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Should MedTechs follow surgeons or patients?

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The traditional strategy of the medical devices industry has been to maximise the experience of the surgeon
This has resulted in paying little attention to the demands of patients
Surgeon populations are shrinking while the general population is growing, aging, becoming ill and demanding care
This creates care gaps, which are challenging to reconcile, prolong unnecessary suffering and cause unnecessary deaths
Reconciling the shrinking supply of health professionals with the increasing healthcare demands has given more weight to patient demands
MedTechs will be obliged to recalibrate their approach to patients principally because regulators are involving them in the approval process of medical devices
Patient centric digital therapeutic solutions help to reduce care gaps
However, developing such digital therapeutics and involving patients will not come easy to traditional MedTechs because of their lack of capabilities and organizational culture
Notwithstanding, to be relevant in the future, MedTechs will need to continue to improve their ties with surgeons while increasing their focus on the large and rapidly growing patient demands

Should MedTechs follow surgeons or patients?

Traditional MedTech business models are overwhelmingly focussed on manufacturing physical devices for surgeons to use in episodic, hospital-based, interventions. Over decades, a symbiotic relationship between surgeons and medical device manufactures has been established and led to significant commercial success for both parties. This has meant that MedTechs have not paid the attention they should have to the growing demands of patients, which include primary prevention and screening through diagnosis and staging to treatment, rehabilitation, and the subsequent management of a condition. Should medical device companies double-down on their business models to follow surgeons, or should they change approach and follow patients?

In this Commentary

This Commentary has 2 sections: (i) Follow surgeons, and (ii) Follow patients. Section1 suggests that medical device companies will need to continue their mutually beneficial relationships with physicians but tighten their governance ties. Further, leaders might consider some aspects of surgeon populations, which could impact their business model. These include: (i) the increasing shortages and aging of surgical populations, (ii) burnout among surgeons that prompts early retirement, and (iii) the prevalence of unnecessary surgeries. Section 2 considers the business model of MedTechs following patients and suggests that this is likely to become more relevant in the future as regulators are encouraging patient participation in the approval process for medical devices. Further, patient demands are supported by advancing technologies and smart platforms such as PatientsLikeMe. Patient centric solutions tend to be digital therapeutics, based on software rather than hardware. Solutions that address patient care pathways require scarce digital, data management and artificial intelligence (AI) capabilities, which MedTechs tend not to have. To stand a chance of attracting these, MedTechs will need to develop non-hierarchical, agile working cultures with the capacity to innovate at speed. The significance of business models that improve patients’ care pathways is illustrated by two recent, transformative MedTech deals. Takeaways suggest MedTechs should continue following surgeons, albeit under enhanced governance principles and involve patients in the development of devices and increase their capabilities to provide patient centric digital solutions.

SECTION 1
Follow surgeons

The medical devices industry is “big business”. In 2021, the US devoted ~US$199bn (~5.2%) of annual national health expenditures to medical devices. Over the past four decades mutually beneficial relationships between surgeons and medical device companies have been built, and this forms the basis of a dominant industry business model to “follow surgeons”.

Surgeons play a crucial role in the conceptualization, development, and enhancement of medical devices; they influence hospital purchasing decisions, and are compensated for providing these services. Further, they are remunerated for representing MedTechs at conferences, giving speeches on behalf of corporations, and playing a critical role in training physicians to use devices because their efficacy is often associated with a specific use technique that needs to be taught. Further, surgeons may receive research grants from MedTechs and be promoted because of their association with a successful innovation. More recently, with the rise of medical device start-ups, the financial incentives to surgeons have included equity stakes in lieu of cash for various contributions. This means that significant financial ties between medical device companies and surgeons are relatively common, which can be the basis for potential conflicts of interest.

MedTechs code of conduct

AdvaMed, a US medical device trade association, based in Washington, DC, is aware of such conflicts and suggests that physicians should be compensated at fair market rates for work they perform. The Association is against equity compensation and says that there should be no link between the commercial success of a medical device and a physician. AdvaMed encourages voluntary, ethical interactions and advises member organizations and physicians to disclose all potential conflicts of interest, which include consulting arrangements, training, support of third-party educational conferences, participation in sales and promotional meetings, gifts, grants, and charitable donations.

Despite AdvaMed’s best efforts its suggested code of conduct does not appear to work. A bibliometric analysis of 100 clinicians receiving compensation from 10 large MedTechs and published in the November 2018 edition of JAMA Surgery found that conflicts of interest were not declared in 63% of 225 research projects that resulted in publications. Given the increasing significance of environmental, social, and governance (ESG) criteria among socially conscious investors to screen potential investments, it seems reasonable to suggest that MedTechs might consider regularly disclosing all their financial ties with surgeons and health professionals.

