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InVivo_MedTech_Forum_2019_In_The_Medtech_Glasshouse_Industry_Need_Not_Fear_Stones_1

How Fast And How Fully Can Value-Based Health Care Be Integrated Into The Medtech System?

    • Taking unnecessary costs out of health care delivery is a task that medtech can make a huge difference to, and in Europe is something that can guarantee long-term, socialized health care for all.
    • Value-based health care is the way of the future, ticking all the boxes of patient-centric, affordable care with outcomes not activity as the measure of success. Just how fast and how fully it can be integrated to critical mass levels has not yet been determined, however.
    • So what? The medtech industry is changing faster than it ever has, driven by IT-enabled delivery, remote care where patients take responsibility for part of their own their care, and a new generation of health care professionals who have a different view of values than previous generations, and who are ready to play in an environment that demands total transparency.

Rob ten Hoedt opened the annual MedTech Forum in Paris by reflecting briefly on a career in medtech that began in 1983. From a European industry  ̶  if not global  ̶  viewpoint, it has been a “phenomenal journey, not just of commercial success but more importantly of patient success," he said. 

Europe is his beat, both at MedTech Europe and as executive vice president of Medtronic PLC’s EMEA region. Health care creativity is his passion. But he won’t fall in with the chorus of disapproval on the EU Medical Device Regulation (MDR) – the big global talking point of the moment  ̶̶  which is due to come into force on May 26, 2020. Unlike many, he does not expect it to be unduly damaging to the European medtech commercial base, or its capacity to be creative.      

InVivo_MedTech_Forum_2019_In_The_Medtech_Glasshouse_Industry_Need_Not_Fear_Stones_2

Rob ten Hoedt

Ten Hoedt was clear that industry is facing a time of change, but in reality, the creative elements will not cease. “I’m very optimistic about that.” He went further, indeed stressing the need for change considering that in the regulatory world of today, the MDR is an improvement on something of a “dinosaur.” In the era of big data and transparency, real-world data will become the driver of whether or not people accept new technologies. These data will give a clearer picture of whether a device will work in a patient. Transparency and clarity are major tenets in the ten Hoedt book of modern business practice.

The work of regulators will change dramatically in the next few years, said ten Hoedt, whose UK regulatory colleague Phil Brown (ABHI) voiced similar sentiments at a recent Westminster Health Forum meeting (June 6): namely, there will always be iterations of regulation and the next one may include ethical guidelines and vigilance matters, or maybe borrow successful regulatory practices from other industries. In any case, ten Hoedt said the incoming MDR was just a small step that would create something very different. It will be an environment where real-world data will be an important driver for medtech in the future. “This is good.”

Looking at trends in the health care market in general, demographics and elderly patients are driving a lot of costs in chronic disease management. “The unique thing about our industry is that medtech is well-positioned to work with health care systems to take costs out and guarantee long-term, socialized health care in Europe that is affordable into the future. That’s our responsibility, and in the emerging markets, medtech has a unique opportunity to help new systems leapfrog into new ways of paying for health care, as medtech is a crucial driver of innovation.”

But it has to live on a relatively small share of the funding pie. While roughly 5% of health care budgets are spent on devices – and just 1% on diagnostics but 10% on pharma  ̶  there is huge potential, via outcomes improvements and digitization, to take unnecessary costs out of the 80% or so that is spent on delivery systems. Ten Hoedt said a radical approach would pay dividends. “We should be prepared to take a risk, and if the outcome isn’t achieved, we should be prepared to take the consequences.”

He added, “But if we want to play that role, it must be with honesty, integrity and transparency as never before.” Everyone must be able to see what the industry does, and to be able to control what it does, he added. “We need to be willing to live in a ‘glass house,’ and if we do it well, we’ll be a trusted and accepted partner, respected for honesty, transparency, legal compliance, and adherence to codes.” These were crucial elements for the future of this industry, he noted.

Ten Hoedt also sees opportunity for better communication around healthtech, hospital decisions, the delivery of treatments and the role of the industry in partnership with health care systems. “There are a lot of unknowns out there.” Medtech can be a very sensitive topic – the scientific advances can be spellbinding to the public, but it only takes one small thing to go wrong, and all the good stuff is gone, ten Hoedt observed wryly. It’s a unique industry “that touches people at the most vulnerable point in their lives.”

