Pro-dex

Jim Abbott Brings Inspiration, Team Spirit to AAOS

When reflecting back on AAOS 2012, some attendees will fondly recall the Pro-Dex, Inc./ODT magazine (Orthopedic Design Technology) dinner at Morton’s steakhouse with Major League baseball player, Jim Abbott.

Many know Abbott as the left-handed pitcher who was born without a right hand. Others, who have been fortunate enough to have the opportunity, know him as an inspiring professional speaker who helps individuals and companies alike understand what it means to adapt.

The willingness to adapt, says Abbott, is the willingness to change, and mold ourselves in order to meet the obstacles in our own way. Adapting is what enables us to move forward toward our goals.

Facing obstacles has become ubiquitous for many in the medical technology industry. There’s acute pressure to not just innovate, but to get innovations approved by the FDA and have them be cost – and clinically-effective.

Add on growing global competition, intellectual property threats, the high cost of resources, tighter regulation and proposed tax increases, and the relevancy of Abbott’s topic, “Teamwork in tough times,” was a home run.

In addition to productive networking and enjoying world-famous cuisine, guests from leading medical technology companies had the opportunity to gather at their designated tables and discuss a question related to how they had approached or adapted to a challenging situation.

These lively and interesting discussions made for a valuable exchange of ideas and appreciation for the unique challenges faced in the medical technology industry. They also set the stage for Jim Abbott to share the acronym he developed for the word “adapt.”

A - Adjustability
D - Determination
A - Accountability
P - Perseverance
T - Trust

Having overcome many obstacles in his baseball career, Abbott used those experiences to elaborate on each of the letters and to illustrate how they could be applied to the medical technology industry.

The “P” in the ADAPT acronym— perseverance—is vital to long-term success in the medical technology industry and was especially important to Abbott’s baseball career. After winning the gold for the United States in the 1988 Olympic games in Seoul, Korea Abbott was drafted by the California Angels. He had finally made it to the Major Leagues.

Abbott proved that, one-handed or not, he was a pitcher to be reckoned with. In 1993, now pitching for the New York Yankees, he threw a 4-0 no hitter against the Cleveland Tribe—the first Yankees pitcher to do so in a decade.

It’s interesting, shared Abbott, how those who make it to the “big leagues,”– be it in baseball or a career—often let their guard down. They get comfortable and start making costly mistakes.

In Abbott’s case, in the prime of his career, he started making critical pitching errors. It all came to a head in 1996 with a devastating pitching year. That season, he won only two games—losing 18. He was told that his struggles and mistakes were killing the team and, at 30 years old, he was released from his contract with the Angels.

Failures of this magnitude would cause many to throw in the towel. But that, imparted Abbott, is where perseverance comes in.

After not playing baseball for a year and a half, Abbott was given a second chance to play … back in the minor leagues. His passion for the game and his determination led him to swallow his pride and pitch for small town teams alongside 18 and 19-year old players.

His perseverance paid off and after a summer in the minor leagues, the Chicago White Sox welcomed him back to the Majors.

That experience illuminated to Abbott that, no matter how far we go in life, we will continue to be tested. There is no finish line. Perseverance is about not letting your circumstances become an excuse—a powerful reminder for many in the medical technology field.

At the end of the day, says Abbott, we all will be challenged. But in order to adapt and get through it, the real question to ask yourself is, “What are you going to do about it?”

A few of the questions that were asked to our Jim Abbott event attendees were:

In your career discuss a colleague who helped you “Think Differently” in approaching a challenging situation. What attributes did this person possess that inspired you?

Share a challenge in your career that forced you to adapt to a new way of doing things in order to achieve your goals.

Discuss elements or aspects of a successful team you have been a part of in your career. What made that team different from others you were a part of?

We’d love to hear your insights and experiences related to these questions as well.

Playing It Safe at AAOS

The day began bright and early at 7:30am. Though there was a slight drizzle, the line of volunteers for the shuttle bus to the 13^th AAOS Safe and Accessible Playground Build was long and full of energy.

Over 200 AAOS attendees, Kaboom! staff and local neighborhood residents joined together at the Telegraph Hill Neighborhood Center (Tel-Hi) excited for the opportunity to create a safe play area for the community’s children and families.

