SMART MEDICAL DEVICES PAVE THE WAY FOR VALUE-BASED CARE TRANSFORMATION AND INNOVATIVE REIMBURSEMENT MODELS

Smart medical devices are poised to revolutionize the healthcare landscape by significantly enhancing the delivery of value-based care (VBC) and subsequently transforming reimbursement models. By seamlessly integrating advanced technologies such as artificial intelligence, real-time monitoring, and data analytics, these devices empower healthcare providers with actionable insights and personalized patient data.

This enables a proactive approach to healthcare management, optimizing outcomes, reducing inefficiencies, and lowering overall healthcare costs. As a result, the implementation of smart medical devices aligns with the principles of value-based care, emphasizing improved patient outcomes and experiences, leading to a paradigm shift in reimbursement models that incentivize quality and patient-centric care delivery.

Facilitating this transformation is a network of connected smart devices and objects that can communicate with each other. 

IoT in Healthcare 

The Internet of Things (IoT)¹ is defined as a system of wirelessly connected and integrated digital systems that provides the capabilities to collect, send, and store data over a network. IoT promises the healthcare industry many benefits, such as streamlining and enhancing care delivery to predict health issues accurately.  

In the healthcare industry, IoT is referred to as the Internet of Medical Things (IoMT)². An example of IoMT is smart medical devices. These medical devices utilize sensors, connectivity features, and advanced analysis technologies (AI and ML) to generate, collect, analyze, interpret, and transmit health data. Examples include stationary, implanted, or wearable medical devices. 

The global smart medical device market is estimated to reach $322 billion by 2027³, with more than 25% of the American population⁴ using wearable medical devices by the end of 2023. 

The rate of adoption and integration⁵ of smart medical devices is largely driven by: 

• Unaffordable healthcare reimbursement models, such as fee-for-service models in the United States. 
• Growing pressures placed on healthcare systems by an aging population and a rise in chronic diseases such as cardiovascular disease, chronic kidney disease, diabetes, and hypertension. 
• Increasing public expectations for personalized, accessible, and convenient care. 
• Staffing inefficiencies

Smart medical devices can help address these current healthcare challenges by delivering more targeted and precision medicine, supporting remote patient monitoring, helping healthcare professionals work more productively and efficiently, improving the speed and access to accurate diagnosis, improving medicine adherence, and helping reduce healthcare costs. 

When Smart Devices Meet Value-Based Care 

The gaining momentum and continued adoption of VBC models provide MedTech companies with an important role to play in supporting the shift to VBC. As MedTech companies are well-positioned to help mitigate ongoing challenges faced in health care, such as access, care coordination, and cost. 

For VBC principles to be realized, all types of data are required. 

Wearable smart medical devices and remote monitoring devices are becoming more prevalent, as these devices allow vital health signs to be transmitted directly to healthcare professionals. Real-time monitoring of a patient’s health may result in operational efficiency and significant cost reductions. 

Examples of smart medical devices collaborating with health systems to generate value.  

• Outcomes-based reimbursement model: Medtronic, one of the world’s largest medical technology companies, announced an outcomes-based risk-sharing agreement with Aetna⁶. The agreement covers Medtronic’s MiniMed 670G system and measures health outcomes for both type 1 diabetes and type 2 diabetes patients who move to Medtronic’s insulin pump with SmartGuard™ technology. A portion of Medtronic’s reimbursement is tied to meeting clinical improvement thresholds. This agreement between Medtronic and Aetna reinforces the shift towards VBC as it looks to improve patient experience and outcomes while reducing the total cost of care. 

• Improving patient outcomes: Zimmer Biomet⁷ has created the world’s first smart knee implant (Persona IQ), providing surgeons with more options to better match a patient’s bone anatomy. A “smart” stem extension (containing a sensor) is attached to the bottom portion of the knee implant, capturing data. The information collected allows the healthcare provider to remotely monitor a patient’s functional progress throughout the stages of recovery. Mymobility provides patients with a constant connection to their care team, providing personalized reports and support. Thus helping minimize complications after surgery by engaging and empowering the patient. 

• Remote patient monitoring: Remote monitoring solutions⁸ enable more effective and efficient care by connecting providers and patients in real-time. For example, IntelliVue MX40⁹, a wearable patient monitor by Philips, wirelessly tracks patients’ vital signs, allowing patients to move around a hospital or care center. The system connects to a 24/7 information center, empowering patients to take a more active role in their care, as they feel supported by their care team. With real-time data, physicians may be better able to proactively manage their patient’s outcomes. At the time of publication, KLAS found that 38% of healthcare organizations using remote patient monitoring reported a direct correlation to reduced hospital admissions, and 17% cited measurable cost savings.¹⁰

Challenges that need to be addressed before the full value of smart devices can be realized

Although the IoMT seamlessly integrates with value-based principles, challenges persist. MedTech companies have the opportunity to overcome these obstacles by:

Developing an in-depth understanding of end users. As VBC models gain further momentum, there will be an increased adoption of smart medical devices. Meaningful insights and data on patients are essential to VBC. MedTech companies will need to create business models and scenarios to demonstrate how their devices and products improve patient outcomes and create “value” for healthcare stakeholders.