But medtech cannot afford to make mistakes, or forego the necessary clarity. This only leads to suspicion, and – albeit rarely – to episodes like the ICIJ investigations in late-2018. That case was fueled by an element of suspicion about companies making money, doctors getting money from companies and being influenced by companies. Never mind that much of it was denounced as poorly researched and that the episode was unwelcome for many. Ten Hoedt observed that unless transparency is uppermost, trust in the system, in health care and in medtech, will all suffer. 

The Value-Based Answer

The answer is simple: it is value-based health care (VBHC), and showing outcomes and proving value. There is a lot of activity going on among health care professionals, but not all of it improves outcomes; and yet everybody is now aligned on driving outcomes. But there is a gap in the market. “Today, nobody is accountable for outcomes in the patient  ̶  and that includes medtech firms. Everybody is accountable for a piece of the action in the system, but no one is accountable for those outcomes,” said ten Hoedt.

The outcome needs to be the predictable element of the treatment procedure that patients go through, and someone needs to be accountable for that, he added. “And when that happens, you will see a dramatic change in how health care needs to be delivered – at both medtech and pharma level.” Today’s fully activity-based system means doctors and hospitals are getting paid for “being busy,” and this is not a criticism of the people within the system, who are pressing to deliver care with all the right intentions. But just who gets paid for outcomes?

VBHC is apparent in pockets only – within Europe, the Netherlands, Scandinavia, and Catalonia, to a certain extent and, on Europe’s fringe, Israel. But it can only start to work if payers and the therapy environment are ready for it.  Rewarding health care systems for doing what they currently do, only differently, is a major change. “Just look at the complexity of the reimbursement infrastructure; that’s why people are careful.”

He was optimistic but also realistic, and aware that lasting change takes time. “I never had the illusion that this would be just a few years of transition and we would all be a different world.” It is a slow journey, and far from complete, but it fits well in any self-pay system. “If there is anywhere where VBHC should be front and center, it’s in those markets where patients pay out of pocket.”

The Digitally Enabled Never-Ending Clinical Trials Scenario

Digital architecture, digital change, the digital challenge. One attendee at the MTF meeting claimed that delegates could not go 10 minutes without hearing fulsome reference to “digital” in any of the multiple conference rooms at the Cité des Sciences et de l’Industrie venue in north-west Paris.

Ten Hoedt had a measured view of digital, however, seeing it simply as an “overlay.” For him, it is an answer to chronic disease management issues, and all about the shift from acute care to chronic disease managed care. “At the end of the day, that is also why it’s important that we change delivery to outcomes-based.” The IT/digitization of health care will help stakeholders collectively manage patients remotely ̶  at home – and ensure they don’t need to return to hospital.

From a prevention and patient management perspective, IT will offer a unique added value. And aside from that, the results of treatments will be measured on a patient-by-patient basis. “In the future, almost every patient will be in a clinical study – and permanently – because we will be collecting the data that resides in the ‘big cloud’ where AI can be applied to it.”

Digital is the biggest health care transitional and transformational change the sector has seen

 

However, it is far from a casual change: digital is the biggest health care transitional and transformational change the sector has seen. Thirty-six years ago, when ten Hoedt was fresh into the medtech industry, health care advances were driven by individual technology developments – the myriad innovations and incremental changes back then came thick and fast, from stents, valves and TCTs to every scientific breakthrough since. The future would be the continuation of that product technology, but overlaid with the whole range of IT, digitization and cloud care opportunities, said ten Hoedt.

In this market of altered opportunities, does it matter who the key players are in 10-15 years time?  The non-traditional health care players are driving much of the current change, if not visibly leading the sector. For ten Hoedt, it’s no time to be defensive, given the patient care delivery revolution that is underway. It is immaterial who the players are “so long as health care is being delivered in the right way. It’s up to the medtech players who are in the space today to keep up the pace or stay ahead of the game.”

The big medtech organizations could be disrupted too, he acknowledged. “There are players on the periphery who could have profound impact on the way health care is delivered.”

Who And What Can Make A Difference In Digital

In this pathway stretching ahead, players do not need to be a Medtronic PLC or a Johnson & Johnson to be influential in digital delivery. They simply need to decide where they plan to make a difference in a product area that will deliver unique value added for a patient. In that sense they are letting others take ownership of the broader digital environment.