Since its inception, AAOS’ safe and accessible build project has created over 60,000 square feet of play space, bringing safe, wheelchair-accessible play areas to over 20,000 children.

Local and national sponsors provided coffee, breakfast and lunch for the volunteers and the bright purple shirts, quirky hats and big smiles of the Kaboom! team brought enthusiasm, fun and flare to the project.

Project organizers had hand-drawn signs designating the teams (“Star” team, “Fishbowl” team, “Baseball” team, etc.) that the volunteers would break in to once building began, creating an efficient, streamlined building process.

Opening ceremonies began at 8:30am with a fitting Andre 3000 quote, “You can plan a pretty picnic, but you can’t predict the weather,” followed by laughter, cheers and warm-up stretches that readied the team to build.

Volunteers from various medical technology companies, hospitals and community organizations worked side-by-side mixing cement, moving large tubes, screwing in footholds for the rock wall, shoveling sand and a host of other building activities.

Lively music played in the background while the wide-eyed, curious faces of the children in the classrooms at the Tel-Hi center peered from the windows above—anxious to see what was being built for them.

“It is incredibly rewarding to have the opportunity to offer something like this to a community that the whole family can enjoy,” shared Pro-Dex, Inc.’s customer service manager, Johanna Casas.  “We’re all working side by side to create something meaningful that makes a difference in a child’s life.”

Another volunteer, Fred Brown, operations at Orchid Orthopedics, noted that, “It’s great to give back to a neighborhood and be a part of making people’s lives better – physically and mentally.”

In addition to Pro-Dex, Inc., other sponsors of AAOS’ Safe and Accessible Playground Build included Medtronic, Stryker, DePuy Orthopaedics, Inc., Arthrex and DJO Global.

Once the playground is complete, the Telegraph Hill community will have a 2600 square foot safe and accessible playground that will serve hundreds of kids each day—with and without disabilities.

Winning Strategies for Medical Technology Success

With significant uncertainty and challenges facing the medical and healthcare industry, Pro-Dex, Inc., in partnership with Orthopedic Design & Technology Magazine, selected to host an invitation only dinner with Jim Abbott for medical device executives at this year’s American Academy of Orthopaedic Surgeon’s (AAOS) annual meeting.

As a Major League baseball player, Jim Abbott likely had his fair-share of interactions with orthopedic professionals—but also because he was born without a right hand.

While some might view having only one hand as a weakness, Abbott was encouraged to see it as a strength. From his perseverance and positive attitude, an impressive athletic talent eventually emerged.

Coaches quickly recognized Abbott’s aptitude for pitching and worked with him on developing an innovative glove transitioning technique so he could pitch and catch any ball that came his way.

Slight adjustments, along with extraordinary resolve, led Abbott to be drafted to the Major Leagues and pitch a 4-0 no-hitter for the Yankees.

After retiring from big league baseball, Abbott felt inspired to share his   career experiences with individuals, companies and organizations, as well as his perspective on what it means to A.D.A.P.T. in life and in work.

With the daunting medical device tax, limited Premarket Approvals, funding challenges, increasing global competition, a changing customer base and more stringent regulatory guidelines, it’s apparent that Medtech faces a new business reality.

Most medical technology companies realize that their ability to adapt to these changes is what will ensure their long-term success. But making the necessary adjustments isn’t always a straightforward process. This is why, as Jim Abbott knows well, progressing—especially in tough times—requires a team approach.

In addition to sharing his perspectives on overcoming obstacles, Abbott will also reveal strategies for fostering a collaborative, team-oriented work culture and the attributes that make for a winning team.

For those who are unable to attend this inspiring dinner with Jim Abbott, we are excited to share some of the highlights and key insights with you tomorrow on our blog/website (www.pro-dex.com and www.odtmag.com).

For those of you who are able to attend, we look forward to meeting you and sharing an evening to remember!

If you were to meet Jim Abbott, what questions would you want to ask him as they relate to the medical technology industry?

Do you think that medical technology companies (OEMs and Contract Manufacturers) that emphasize a team approach to product development are better positioned to endure the challenges facing the industry? If so, why?

We value your feedback so please respond back with your thoughts on “Teamwork in Tough Times” and insights about how it benefits the Medtech industry.

