Cover Story: 2015 Healthcare Trends
Could surgeons come to rely on cellphones to help monitor patients in the operating theater, or on Facebook for a second consultation? Would it be faster to take a trip to Europe to get access to a life-saving technology that could take years to arrive in the United States? Will cost pressures force hospitals to bring more repairs in-house than they had previously been prepared to manage?
Some of those concepts seem too far off to ponder, but a year is a lifetime in the technology field. So on the cusp of 2015, we talked with a trio of experts in the medical device field to solicit their projections for the next 365 days.
Dr. Paul Wetter, chairman of the Society of Laparoendoscopic Surgeons, believes that the biggest technological advancements in the healthcare device industry for 2015 will undoubtedly occur at the intersection of mobile computing power and medicine.
Wetter, who said he has been “tracking the things related to these technologies for a number of years,” predicts a “tsunami of change” in the field of programs “that interact with that supercomputer in your pocket, your phone.”
Although robotics-assisted surgery is known as an expensive technology — sometimes prohibitively so — Wetter believes that additional advances in the field can help offload the computing power required to support such high-end techniques.
“Just about everything in our lives today has been robot-assisted,” he said. “There are computers in our refrigerators, in our cars, just about every place else. Those same things are coming into the surgical field. Even though it’s an expensive technology … prices are going to come down, technologies are going to evolve.”
Hospitals have so much invested in their existing equipment infrastructure, Wetter said, that it will only make sense for them to harness the power of those systems in the future build-outs of their inventory.
“As they see some of these devices come online, they’ll see them as being more useful,” he said. “Why would someone build an expensive computing thing to run a piece of equipment in the operating room when you have more computing power in your cellphone? They’ll bring a lot more benefit to their programs as those technologies come up more.”
If such a scenario seems too far-fetched to conceive, Wetter points out that the processing power in a cell phone is greater than that used by NASA to put a man on the moon. He calls distributed cellphone computing power “probably one of the least known things in most areas of medicine that’s going to have the most impact and be the most disruptive.”
“Just like you look at Yelp to tell you what’s a good restaurant, or you use Uber to get a ride, there are hundreds of devices that are going to allow us to link a cellphone to things we would have monitored in an ICU 10 years ago,” Wetter said. “Just like computers were to the music industry and Yelp was to restaurants, this is going to be very, very disruptive.”
Wetter also believes that maintenance, which “has been a big problem because it requires an entire team” to manage, will become easier as technology advances; from the development of preventive maintenance apps to other technologies that could notify maintenance crews to come and fix the problem. After all, he said, “I have a fire alarm system and a smoke alarm system for my house accessible on my cellphone.”
Just as processing power and maintenance can be crowdsourced, Wetter said that he expects professional education for healthcare to follow a similar tack. As surgical technologies intensify in complexity and ubiquity, avenues for training healthcare professionals in their specialties are likely to expand to offer additional opportunities for group education. He pointed to the fellowship programs offered through his own professional society as valuable in “exposing folks to changes in technologies” and “making different fellowships around the country into groups,” as social media pages are run.
Under current conditions, Wetter said, “people are training in one place, and the exposure they get is to the surgeons in one hospital, and they might practice in one way.”
“Cleveland Clinic did a study that said 20 to 30 percent of all second opinions were different opinions,” he said. “If medicine were really a science, all second opinions would be the same. If you can crowdsource information, with each person contributing a little bit of the knowledge, then you can get that up to 100 percent of the people agreeing what should be done in the best interests of the patient.”
Wetter, who was among the first authors of interactive medical textbooks, said that educational software is expected to proliferate in the coming years as well. He described the number of medical app developers as “astounding.” Approaching 9 million in 2014, that figure represents a 50 percent increase over year-ago totals, he said; “a number that’s growing logarithmically.”
For a field such as surgery, which represents significant cost opportunity as well as significant insurance liability, he expects that technological solutions in education, advanced training, or peer-to-peer communication can help to provide better outcomes as well as reduce costs. Social networks and related avenues can help music performers, community organizers, and athletes to reach their audiences, and Wetter believes that technology can help surgeons “take better care of their patients and make better decisions.” He blamed “this very toxic malpractice climate that doctors have been in” for creating an atmosphere of “defensive medicine [that] has become so ingrained.”
“It’s like soldiers going into these war zones and they’re going to try to have every kind of resource available to help them do the job they need to do,” Wetter said. “Our most expert human beings — our sports figures, our heroes — they can’t shoot every basketball perfectly. You can have a scientist or a surgeon who’s the best in the world, but they don’t do everything perfectly.”
“[There are] 2.5 billion surgical procedures performed around the world annually,” he said. “If we can slowly lift the bar for two to three percent of patients, we can have an effect.”
Engineer Karl Leinsing, President of ATech Designs Inc., foresees that the technological expansion that’s coming in medicine might not necessarily be one of brand-new innovation, but of importation. Of the major nations whose governments oversee the approval of new medical devices — a list that includes the European Union, Canada, Japan, Australia, and the United States — America is “the hardest, the costliest, and takes the longest” to grant access to new devices, Leinsing said.