More issues to consider

In addition to the increasing significance of ESG issues, there are some further questions associated with MedTech business models that follow surgeons, which corporate leaders might wish to reflect upon. These include: (i) the surgeon population is aging and shrinking, (ii) surgeons have a higher propensity to burnout than other medical specialities, and (iii) surgeons are responsible for a substantial number of unnecessary operations. Let us describe these in a little more detail.

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Shrinking surgeon populations

Throughout the world, populations of surgeons and health professionals are shrinking. Findings of a 2016 US Department of Health and Human Services report suggest that by 2025, there will be shortages in 9 out of 10 surgical specialties in America, with the greatest reduction in ophthalmology, orthopaedics, urology, and general surgery. Research prepared for the Association of American Medical Colleges (AAMC) by the healthcare consulting firm IHS Markit and published in June 2020, suggests that, by 2032, the US could lack ~23,000 surgeons. Although the US has a higher number of total hospital employees than most countries, nearly half of that workforce is comprised of non-clinical staff who are not directly involved in delivering care. For instance, compared to Italy and Spain, America has fewer practicing physicians per capita: 2.6 per 1,000 inhabitants, compared to 4 in Italy and 3.9 in Spain. According to the World Health Organization (WHO), the global shortage of health workers is projected to reach 13m by 2033.

Care gaps

One reason for this projected shrinkage is that a large percentage of surgeons are nearing traditional retirement age. For instance, more than 2 in 5 currently active American doctors will be ≥65 years within the next decade. Further, people are living longer, and a substantial percentage are not staying healthy and need care. According to the US Census Bureau the number of Americans ≥65 is expected to reach ~84m by 2050, which is ~2X the 2012 level of 43m. Among this older population there is a large and growing prevalence of chronic lifetime diseases such as cancer, diabetes, heart conditions, respiratory diseases, and mental illness. In the US there are ~150m people with such conditions and ~40% of these are living with ≥2 chronic diseases. According to the US Centers for Disease Control and Prevention, ~90% of the US$4.1trn annual medical spend (~20% of the country's GDP) is attributable to chronic disorders. Such trends magnify the vast and growing pressure on a shrinking pool of health professionals, and this creates challenging care gaps.

Digital therapeutics

Care gaps will not be reduced by medical schools training more physicians and nurses. This takes too long to have an impact on the size of the problem. The UK has attempted to reduce care gaps by importing physicians: ~190,000 of the 1.35m NHS staff in England report a non-British nationality, and ~27% of NHS staff in London report a nationality other than British. This policy raises some ethical issues as most are imported from developing economies with underdeveloped healthcare systems and a scarcity of health professionals. The option to import physicians is not open to the US because its immigration policies make it difficult for international health professionals to work in America. Recently, many advanced industrial economies have sought to reduce their care gaps by developing digital therapeutic solutions for patients, which extend the reach of physicians by overcoming time, place and personal constraints that limit care delivery.

Surgeon burnout

Findings of a research study published in the June 2018 edition of the Journal of the American College of Surgeons suggest that the prevalence of burnout among surgeons has increased over time. The research references the 2015 Medscape Physician Lifestyle Report, which argues that burnout among surgeons is on the rise and documents burnout rates among various specialisms ranging ~37% to ~53%, with general surgeons nearing the top of the list at 50%. Research on the impact of the COVID-19 crisis on healthcare professionals published in the December 2021 edition of the Mayo Clinic Proceedings, found that ~1 in 3 US physicians expressed a clear intention to reduce their work hours, and ~1 in 4 intended to leave their practice altogether. Such trends are concerning considering the aging of the US population and the subsequent increased pressure this puts on healthcare systems.

Many factors contribute to surgeon burnout. Common causes among American surgeons include long work hours, delayed gratification, challenges with work-home balance, and issues associated with patient care in a changing healthcare ecosystem. According to the WHO’s International Classification of Diseases, (ICD-11) burnout results from “chronic workplace stress that has not been successfully managed”. It is characterised by being emotionally exhausted, feelings of cynicism and loss of empathy and a sense of low personal accomplishment with respect to one’s work. A meta-analysis of the prevalence of burnout published in the March 2019 edition of the International Journal of Environmental Research and Public Health suggests that surgeons experience elevated rates of depression and psychiatric distress and posits that burnout among junior surgeons is at an epidemic level, which affects patient safety, quality of care and patient satisfaction.

