Sean Loughlin: Five ‘Disruptors’ Facing the Medical Device Industry

Is the medical device industry ready for the market changes that are unfolding in healthcare? A new report from A.T. Kearney, a global management consulting firm, suggests that many of them may not be, calling on such companies to “urgently revise their business models.”

The report, Medical Devices: Equipped for the Future, notes that past winning strategies can prove ineffective in “fast-moving times” and leading companies can find themselves on the sidelines.

“It can happen quickly, and the medical device industry is next in line,” the report bluntly declares.  It describes “disruptive change” that is unfolding, saying that the relative stability enjoyed by the industry for decades will not last.

“Companies will no longer be able to earn premium margins by simply selling clinical features and new devices into established market spaces,” the report reads. “Rather, they will need to look at new segments and, particularly, new end-to-end solutions to secure additional revenue and maintain margins.”

The report names five primary disruptors that it says will “transform the industry.” They are:

  1. Power shift to payers and providers
  2. Heightened regulatory scrutiny
  3. Unclear sources of innovation
  4. New healthcare delivery models
  5. Need to serve lower socioeconomic classes

You can get more detail about those disruptors and see some eye-opening charts by clicking on the full report.

What do you think? Is the outlook in the ATKearney report fair or too alarmist? Are there other forces at work to consider?

Sean Loughlin is the senior director of communications at AAMI.

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