AAOS … A San Francisco Treat!

Between February 6^th and February 11th, more than 30,000 orthopedic industry professionals from around the globe will descend on the city of San Francisco for the American Academy of Orthopedic Surgeons (AAOS) 79^th annual meeting.

AAOS’ annual meeting offers a plethora of opportunities for the orthopaedic industry. In addition to 32 symposia by the world’s experts on important industry-related topics and over 200 instructional courses presented by world-renowned faculty, over 450 technical exhibits will be showcasing the “latest and greatest” in orthopaedic products and services.

AAOS’ Technical Exhibits Hall (open Wednesday and Thursday, February 8 and 9, from 9:00 AM – 5:00 PM and Friday, February 10, 9:00 AM – 4:00 PM) gives attendees the opportunity to:

• View cutting edge medical devices, equipment and diagnostic products.
• Compare products first-hand.
• Attend product demonstrations.

Companies that specialize in implants, bone and tissue products, computer software, surgical equipment and instruments relative to the specialty of orthopaedics will be participating.

Pro-Dex will be at booth #4187 – stop by and say hello!

Building a Legacy at AAOS

Starting at 8:30am today, Tuesday, February 8^th, AAOS, in partnership with KaBOOM! will continue their tradition of building a safe, accessible playground so children with and without disabilities can play safely together.

Pro-Dex is proud to be a sponsor of this year's playground build and to volunteer on build day. Watch for our blog post later today where we’ll post pictures and testimonials of our experience building a safe, wheelchair-accessible play structure.

AAOS, and all the sponsors and volunteers supporting the build, will leave the children and families in the San Francisco community a legacy that they can enjoy for generations to come.

A Night to Remember: Dinner with Jim Abbott

Pro-Dex, in partnership with Orthopedic Design & Technology Magazine, will also be hosting a dinner with Jim Abbott, the former Major League, one-handed baseball pitcher. At this invitation-only dinner, Mr. Abbott will share his unique perspectives with a select group of medical devices executives on “Teamwork in Tough Times.”

We are excited to introduce Mr. Abbott to our industry partners and learn from a pro about what it takes to develop and nurture team-building in these tough economic times.

To learn more about Jim Abbott and how he famously threw a 4-0 no-hitter for the New York Yankees (versus Cleveland)—one handed—and his many other impressive athletic and professional accomplishments, visit http://www.jimabbott.net.

We look forward to seeing some of you tonight!

Kangei (Welcome), Japan!

At the Opening Ceremony on Wednesday, Feb. 8, at 4:00 PM, AAOS will recognize Japan as this year’s Guest Nation. There will be special events and activities that will focus on Japan, specific issues facing the Japanese orthopaedic community and recognition of AAOS and the Japanese Orthopaedic Association’s long-standing educational partnership.

Stay tuned for posts related to the above topics, plus…

• Presentations from the Electronic Skills Pavilion on how the orthopaedic community is using social networking and the clinical applications of iPad Apps;
  
  
• Interesting innovations from the exhibit floor!

Over the next few days we’ll be bringing the best of AAOS to you through:

• Our Pro-Dex blog
• ODT’s website
• OrthoTec’s blog … and
• MD+DI’s blog

We hope to get the opportunity to meet you in person and learn more about your AAOS experience as well!

A new, prominent role for medical device contract manufacturing in 2012

Albert Einstein said, “We cannot solve our problems with the same thinking we used when we created them.”

Perhaps this reasoning is why both the 2010 and 2011 Ernst & Young medical technology annual reports reiterate that, in order for original equipment manufacturers (OEMs) to stay competitive and effectively address the business perils facing their industry, they need to:

• Refocus their energies and resources on cultivating non-traditional strategic partnerships (e.g. with pharmaceuticals, information technology, insurance, etc.) and
• Augment their service offerings.

This business model transformation is uncharted territory for most OEMs. Fortunately, a reflection of 2011 demonstrates that medical device contract manufacturers (CMs) are uniquely positioned to support OEMs on this paradigm-shifting journey, making the trek less arduous.

While OEMs concentrate their attention on expanding into entirely new kinds of products and complementary services, CMs are able to protect their OEM partners’ existing commercially viable technology and, in some cases, enhance them for further competitive advantage.