Unnecessary surgeries

Another issue for medical device leaders to consider is the incidence rates of unnecessary surgeries. These are any intervention, which is not needed, not indicated, or not in the patient’s best interest when weighed against other available options. Unnecessary surgeries are not a recent phenomenon: they are a significant reality that continue to expose patients to unjustified surgical risks. In 1976, the American Medical Association (AMA) called for a congressional hearing to address the issue, claiming that each year there are “2.4m unnecessary operations performed on Americans at a cost of US$3.9bn and that 11,900 patients had died from unneeded operations”. Across the US, the phenomenon is patchy. A cross-sectional study of five US metropolitan areas and published in the January 2022 edition of the Journal of the American Medical Association found significant differences in physician treatment recommendations across a range of specialisms.

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Most common unnecessary surgeries

The incidence rates of unnecessary surgeries appear more prevalent in spinal, gynaecological and some orthopaedic procedures. Clinical trials have shown that a significant percentage of spinal fusions for back pain do not lead to improved long-term patient outcomes when compared to non-operative treatment modalities, including physical therapy and core strengthening exercises. Despite these findings, spinal fusion rates continue to increase significantly in the US.

Further, women are at high risk of unnecessary hysterectomies and caesarean sections. Although these rates are moderating, a study for the American College of Obstetricians and Gynecologists, suggested that hysterectomies were improperly recommended in ~70% of cases, even though there were non-surgical alternatives. Hysterectomies can lead to bladder and bowel dysfunction, prolapse, and incontinence, as well as a 4-fold increased risk of pelvic organ fistula surgery. A study in Health Affairs found that caesarean rates varied significantly (from 2.4% to 36.5%) in hospitals across the US, even among those with low-risk pregnancies.

Another study published in Health Affairs suggests that after patients received information on alternatives to joint replacement surgeries, ~26% had fewer hip replacements and ~38% had fewer knee replacements. Each year in the US, >1m total hip and total knee replacement procedures are performed.

SECTION 2
Follow patients

It is not uncommon for MedTech leaders to say that they put “patients first” when developing devices. However, although things are changing, which we describe below, this is more rhetorical that factual. MedTech R&D teams tend to be relatively remote, inwardly focussed, and, particularly in the US, patient voices are generally ignored and not perceived as an integral part of the process.

However, the healthcare ecosystem is changing and “following surgeons” cannot constitute an entire strategy for MedTechs. In the future, MedTech business models that follow patients will be driven by patients’ knowledge and their increasing demands to participate in their healthcare decisions, the movement towards personalized care, and regulators’ mandates to incorporate patient perspectives into the development of medical devices and approval processes (see below). Earlier, we suggested that, when surgeons engage with medical device corporations there are competing interests, which often are not disclosed. By contrast, patients are primarily driven by their own safety and wellbeing, which, contrary to surgeons, are grounds for promoting mutual accountability and understanding with healthcare providers.

To remain relevant, MedTechs will need to incorporate patient perspectives and patient data into their business models, not least because patients are co-producers of their health and represent a consistent factor, probably the only consistent factor, throughout the care pathway. Further, patients, empowered by digital therapeutics and health information from wearables, hold invaluable personal data, which are often critical to improving care pathways, and outcomes.

PatientsLikeMe

Patient voices were loud and influential long before MedTechs recognised the significance of engaging patients in development processes. Consider PatientsLikeMe, a digital platform founded in 2004, with a mission to improve the lives of patients by sharing knowledge, experiences, and outcomes. The company quickly grew to become the world’s largest integrated community, health management, and real-world data platform. Via the site, users can document and share their experiences, track their conditions, and communicate with others living with similar disease states. Data generated by patients who use the site are systemically collected and quantified by the company, while providing users with an environment for peer support and learning. Today, PatientsLikeMe has >0.8bn users representing >2,900 conditions. The company makes money by selling the information patients share in de-identified, aggregated, and individual formats. In 2019, the platform was acquired by the UnitedHealth Group, an American multinational healthcare and insurance company, after former President Trump’s administration forced it to seek a buyer because its majority owner was China-based iCarbonX.

Increasing patient input in approval processes for medical devices

What will make MedTechs wake up to the significance of patient perspectives in the development of medical devices are initiatives and demands made by regulators. For the past decade, European regulators through the European Medicine’s Agency (EMA). have solicited patient inputs into their approval process for medical devices. In 2014, the FDA and the EMA created a joint working group to share knowledge and information on patient engagements. In 2007, the Clinical Trials Transformation Initiative (CTTI), a public-private partnership was co-founded by the US Food and Drug Administration (FDA) and Duke University and modelled on the EMA Patients’ and Consumers’ Working Party. CTTI’s mission is to develop and drive patient involvement in the development and approval of devices, which is expected to increase the quality and efficiency of clinical trials. Since its foundation, the CTTI has become a leader in evolving and advancing clinical trials, making them more efficient, and patient focused.