Leinsing is currently in clinical trials to bring a cardiovascular device to market in Europe, he said. The requirements overseas are 50 patients and six months of trials, figures he estimated could have to be multiplied by a factor of five or six to bring to the U.S. market.
“It costs $80 million to do some of these clinical trials, and people can’t risk it anymore,” Leinsing said. “The FDA will change standards and policies in the middle of a program. You’ll start with them and have to go back and repeat all the clinical studies. I’ve seen companies go out of business.”
Under those conditions, Leinsing said, Europe is frequently a gatekeeper for technologies that are eventually expanded to markets in Asian and South American nations, where earning a CE mark will serve as an indicator of the viability of a device.
“Europe is becoming the leader in standards and the leader in terms of technology,” Leinsing said. “Some people say the devices are not as robust, but if you’re looking for a life-saving device, and you’re on your last breath, then you want to go to Europe because all the devices are there.”
“India is one of the most cutting-edge countries in the world, but they don’ t have their own regulatory body,” he said. “They say, ‘Go get that approved in one of the other five [nations], and you can sell it here.’ ”
The end result, Leinsing said, is that “European people are going to get these devices first, and if you want these technologies, you have to go to Europe first.” Once a device is approved in Europe, however, it may be considered salable in the United States, he said. And although the European markets are desirable, there is no other nation in the world that spends as much on healthcare products as the United States.
“While you’re still doing stuff with the FDA, you can be selling products in quite a few markets in other parts of the world,” Leinsing said. “It helps you with another round of funding when you’ve got approval and you’re already selling it to patients.”
The dilemma, Leinsing said, is when the cost of bringing a potentially life-saving device to market potentially exceeds the timeline of its development. When hospital liability exceeds the cost of purchasing new equipment, however, health networks aren’t willing to chance it. Conversely, Leinsing said, if a technology can be proven to reduce risks of infection, recurrence, or similar issues, its retail price increases because the added safety is worth the added cost.
“Everybody gets sick and everybody wants the best,” he said. “People don’t want to pay for it, but they want the government to make sure it’s safe. At some point, the human race has got to understand that there’s some level of risk you have to take for cutting-edge technology and to get it early.”
But that cost is still a defining characteristic of every purchasing decision a healthcare system makes, Larry Nguyen said. Nguyen, president of the Woodinville, Wash.-based ultrasound repair company, Summit Imaging, believes that much of it is driven by the continued impact of consolidation on the bottom lines of hospitals and healthcare facilities. As they do so, he believes that more of them will begin to look for ways to save on outsourcing, including on repair costs.
“It’s more expensive to outsource service calls because you’re paying for the time of outside service engineers to maintain the equipment as well as additional downtime,” Nguyen said. “Hospitals are looking for businesses that are looking to support what they’re trying to do: taking that equipment in-house to leverage the current infrastructure.”
Health facilities are trying to escape OEM pricing pressures for sales and service, Nguyen said, which drives them to the independent market. The pressure of cost savings is an opportunity cost endured in the pursuit of revenues in that market, he said, and for the ISOs whose field service technicians support hospital calls, “there’s going to be some fallout” as hospitals feel pressures to eliminate service calls.
“They’re looking to provide the support without sending a service engineer to the hospital,” Nguyen said. “We’re going to see field service teams shrink in the independent market.”
Nguyen also expects that these cost pressures will affect repair methodologies and the quantification of components and hardware used to repair medical equipment. He predicts that an improved repair process, from both cost and outcomes perspectives, will be the focus of reimbursements under the Affordable Care Act. That’s where businesses like Summit Imaging could stand to compete by streamlining repairs via remote dial-in tech support, and thereby limiting the length and number of service calls, Nguyen said.
“The reason is because we’re seeing parts going into the equipment to repair them, but it’s kind of a gray area as to the quality of repairs,” he said. “As of the moment, it’s kind of all over the board, but the companies that are really generating high-quality products are the ones that are repairing the parts and the probes with the OEM parts.”
Nguyen believes that alternatives to outsourced service costs are driving healthcare facilities “to really analyze and look at how they support their equipment.”
In the next 365 days, Nguyen said, “imaging is still the dominant technology” in healthcare. As the useful life of the installed base of X-ray, CT, and MR equipment may approach two or three decades, he said, maintaining it is “really a business case issue” for healthcare facilities. But for a mature yet versatile modality like ultrasound, which isn’t advancing as much on the device side as it is the software side, customers may be taking the retrofit approach to keeping their equipment operational.
“If I have the equipment, I’m going to use it for its useful life,” Nguyen said. “There’s still no replacement. The way that they can get those savings is by eliminating outsourced service calls. That’s going to squeeze down on independent companies that rely on those equipment teams to generate their revenues. I think that hospitals are trying to peel back that layer.”