Success in this effort will depend on CMs that have the ability to:

• Keenly understand the diverse and diverging challenges faced by OEMs
• Effectively and strategically communicate their ability to meet those needs (i.e. in online and offline marketing resources, business development efforts, etc.)
• Clearly demonstrate solution-oriented results.

More than at any other time, win-win partnerships with contract manufacturers will play a significant role in bolstering and protecting medical device OEMs in 2012 and beyond.

Full service value engineering

A common platitude is “the trend is your friend.” But, depending on the direction you’re going, it can also be your foe.

A trend that developed—but certainly didn’t start—in 2011 is that OEMs reduced the number of CMs that they partner with. As the medical device market grew more regulated, the focus turned to suppliers who could offer more full-service capabilities, related to: design and manufacturing services, regulatory expertise, prototyping, testing, procurement, the 510(k) review process, and more.

2012 is likely to extend the emphasis on fewer suppliers who offer more quality, efficiency, and compliance know-how (ISO 13485, 21 CFR Part 820, Quality System Regulation, and current Good Manufacturing Practices). But it’s also likely to bring more complex contracts and supplier agreements.

AdvaMed 2011’s panel, Negotiating Medical Product Outsourcing Agreements: Pitfalls and Strategies, made it clear that there will be more multifarious discussions between OEMs and CMs before partnerships are established. These exchanges are likely to include proper performance criteria, regulatory responsibilities, and clarification of any IP issues.

For CMs with limited service offerings, the trend is not in their favor. Staying competitive will require stronger expertise in design for manufacturing, design for assembly, verification and validation, concurrent engineering (or other efficient development processes), global regulatory requirements, quality controls, and supplier agreements, among other things.

For CMs who’ve long been providing holistic, value-added service offerings, the trend is their friend, but only if they can effectively communicate and demonstrate their agility, flexibility, and broad expertise.

Travelling with the trend will require that contract manufacturers establish and promote comprehensive, strategic outsourcing services that help OEMs meet growing competition and cost pressures, as well as provide a safe harbor for regulatory compliance. 

Contract manufacturers who add any type of risk to an OEM’s regulatory exposure will not make it to first base in these conversations.

Protecting IP while communicating value

Getting new or iterative products to market quickly in 2011 called for tighter collaboration between OEMs and their CMs. But, in part due to uncertainty in new regulations and growing competition, this also raised OEMs concerns about protecting their brands and avoiding infringement of their intellectual property.

From marketing materials to customer audits, CMs needed to be more diligent than ever about protecting the confidentiality of their OEM clients—especially when the CM was prominently involved in product design and development.

Going forward, in order to communicate their impressive, diversified capabilities, it’s imperative for CMs to step-up their solution-oriented thought leadership. This will entail providing current and potential OEM partners with quality information—online and offline—that focuses on helping them solve their problems, save time, reduce costs, and achieve their goals and objectives.

Examples are insightful industry-related articles that concentrate on a specific challenge and offer suggestions for resolution; blog posts on your company website that address common questions or subject matter that’s significant to your potential partners; case-studies that impart the benefits of a strategic alliance while protecting confidentiality and IP.

To remain relevant, CMs need to start seeing themselves first and foremost as a value-added partner—not just for manufacturing, but also for design, development, prototyping, regulatory and quality assurance expertise, and value engineering.

It’s no longer enough to offer quality, full-service solutions. The benefit of those solutions to OEMs must be consistently and increasingly conveyed—long before face-to-face discussions about contracts, responsibilities, and agreements.

Manufacturing quality

Rapid advancements in technology in 2011 also re-emphasized the importance of continuing education and consistent cross-training within a CM organization.

The U.S. Food and Drug Administration (FDA) and global regulatory bodies have made it clear that the medical device OEM is ultimately responsible for the reliability, safety, efficacy, and compliance of its products—regardless of the CMs they work with in the supply chain.

Therefore, CMs that want to offer the most value and strategic support to their OEM partners must consistently enhance the knowledge and capabilities of its associates—especially on the manufacturing floor.

In previous years, the standard was to hire manufacturing employees for their present capabilities, and then offer little to no training or education to help them develop and advance their skills. If an error or oversight was made, the employee was let go.

