Consumer technology and telecom companies are changing the pace of innovation in health care, putting traditional med tech firms in an uncomfortable position, according to a new report from PricewaterhouseCoopers.
Consumer tech and telecom names like Verizon, AT&T and Sony may be relative newcomers to health care, but that doesn’t mean they’re not going to give industry stalwarts a run for their money.
According to a Monday report from PriceWaterHouseCoopers (PwC) the medical technology field is in the midst of big change. Medtech is transitioning from a growth industry to a more mature, stable one. But it’s also being shaped by a changing health care economy that’s more consumer-centric and emphasizes comprehensive approaches to treating diseases and providing care, the report said.
And increasingly, companies accustomed to spending heavily on years of research are facing new competition from consumer tech startups and mobile app makers that are steeped in a culture of being faster, better and cheaper.
“The new entrants from other industries have a much more aggressive view of what innovation is than traditional medtech companies,” said Chris Wasden, managing director of PwC’s health care strategy and innovation practice. “That will put these traditional medtech companies in a very uncomfortable mode . . . they’re not using to operating at the step-change mode of innovation.”
Learning how to “innovate innovation”
Some of the bigger newcomers mentioned in the report include Verizon, which offers an FDA-cleared remote monitoring system, Qualcomm Life, which provides a wireless platform for connecting a range of devices and apps, and Reebok, which has partnered with startup MC10 for a wearable sensor that monitors the severity of head injuries in contact sports like football.
PwC’s report was based on dozens of interviews with medtech and digital health leaders from big and small companies. While they overwhelmingly agreed that “the way [they] innovate has to be innovated,” Wasden said, few have actually chosen to do it because the disruption is so great.
“There are very few companies that view themselves as innovation pioneers,” Wasden said. “Many think of themselves as fast followers.”
Traditional medtech companies have also been slower to adopt new social, mobile, analytic and cloud technologies, the report said. And that means greater opportunities for nimble startups and consumer tech companies familiar with using these kinds of tools to appeal to customers and consumers.
Finding new ways to improve care for the consumer
Not all traditional medtech players are taking a back seat when it comes to innovation, the report acknowledged. Medical device giant Medtronic acquired telehealth company Cardiocom this summer in an effort to get closer to the consumer. And medical device maker Covidien has stepped up its mobile and cloud services to improve the way it supports patient care and hospitals.
Going forward, which companies will be the ones to succeed? Those that can figure out how to appeal to the consumer.
“The people that will win in healthcare . . . are those that understand the customer the best and understand how to change consumer behavior most effectively,” Wasden said. “If you continue to focus on the doctor or hospital, you’re not going to be a winner in the future.”