In December 2017, a nationwide request in the US was made for patients and patient advocate groups to join the CTTI and become more involved in healthcare product development and in the FDA product reviews. This call came ~1 year after the 21st Century Cures Act became law in December 2016. The Act’s intention is to expedite the process by which new medical devices and drugs are approved by easing the requirements put on companies seeking FDA approval for new products and indications. Under Section 3001 of the Act, the FDA is required to report any patient experience data that were used to support an approval process and to publicly provide aggregate reports on agency use of those data at five-year intervals. This suggests that MedTechs wanting new FDA approvals will need to provide patient-driven data.

These initiatives are driven by an ever-improving consumer-controlled social and health data ecosystem, advancements in personal genetic understanding, and increased healthcare cost-sharing. Patient-driven changes are systematically beginning to inject more than token patient participation and viewpoints into all stages of device and drug development.

A cultural shift

Improving patient engagement in the development process of medical devices will be challenging for MedTechs that have focussed their business models mainly on manufacturing physical devices and building relationships with surgeons, rather than developing digital assets for patients. The latter requires scarce data management and AI capabilities, which do not thrive in conservative hierarchical organizations. Rather, they require a culture, which promotes innovation at speed and agile ways of working. A recent survey of European executives by The Economist Intelligence Unit, found that poor collaboration between a company’s IT function and its business units slows progress in a firms’ digital objectives. MedTechs that are slow to develop digital capabilities that address patient needs and integrate these into their business models risk not being a party to decisions shaping the emerging healthcare ecosystem.

The increasing significance of scarce AI talent

Digital therapeutics predicated upon AI techniques, which are growing in significance with healthcare systems, require large amounts of data collected from electronic health records (EHR), medical images, and information from patients’ wearables. Key areas where AI techniques can improve the delivery of care include: (i) diagnoses, (ii) managing patient journeys, and (iii) improving patient engagement. Streamlining these three areas can ease administrative burdens on healthcare systems, optimize physicians’ time, improve patient outcomes, and lower costs. However, a significant challenge for MedTechs is the scarcity of essential capabilities to develop digital strategies. A 2020 research report by Deloitte Insights suggested that there are significant shortages of “AI developers and engineers, AI researchers, and data scientists”. Corporate leaders might consider bolstering their chances of attracting digital and AI talent by: (i) leveraging their company’s unique value and purpose, (ii) prioritizing and offering best-in-class training over recruiting, (ii) prioritizing diversity, and (iv) engaging with universities.

Transformative MedTech deals

The significant shift in MedTech strategies towards patients is demonstrated by two recent transformative deals: Teledoc’s 2020 acquisition of Livongo and Siemens Healthineers AG’s 2021 acquisition of Varian Medical Systems Inc. Both combinations emphasise the significance of digitalization and demonstrate the strategic shift towards patients.

The US telehealth giant Teledoc’s acquisition of Livongo for US$18.5bn was the largest digital healthcare deal in history, which valued the combined company at US$38bn. Livongo, founded in 2014, provides digital therapeutic solutions to improve patient health outcomes for a range of chronic conditions including diabetes, and hypertension. The other transformative MedTech digitalization deal was the German health imaging giant Siemens Healthineers AG’s acquisition of cancer device and software specialist Varian in April 2021 for US$16.4bn. Siemens Healthineers is the leading supplier of medical imaging solutions used to support the planning and delivery of radiotherapy. Varian was the leading supplier of radiotherapy solutions. Both deals were substantially larger than Amazon’s US$0.75bn 2019 acquisition of PillPack, and Google’s US$2.1bn 2021 acquisition of Fitbit, and they signal a new and permanent path for MedTech companies towards a digital-first future.

Takeaways

To remain relevant MedTechs will need to continue their symbiotic relationships with surgeons albeit in a modified form, while becoming significantly more patient centric and digitally savvy. However, a bigger challenge Western MedTechs will have to face in the next five years is whether they can develop digital therapeutic solutions for patients fast enough to compete with the looming threat from China’s large and rapidly growing capacity to develop and market medical robotics for surgeons and innovative digital therapeutics for patients. This will be the subject of a forthcoming Commentary.

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