In an efficient, lean manufacturing environment, this is counter-productive. Errors absolutely need to be taken seriously, but if mistakes are seen as opportunities to learn and improve, manufacturing employees are more likely to promptly relay issues or potential problems. This mind-set leverages a CM’s ability to recognize and achieve quality for their OEM partners.

In addition to increasing employee retention and improving motivation and morale, cross-training and continuing education enables superior products to be manufactured at an accelerated pace.

For example, a CNC operator, who is also trained in the post-machining deburring and polishing capabilities, adds flexibility to the manufacturing process by reducing set-up and hand-off times, improves task speeds, and increases productivity.

Moving in to 2012, CMs that have limited integration of consistent internal and external continuing education and cross-training will ultimately struggle to maintain high quality and safety levels for their OEM customers. Conversely, CMs that emphasize and expand educational opportunities will set themselves, and their OEM partners, apart.

Collaborate internally to maximize value externally

Any organization that is seriously committed to playing in the medtech arena must first recognize that it’s strong internal relationships that allow for great outcomes to be accomplished externally.

As noted in Fifth Wave Leadership, by author Morris Shechtman:

“It’s not that skills and knowledge have ceased to be important. It’s that they’re now just the ante to play the game. As good as technical people are, they don’t give us much of an edge these days …success comes from building relationships, not products.”

No matter what services a company provides or how talented the people are within the organization, if the internal associates are unable to work cooperatively, they leave their company and customers vulnerable and unable to function at full capacity.

Talent without teamwork is simply not effective—especially in today’s fast-paced, hyper-regulated medical device contract manufacturing world. This is why siloed approaches to contract manufacturing have not only become outdated, but they tend to delay product launches and hinder a company’s ability to effectively leverage its expertise.

If a primary survival (and competitive) tool is adaptability, then the key to consistently adding value to customers, associates, shareholders, and the marketplace lies in medical device CMs to emphasize and foster a collaborative work culture. This is what ultimately accelerates product development, elevates quality, and helps OEMs maintain a competitive advantage.

The journey ahead

There’s no question that 2011 presented challenges to both OEMs and CMs. But in every challenge, there’s an opportunity. With an aging global population, longer life expectancies, rising rates of chronic disease, an expectation of high activity in our later years, and under-served patient populations, demands for cost-effective medical technologies that enhance quality of life will only continue to increase.

Meeting those demands in 2012 and beyond will require OEMs to center their attention on clinical and technological innovations that are cost-effective, less invasive, and improve patient outcomes. Delegating other critical areas to high-level, strategic contract manufacturing partners with comprehensive expertise, tight controls, economies of scale, and existing facilities and suppliers will become fundamental to the overall success of the industry.

This realignment has the potential to offer invaluable advantages to both OEMs and CMs while paving a smoother path to business model innovation and improved patient outcomes.

Mark Murphy is president and CEO, Joe Rotino is vice president of quality and regulatory affairs, Rick Van Kirk is vice president of operations, and Tricia Rodewald is director of marketing & strategic alliances for Pro-Dex, Inc. an Irvine, Calif.-based company that designs, develops and manufactures surgical devices, motors, metal components, and sub-assemblies for world-class medical device OEMs.

Pros and cons to the contract manufacturing agreement process

Byline: Joe Rotino

Who’s responsible for device problems if things go wrong? Is it the OEM? The supplier?

If a supplier puts a $.05 part in a $1,000 device, and that $1,000 device causes harm, should the onus fall on the supplier?

Answers to these tough questions were attempted at the “Negotiating Medical Product Outsourcing Agreements” panel at AdvaMed 2011. But not all were satisfied with the answers.

Here are some highlights and lowlights …

Highlights:

• Many agree that standardization of supplier agreements is needed and appropriate for the industry. Change is necessary to make it less complex, time-consuming, and bureaucratic.
  
  
• With growing demand world-wide, the need for medical product outsourcing agreements are increasing and more win-win, collaborative partnerships are being created than ever before.
  
  

Lowlights:

• "Supplier agreements are being sent to companies that need to be reviewed by general counsel due to their complexity."
  
  
• OEM’s see it as a rarity that one company could be strong as a one-stop-shop for their design, development, and manufacturing needs. Unfortunately, this means they tend to overlook CM’s that can actually provide those services efficiently, effectively, and within accelerated time-frames.

