Reinventing Industry’s Role in Healthcare
The following essay is by Neil Fraser, president of Medtronic Canada. It is excerpted from A Canadian Healthcare Innovation Agenda: Policy, Governance, and Strategy, co-authored by Scott Carson and Kim Richard Nossal of Queen’s University.
By Neil Fraser
We in the medical technology industry are rethinking how we see ourselves and the nature of our businesses. We are finding that simply delivering an innovative product to the hospital is not enough. If the care pathway design has to change, we need to get more deeply involved in the process of delivering a successful patient outcome. We still intend to provide high-quality, innovative products, but we also want to take accountability for the performance of those products through the health system to the patient’s outcome. That is leading us into all kinds of areas, such as improving the productivity of the programs that our products are used in, and helping get patients out of the hospital and back home by providing technology that can follow patients in their homes remotely.
Another issue is the cost of managing a population of patients with chronic disease. Increasingly we are taking on the role of helping the payer, which in Canada is the government, to manage the patient population — not the clinical care, because that is still provided by doctors, but everything else. And to do that, we are providing more systems engineering and analytics to help improve productivity in delivering the outcome.
If industry could sell outcomes rather than products, we would be able to apply all of the qualities of what we do, in terms of service, engineering, and knowledge of clinical cohorts, to the process as well as to the product, and deliver it at a lower overall cost and with at least an equivalent outcome.
That may seem like a strange idea, but it can be illustrated with an example. When a patient has a hip or knee replacement, the company supplying the artificial joint might propose to manage the patient’s post-operative care using remote technologies. We know that 40 percent of the cost of the whole episode is the post-operative care, so by managing it more closely, looking for infections, attending to pain and getting the patient mobilized in an aggressive way, we could reduce the length of stay, the medication usage, and the cost to the healthcare system.
If industry could sell outcomes rather than products, we would be able to apply all of the qualities of what we do. . . to the process as well as to the product, and deliver it at a lower overall cost and with at least an equivalent outcome
In the United States at least, there is a payment model for that kind of process. Essentially, it consists of an envelope that pays for everything: the doctor, the product, the rehab, and the cost of any complications. What we would propose to do, as a supplier, is reduce the cost of the whole envelope.
Finally, while Canadians tend to think of healthcare as an essential but hugely expensive social service, countries such as Denmark and Israel have shown it can also be an engine of economic development. As a matter of policy, they promote the use of local products through procurement, and help companies with prototyping and early clinical data. Healthcare and industry work closely together to provide economic benefits as well as better care.
One of Denmark’s most successful companies is Novo Nordisk, a world leader in the diabetes field. Other Danish standouts include Coloplast and Leo Pharma. With more than six times Denmark’s population, Canada has few, if any, global healthcare stars, even though there have been, and continue to be, plenty of promising startups. By redesigning care pathways to enable the adoption of innovative technologies and by improving the procurement and HTA processes, we would encourage companies like BresoTec and Calgary Scientific, and new ventures that have yet to get off the ground, to succeed both at home and abroad.
If we start now to shift the focus of Canada’s healthcare systems towards a more value-based approach to care delivery, if we begin breaking down the barriers to innovation, and if we create more trusting and collaborative partnerships among governments, healthcare providers and industry — those are big ifs, but if we can do all that — then I predict that 10 years from now we will look at the latest Commonwealth Fund survey and find Canada right at the top of the list.
A Canadian Healthcare Innovation Agenda: Policy, Governance, and Strategy, edited by A. Scott Carson and Kim Richard Nossal. Montréal and Kingston: McGill-Queen’s University Press, Queen’s Policy Studies Series. © 2018 The School of Policy Studies, Queen’s University at Kingston. All rights reserved.