Establishing and maintaining trust in a digital age. MedTech companies and traditional medical device companies need to demonstrate to patients clearly, healthcare professionals, and the public that they are protecting and safeguarding patient data that is generated and transmitted. To establish and maintain trust, companies will need to develop key principles of data management and consent, giving patients control over their own data. 

A significant challenge for MedTech companies lies in convincing clinicians, patients, and other stakeholders of the value proposition embedded in their smart medical devices. Demonstrating the ability to drive better patient outcomes and economics at scale is crucial for widespread adoption. To achieve this, MedTech companies must provide compelling evidence showcasing the cost-effectiveness and VBC-alignment of their smart medical devices¹¹.

Collaboration between MedTech companies and healthcare providers. Successfully integrating and adopting smart medical devices into an established healthcare pathway is challenging. It requires collaboration and cooperation across the healthcare ecosystem. Collaboration, such as partnerships and joint ventures, between healthcare providers and MedTech companies may help ensure the effective analysis, management, aggregation, and transmission from smart devices. Effective collaboration helps all stakeholders improve their understanding of patient needs, resulting in the delivery of proactive and cost-effective care. 

Final Word 

The MedTech industry is characterized by a constant flow of innovation, making it well-positioned to address the challenges faced in care coordination, such as reducing hospital readmissions, improving patient engagement, lowering medication non-adherence, and increasing disease management. 

To successfully enter into VBC contracts or partnerships, medical device companies will need to convince patients and clinicians of the effectiveness and safety of each device. Without close relationships and partnerships, smart devices may not be able to have their actual value realized. MedTech companies will need to address these challenges if they are to realize and optimize their role in facilitating VBC and developing reimbursement solutions that make good business sense. 

References

1. Kelly JT, Campbell KL, Gong E, Scuffham P. The internet of things: Impact and implications for healthcare delivery. Journal of Medical Internet Research. 2020;22(11). doi:https://doi.org/10.2196/20135

2. Internet of Medical Things – an overview | ScienceDirect Topics. www.sciencedirect.com. https://www.sciencedirect.com/topics/computer-science/internet-of-medical-things

3. Smart Medical Devices Market Worth $23.50B by 2027. Medical Product Outsourcing. Accessed November 28, 2023. https://www.mpo-mag.com/contents/view_breaking-news/2021-10-19/smart-medical-devices-market-worth-2350b-by-2027/

4. Phaneuf A. Latest Trends in Medical Monitoring Devices and Wearable Health Technology. Insider Intelligence. Published January 13, 2023. https://www.insiderintelligence.com/insights/wearable-technology-healthcare-medical-devices/

5. MedTech and the Internet of Medical Things How Connected Medical Devices Are Transforming Health Care.; 2018. Accessed November 28, 2023. https://www2.deloitte.com/content/dam/Deloitte/tw/Documents/life-sciences-health-care/Medtech%20and%20the%20Internet%20of%20Medical%20Things.pdf

6. Medtronic, Aetna Announce Outcomes-Based Agreement for Diabetes Patients. AJMC. Published June 26, 2017. Accessed November 28, 2023. https://www.ajmc.com/view/medtronic-announces-outcomes-based-agreement-with-aetna-for-diabetes-patients

7. Persona IQ® The Smart KneeTM. www.zimmerbiomet.com. https://www.zimmerbiomet.com/en/patients-caregivers/persona-iq.html

8. Mohammed KI, Zaidan AA, Zaidan BB, et al. Real-Time Remote-Health Monitoring Systems: a Review on Patients Prioritisation for Multiple-Chronic Diseases, Taxonomy Analysis, Concerns and Solution Procedure. Journal of Medical Systems. 2019;43(7):223. doi:https://doi.org/10.1007/s10916-019-1362-x

9. IntelliVue MX40 Patient Wearable Monitor. Philips. Accessed November 28, 2023. https://www.usa.philips.com/healthcare/product/HC865350/intellivue-mx40-patient-wearable-monitor

10. Beecham report: The power of IoT to transform healthcare. Software AG. Accessed November 28, 2023. https://www.softwareag.com/en_corporate/resources/iot/ar/iot-medical-device-report.html

11. MedTech and the Internet of Medical Things How Connected Medical Devices Are Transforming Health Care.; 2018. https://www2.deloitte.com/content/dam/Deloitte/tw/Documents/life-sciences-health-care/Medtech%20and%20the%20Internet%20of%20Medical%20Things.pdf