Tapping into a healthcare buyer’s decision-making process is crucial for medical device manufacturers to remain viable. The industry has gone through significant changes in a relatively short time frame with the economic downturn, as well as the passage of the Affordable Care Act and health system consolidations. For instance, there’s been a shift to value-based care – as opposed to a fee-for-service philosophy – and higher deductibles for insurance plans, according to PM360. Meanwhile, medical spending hasn’t recovered at the same rate as the U.S. economy overall.
What impact might bundled payments have on innovation?
This has led to bundled pricing models that allow providers to establish a set price for individual services that are part of a holistic treatment. According to Becker’s Hospital Review, this may end up putting a limit on innovation in the medical device manufacturing industry. The reason behind this is that bundled options restrict physicians from selecting potentially more effective technology to perform a procedure, which would ultimately result in more satisfied patients. However, the cost-cutting attraction of bundled options remains a central piece of the puzzle. The lingering question is whether or not cost trumps quality in the decision-making process.
Are a la carte options a viable alternative?
On the other end of the pricing spectrum, product splintering is marketing strategy that can benefit both medical device makers and healthcare systems. Because hospitals and private practices are both looking to decrease the costs associated with medical equipment, it’s imperative for manufacturers to devise new ways of marketing their products and services to demonstrate a more effective product will reduce costs over time. While bundling offers a cost-effective alternative, the impetus behind value-based care is providing patients with the most effective treatment for their specific issue.
“Disruptive forces in the medical device market may in fact come from consumer goods makers such as Apple.”
Influencing the conversation
Disruptive forces in the medical device market may in fact come from consumer goods makers such as Apple. According to Med Device Online, the tech giant is already making inroads with the Food and Drug Administration to discuss how its software and wearable technology like the iWatch may influence the medical device market.
As a result, the messages that medical device manufacturers send to medical professionals are critically important. On one hand, effective physician marketing depends on accurate data, meaning manufacturers know who they’re appealing to. On the other, the message using a splintered product offering allows buyers to purchase individual components that may more effectively address the customers’ needs. At the same time, splintering bundled items gives device makers the opportunity to diversify their email marketing campaigns with product promotions that can be personalized for specific physicians.