Frost & Sullivan’s says medical technology (MedTech) firms are experiencing a rapid transformation as hospitals gradually move from high-acuity and high-dependency care to decentralized and patient-centric care models.
The global MedTech market, comprising traditional MedTech and new value-added business models, is expected to reach $529.23 billion by 2024.
Traditional MedTech offerings, characterized by hardware or device-focused products to treat a specific condition, still account for the larger portion of the market and will register growth at 2% by 2024.
New value-added models, based on solutions such as insight-as-as-service and managing the disease condition through remote patient monitoring, connected care, and shared-risk contracts, will generate revenues of $171.65 billion by the end of the forecasted period and expand at a compound annual growth rate (CAGR) of 14.3%.
“MedTech companies’ business models no longer aim to sell products with superior features addressing clinicians’ needs. These models focus on saving the cost of care for payers, improving outcomes for patients, and enabling operational or workflow efficiencies for providers,” said Srinath Venkatasubramanian, healthcare & life sciences industry analyst at Frost & Sullivan.
He added that the evolution of regulatory framework and processes for breakthrough devices and digital capabilities such as artificial intelligence-based solutions have boosted the innovation capability and improved market access for medical device companies.
Venkatasubramanian added: “The influx of disruptive startups and pure technology firms into the care provision landscape has increased the competitive intensity in the sector. As a result, large MedTech companies are exploring options to build adjacent assets in the digital space through mergers and acquisitions (M&As) to sustain revenue growth. The rising competition has led to the emergence of platform solutions beyond hardware with value-added services to differentiate from low-cost peers.”
Frost recommendations
Omnichannel sales and innovative clinical engagement: MedTech companies should boost digital channels of engagement and collaborate with customers to co-create real-world evidence and build data-oriented outcome metrics that can enhance the value proposition of the solution, assisting in the sales and marketing process.
Care delivery beyond the high-acuity hospital setting: Through solutions such as remote patient engagement, medical telemetry and telehealth, MedTech companies can build a strong value proposition for cost-effective care delivery processes and address the accessibility and resource constraints in high-growth emerging markets.
Insight-as-a-service with a focus on performance data: Intelligence devices architecture, which enables data capture, data processing, and the generation of insights with secure, interoperable communication architecture, can enable providers to derive value from MedTech solutions by addressing the challenges and create a monetization model for MedTech companies.
New payment models for managing disease: As hospitals focus on reducing reimbursement cuts for readmissions and improving their incentives from payers, MedTech companies need to build monetization models for expanded care delivery, offering solutions that facilitate cost-effective total patient management.
