The med-tech industry is undergoing a significant transformation. Once centred on hardware-based category leadership, the sector is evolving towards digital products taking centre stage.
Signifying this shift, the artificial intelligence (AI) in healthcare market is expected to expand at a CAGR of more than 30% until 2030.
Drivers for change
Three primary driving forces are propelling this change: margin pressure, competition, and evolving patient demands.
The challenge of meeting shareholder expectations amidst stagnant or declining margins has intensified the need for innovation. While the industry has seen remarkable advances in hardware, the untapped potential of software, particularly AI algorithms, remains colossal. With software boasting average margins of more than 60%, transitioning to digital solutions offers unprecedented profit potential.
Meanwhile, competition in the med-tech space is intensifying. HealthXL’s 2022 study shows tech giants like Alphabet, Microsoft, Amazon, and Apple making substantial investments. Amazon’s $3.9B acquisition of One Medical last year exemplifies this trend, marking a deeper dive into patient-centric healthcare that integrates in-person and virtual care to match the growing patient demand.
Supporting patients holistically with data and digital
The evolution from solely providing the best equipment to enhancing both the patient and clinician experience requires integrated solutions that address their needs holistically, beyond just hardware. For instance, the virtual assistant Eric, a joint pilot project by the Gemelli Hospital and Olympus, supports patients before and post-colonoscopy.
For Mike Ryan, global head of digital engineering in Olympus’ digital health business, hardware connectivity is key.
“Unlike siloed solutions often found in the med-tech hardware world, connectivity and flexibility in the digital space are paramount. Strong connections through well-defined APIs and top-notch software development kits must leverage modern technologies such as AI,” Ryan said.
Connected digital solutions can simplify clinical staff routines to free up capacity for improved patient care and provide real-time assistance to the clinician, such as automated polyp detection or Olympus’ Endoeye-3D providing navigation support in laparoscopic surgeries.
Smart data utilisation has the potential to revolutionise entire healthcare systems, such as by pinpointing high-risk colorectal cancer patients to ensure they are prioritised for endoscopy. Paired with efficient scheduling, resource allocation is optimised for those most in need.
The future: Rapid innovation
Quick development, deployment and integration cycles are needed to improve healthcare delivery.
Benjamin Wilhelm, global head of partnerships at Olympus digital health, sees acceleration opportunities for implementing digital health.
“Companies from diverse industries are collaborating to connect the dots along the entire care pathway. Partnerships between med-tech firms and digital disruptors will define the next competitive frontier and are a speedboat for getting digital solutions to patients,” Wilhelm commented.
Connecting with users and healthcare institutions throughout the development process is key to meet their rapidly changing needs.
Jakob Garrow, global head of product at Olympus digital health, highlighted the importance of connecting with customers.
“Successfully developing digital solutions requires fast iterations by outcome-focused teams, maintaining regular contact with customers to take and implement feedback,” Garrow explained.