Integrated Hospital Solutions

There is increasing interest from healthcare institutions to provide value-based healthcare in order to ensure that the right people, institutions, and resources deliver healthcare services that ultimately meet the health needs of the target population. What does this mean for healthcare companies? There is an opportunity to support hospitals and other healthcare providers in the transition towards value-based healthcare through systems that optimise the way they operate in order for them to compare outcomes. As a consequence, there is increasing interest in integrated hospital solutions that focus on a variety of areas such as patient experience and staff engagement, supply-chain costs, product availability, and clinical and operational strategies.

Medtronic’s Approach

In 2013, Medtronic announced the formation of Medtronic Integrated Health Solutions, a new business focused on developing novel long-term partnerships with hospitals, physicians, payers & health systems to deliver high quality care in a cost effective way. Medtronic’s services include the management, modernisation, optimization and development of cath lab facilities in Europe and Middle East, with the goal of increasing efficiency and value in hospital cardiology departments.

The objective of Medtronic’s Integrated Health Solutions business is to drive value-based healthcare by designing tailored solutions that optimise both costs and outcomes. The aim is to improve quality of care, enhance operational performance and provide higher financial returns for hospitals and other stakeholders within the ecosystem.  Managed Services for CathLabs (CLMS), and also Operating Rooms and ICUs, is one of the high impact solutions to hospitals and is the focus of this article. Integrated Health Solutions is vendor independent and manages all aspects of a cath lab, regardless of the products used within them. This is the core difference between Medtronic’s Integrated Health Solutions CLMS and other hospital solutions in the market: the ability to take complete responsibility for the management of cath lab operations that goes beyond the service offering.

Medtronic’s solutions are built on 4 pillars:

  • Turnkey set up: Fund and deliver state of the art infrastructure and capital equipment
  • Manage: Manage non-clinical operations through on-site managers to enable focus on patient care
  • Optimize: Deliver efficiency gains and optimize patient pathways, leveraging Lean Six Sigma expertise and a catalogue of Best Practices and benchmarks
  • Develop: Accelerate patient access to care, develop health providers’ services, and enhance patient experience and reputation

Medtronic’s Integrated Health Solutions go beyond the management of cath labs and focus on creating efficiencies along the entire care continuum, supported by system components such as telehealth. The main goal is to deliver value, optimize outcomes and cost of care delivery, through vendor-independent solutions and long-term partnerships.  Medtronic’s focus, over recent years, has been to expand beyond devices to healthcare services and solutions. Much attention has been given to expand into other therapy areas such as diabetes and obesity. Exhibit 1 describes Medtronic’s approach in 2016.

Integrated Health Solutions today has over 80 ongoing long-term partnerships, offering care providers under contract a collaboration platform, facilitating and orchestrating continuous benchmarking as well as joint design and dissemination of best practices.

Exhibit 1: Medtronic’s Approach, Europe, 2016

medtronics approach.gif

Boston Scientific’s Approach

Boston Scientific’s focus over recent years has also been to expand beyond devices to healthcare services and solutions aiming at improving operational and financial performance. Boston Scientific launched the ADVANTICS solution for performance optimisation, care pathway transformation, and patient management, with the aim of bringing value-based solutions by advancing outcomes and minimising the cost of cardiovascular care delivery to healthcare systems.
Boston Scientific’s aim is to support providers with ways to engage with patients suffering from chronic cardiovascular diseases, by introducing a digital health platform that connects providers with population data and enables remote patient monitoring. The objective is to drive operational excellence in Cardiovascular and Gastrointestinal (GI) labs and to advance patient outcomes, reduce procedure costs, and enhance quality. Boston Scientific’s business model is based on a partnership approach, through focused solutions that will drive more pull-through without the company owning the cath lab itself.

Medtronic versus Boston Scientific’s Approach

Both Medtronic and Boston Scientific are transitioning away from devices and complementing their portfolio with innovations within the hospital solutions space that focus on hospital efficiency and reducing healthcare costs. There is an emphasis on the patient care pathway model and helping providers improve the ways they engage with patients suffering from chronic cardiovascular diseases. In addition, both companies are offering solutions across the care continuum, from early intervention and treatment to monitoring. Medtronic acquired Cardiocom to extend its presence in chronic disease management, and in 2015, Boston Scientific had a strong focus on pilots across the care continuum.

Whilst there is a common aim to drive hospital efficiency, both companies have very different approaches in the market. Medtronic’s solution offers full management of a cath lab, no matter which devices are used, whilst Boston Scientific does not manage them. Medtronic’s business model focuses on services such as funding and delivering state of the art infrastructure and capital equipment, as well managing and optimizing non-clinical operations, using their catalogue of Best Practices and benchmarks. Medtronic’s Integrated Health Solutions support the vision and transition towards value based healthcare. The business model currently employed by Boston Scientific involves partnering with cath labs in a consultative manner to provide caregivers with robust benchmarking data and analysis of ongoing operational and financial performance.

Whilst Medtronic and Bostin Scientific are moving into the solutions services space, direct (Abbott, BD) and indirect competitors (GE Healthcare, Phillips) are not yet providing total solutions, but are specialising in individual solutions such as data analytics and workflow efficiency on a smaller scale. However, Philips Healthcare, traditionally positioned within the imaging space, has been winning major managed equipment services deals, often in cath labs. However, compared to other companies in the market, Medtronic is ahead of competitors when it comes to Integrated Health Solutions, with a clear first-mover advantage in this space, and this is an important differentiator in the market. As the focus of value-based healthcare becomes more important, competition will strive to develop solutions and systems to cater to this rising need.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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