“Every medtech company should identify the role they want to play in this changing world and be very intentional about  it” – MTE chair Rob ten Hoedt

 

“What I would recommend for every medtech company is to identify the role they want to play in this changing world and be very intentional about  it – don’t drift on the tide.” They need to be ready to face stiff competition too. “The moment you want to play in digital and data, you’re going to come up against some formidable players from outside the medtech arena who will be able to add value to this. Look at where you can do added value and where you fit into the scheme of things,” he advised.

Cultural And Generational Change In The Medtech World

The employees coming on board now in the medtech space – the millennials among others – are looking at life and work in a different way. Physicians are slowly changing as a group – they are keen on the “work-life balance,” and the younger generation of physicians certainly are very different personalities to their older peers. The had been a big change, ten Hoedt said.

They are also much more comfortable with the digital aspects of life. But they are also realizing that current health care delivery systems are in reality very unsophisticated. For instance, the trusty fax machine has long since been an anachronism, “but we as companies in health care still receive more than half of our orders on a fax machine!”

Is that a reality check?  “Certainly, it’s a reality that we must deal with; we have all these big dreams but we have some catching up to do. If it doesn’t connect, it won’t work.”

The MDR  ̶  Another Opportunity For Positive Change

The EU Medical Device Regulation (MDR, 2017/745), coming into effect on May 26, 2020, is a concern for the industry: it will be good for some, but not for everyone. The smaller companies must decide to embrace, not resist it. “Don’t believe Brussels will suddenly turn around and say, ‘We made a mistake,'" ten Hoedt said. There are risks for manufacturers – especially concerning the prospect of bottlenecks arising from notified bodies not being accredited and not up to speed in a 2020 time frame. “Industry can’t control that, but what we as an industry need to do is get ourselves ready, embrace the change and recognize that a good regulation is better for all of us.” Later, if bottlenecks start to impact patients or companies, the industry will do what it can to offer solutions. “But that stage will only be reached if the pressure is fully on."

The EU is certainly monitoring it, and the Commission has an increasingly well-informed understanding of where the pressures might arise. At present, however, they still seem to be under the impression that they can manage through this. “I am not yet in the position to say that won’t be the case,” said ten Hoedt.

“I want to give [Salvatore D’Acunto, who heads the unit in charge of medical technology at the European Commission] all the benefit of the doubt to allow it to succeed, and give him space to do that.” We should all know in a year from now whether it has worked or not, said ten Hoedt, but he added that it was pointless to simply sit on the sidelines and criticize in the expectation or fear of things going wrong. “Let’s just make sure that, as an industry, we have done our own work, and have things under control with the notified bodies and the Commission, and then see where we  land.”

As of now, there are no contingencies planned, and no extension of the May 26 deadline in prospect. But when might industry decide its needs to start playing a bigger role? “If it becomes clear that innovation is not able to get to the market, and the traffic jam is so big that in fact nothing can get to patients, then that is a real problem and it shouldn’t happen. We should not have patients waiting to be given innovative treatments, and that’s one clear example where we would ring the alarm bell.  Another is where existing technology on the market is suddenly no longer available.” These are cases of patients being impacted negatively.“If anything impacts patients, we’re going to make a lot of noise about it,” said ten Hoedt, adding that the medtech industry’s potential issues would be of a lesser priority. (Also see "Commission’s D’Acunto Tells EU Industry To Talk Less About Bottlenecks" - Medtech Insight, 10 Jun, 2019.)

Does this and the pressures coming to bear on medtech from all directions make the industry of 2019 a less attractive place to be than in 1983 and the decades since?“The impact that medtech has on patients is profound. I am never worried about the ability of this industry to show value. For us, attracting people to work in this industry is not a problem. Look at the money that flows into start-ups, which is growing again very nicely, especially if you include digital. IT-enabled continuous monitoring and early diagnosis will help us underline the quality of care. Europe remains strong, especially in the area of creativity in Europe – which is our forte in this world.”

And the MDR will likely not have the negative effects on start-ups that some are claiming. “The world of start-ups won’t go away because of issues with the regulatory environment. Start-ups have to develop technology in principle for global use, and they need to cross many barriers. The EU regulations are going through a very natural evolution, and I am sure that we will be able to adapt, even though it’s tough, and costing money.” 

And transparency is ever more crucial for medtech manufacturers. “We must live in that glasshouse. And as companies that develop technologies that touch people’s lives, we must earn and keep the full trust of users and patients,” he said. “But we should never be nervous, and I have no problems with people like the ICIJ trying to turn stones over to find things.”

 

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