arises. Home-use medical devices (amid the trend of home health management for other chronic diseases) will be in demand.
The use of medical wearables at home for monitoring heart health, diabetes, respiration, and blood pressure has expanded significantly since the start of the COVID-19 pandemic. Companies must focus on developing easy-to-read solutions with alarm systems at affordable price points.
Digitisation of care delivery
Technology convergence in healthcare will continue to reshape care delivery, creating a shift towards consumerisation. This trend will gain momentum as consumers pivot towards managing their own well-being in more self-sufficient/independent settings. Disease monitoring, diagnosis, and analytics will be the key sectors for industry incumbents to build, establish, and strengthen their presence.
Digital technology use in healthcare delivery has increased exponentially since COVID-19 and is expected to accelerate further as companies start realising that it is more profitable to start selling solutions along with medical devices. An important factor driving a solutions-based business model is that it facilitates strong engagement between medical device companies and healthcare facilities, which can help them further expand their offerings.
According to Frost & Sullivan estimates, the global digital products and solutions for chronic disease screening and monitoring are expected to account for more than 50 per cent of MedTech companies’ revenues at the global level and may reach more than 75 per cent in the US in 2023.
All-in-one MedTech solutions and smart workflow management
Healthcare providers will look to MedTech companies to help address the shortage of healthcare professionals by leveraging innovations in workflow management. Providers will prefer to work with vendors that provide a one-stop-shop approach through unified digital and hardware ecosystems. This presents new prospects for MedTech companies to develop solution portfolios that address different parts of the healthcare value chain or to acquire companies that offer these.
Healthcare providers will collaborate with MedTech companies to address the growing shortage of healthcare professionals leveraging innovations in workflow management. Real-time location systems that quickly identify medical devices within healthcare facilities, operational efficiency solutions for workforce management, smart patient flow management, organised resource scheduling, and real-time inventory management to lower costs and prevent staff burnout will be key growth areas for MedTech companies going forward.
Bhaskar Vittal is the Industry Principal, Advanced MedTech Program, Healthcare & Life Sciences Practice, Frost & Sullivan.
This article appears in Omnia Health magazine. Read the full issue online today