This post is the second in a two-part series on vertical integration and data management in medtech.
Many medtech companies are taking the opportunity to build data collection and analytics into their devices, with the goal of leveraging insights to help grow their businesses and improve the overall standard of care. During the second part of a panel discussion at the recent AdvaMed conference, ZS Principal Brian Chapman discusses data acquisition in medtech with four industry leaders: David Harding, senior vice president of business development at Exact Sciences; Anthony Spero, chief operating officer at Partners Pharmacy and president of Ascend Health; Ivan Tornos, former worldwide president of urology and critical care at Becton Dickinson; and Ted Langan, senior vice president of sales at Briova. Here’s what they had to say:
Brian Chapman: I’d like to talk about how data is being leveraged in light of new healthcare trends. Historically in medtech we have not focused on data; we primarily use it to prove outcomes. But using data to keep track of an individual patient—in the same way that Amazon or another tech company might approach it—is very different. Is this an important capability?
Ted Langan: We are critically focused on data. We want to look at how we acquire data around our patients, not only to help our clients understand their cost basis but also to become more predictive with our patients. We want to help them understand when they are at risk. Who are the patients that we can provide additional handholding or counseling to, to help them avoid problems as they move through the continuum of care? You have to demonstrate the value not just at the time of sale, but how it impacts patients across the life of the equipment. It is so important to us as a payer to understand and reinforce where high-quality care is being created.
I think data acquisition and data management will be critical going forward. I was at Baxter for 35 years. If I could go back and talk to myself 35 years ago, I’d want to get ahead of the curve on data acquisition, data management and the ability to monetize depending on the data stream.
David Harding: Totally agree. Acquisition of long-term outcomes data is absolutely critical to demonstrating the value of your device or diagnostic to a payer. Routine screening over many, many years is crucial and acquisition of that data is essential to demonstrate to our IDN and health insurance partners that we're making a difference.
BC: Are you building that internally or are you buying it? Where is this competency coming from?
DH: It's coming both from our own patient information as well as acquisitions with partners. With our Cologuard product, we have great data visibility. We know which doctor orders the test, whether a patient has completed the test, the outcome of the test, what insurance the patient has, and when they are due for rescreening. This is tremendously useful for managing patient compliance as well as managing our business. This, combined with outside data that might be able to track things like broader patient populations in screening participation is highly useful.
Ivan Tornos: We do both buy-in and collecting data. In the world of medtech, the key change is that we've gone from using data to prove what's happened in the past, to get reimbursed or what not, to predict the future. We collect data in terms of the different stages of the procedure. How do you insert the catheter? How do you maintain it? All the data gets collected and tracked. Now, we're in a position where we can tell a hospital early on what the likelihood is of one of our devices being able to cause an infection given their current utilization. It's more of a forward-looking [system] than we’ve used in the past.
TL: This is absolutely what the payers are looking for: that device companies include this kind of diagnostic and predictive capability within their products. That collection of data and that sharing is vital. Also, patient data security is such a critical issue. You can't put the patient data at risk at all, or payers aren’t going to look at you.
DH: I think you have to be smart about it and think strategically about the needs of your business versus what can you easily outsource. There are lots of players on the data side who can really assist you in capturing broad-based outcomes data—really good institutions that mine electronic health records data that you can pull in. There's no need for you to recreate that capability. It will be extraordinarily costly to do so. Wherever possible, we like to partner with companies who bring this capability to us and leverage their skills sets as needed.
BC: Ted, what would be your perspective when you see device companies that are starting to work in the channel, potentially even billing payers?
TL: We are excited about anything that will give us more data around how our patients are being treated—how well the outcomes are coming through—and that can start to lower the cost of healthcare.
BC: Anthony, to many of us your space can be murky and hard to characterize, and also, generally speaking, very data poor. Do you have a vision for how that could become a revenue stream?
Anthony Spero: The data points and information we have available are robust. When you look at the number of lives that flow into that information, and exactly what and how many medications a patient is taking, you can see the clinical outcome. You'll have a whole host of folks who will want access to that data. We haven't fleshed it out entirely, but we know it might be a bigger opportunity than the device itself.
BC: If you took the Silicon Valley approach, you would give the device away for free and mine the data.
IT: The No. 1 hotel chain in the world, AirBnB, doesn't have any hotel rooms. The No. 1 taxi company in the world, Uber, does not own any cars. As you think five to 10 years out, maybe the No. 1 medical device company in the world will generate most profits from non-tangibles. I think that's the trend that we're seeing in my space. It's going to be a huge opportunity for all of us in the future.
AS: We talked a lot about numbers and analytics and vertical integration and all these great things that you can look in a spreadsheet and identify. I also think that from the provider side, there's a tremendous amount of focus on patient experience. Every one of us will go into a hospital, into a physician office, a nursing home or assisted living [facility]. We have family members who are receiving services every day. I don't want us to lose sight of that. I think there are opportunities to measure the patient experience.
BC: And the insights you get from those measurements can then be used to improve the patient experience.
DH: There's a famous Chinese proverb that asks, ‘When's the best time to plant a tree?’ The answer is, of course, 20 years ago but the second-best time is today. I think about that proverb in the context of data collection around outcomes. We can interface with each other across the healthcare ecosystem to the extent that we continue to build those data linkages and really mine that information to understand how to optimize outcomes. The better we do at that, the better we are going to be at delivering fundamentally improved healthcare in the United States and across the world.
This conversation has been edited and condensed.