When it comes to providing quality, reliable, safe products that benefit consumers, everyone in the MedTech space is responsible. But we need to be careful that the process isn’t so litigiously focused and complex so that no one benefits.

Let’s come up with some standardization for the industry about how we look at a supply base (e.g. holding an ISO 13485 certification). Right now the process is imbalanced and complex.

Fortunately, there are ample opportunities to work together and create win-win partnerships between OEM’s and their contract manufacturers. But in order to grasp those opportunities, the process needs to be drastically simplified.

One thing’s for certain: There’s a lot of uncertainty in today’s MedTech industry

Byline: Tricia Rodewald

“Uncertainty” is a main theme coming out of this year’s AdvaMed convention.

Uncertainty about 510(k) process reforms. Uncertainty about FDA and healthcare reform. Uncertainty about the future of medical device innovation.

From the smallest start-up to the largest OEM, uncertainty affects the industry’s ability to do business in a productive, innovative, confident way.

Two industry leaders (David Perez, President and CEO of CardianBCT, Inc. & Terumo Transfusion and Tim Pratt, EVP, Chief Administrative Officer, General Counsel and Secretary of Boston Scientific Corp.) weighed in during a “CEOs Unplugged” session about how they see all this uncertainty affecting their business: 

• It’s taking longer and costing more to innovate. But MedTech has a fundamental responsibility to patients to innovate and keep improving. Tactical, specific strategies are needed to improve predictability and transparency with the FDA.
• There are unintended consequences when you don’t have a predictable course of action to take with innovation. This makes it difficult to offer patients better products that improve outcomes.
• The drivers of the innovation engine are engineers and R&D people. That innovation engine runs most efficiently and seamlessly if the industry knows things like:
  
  
  • If we apply X amount of effort to Y and achieve Z outcome internally, there’s a predictable outcome in terms of when you can go to market and what kinds of reimbursement structures you’ll have in the U.S. and beyond.

If you don’t have that predictability, innovation will stall.

• The medical advances that tend to benefit patients the most are the big, game-changing innovations that carry the most risk. An uncertain industry with limited predictability is unlikely to take those risks.

Although there’s a strong current of uncertainty in the medical technology space, few are sitting idly by, just waiting to see what happens. By and large, the MedTech industry has determined that, at the end of the day, they want the same outcomes as the FDA— reliable, quality products that benefit patients—and they are committed to working collaboratively toward that goal.

If tweaks and changes can be made to make FDA processes more efficient and predictive, innovation can and will thrive.

Solution-focused approach key to FDA-MedTech future

You’d expect there to be finger pointing and an undertone of hostility at a “CEO’s Unplugged” panel at AdvaMed 2011—especially on the topic of technology and regulation.

But instead of talking about what’s not working and what’s not happening, the CEO panelists used the opportunity to tone down the rhetoric and acknowledge what is working.

These industry leaders voiced that both sides (FDA and MedTech) have come to the conclusion that beating each other up isn’t productive. At least for now, they are ready to play nice—or at least nice-er.

One example of this is the credit the CEO panelists gave to the FDA and their overall appreciation for the role the Administration has to play in the midst of all the limitations and bureaucracy it too must deal with.

The goal, it seems, is to focus on actionable, productive items and come together to improve the medical device innovation and regulatory challenges in the U.S.

It was made clear that, at the end of the day, if both MedTech and the FDA agree that the goal is to attain the best and safest possible outcomes for patients, positive change can be fostered.

While both sides may have different approaches to getting there, keeping that as the destination will hopefully allow for more predictability and consistency from the FDA and more quality innovation from MedTech.

Otherwise, the U.S. will continue to see innovation flourish … outside its borders.

MedTech 3.0 – Paradigm Shifts in the MedTech Business Model 

By Tricia Rodewald 

Innovation is alive and well at this year’s AdvaMed conference. While it’s clear that medical device innovation in the U.S. has taken a hit, there’s important advancement happening around the development of new business models.

The next evolution of the medical technology industry—MedTech 3.0—focuses on collaborative, non-traditional partnerships and a changing customer base.

In a panel discussion with top industry leaders from Pharma (J. Alan Butcher, Endo Pharmaceuticals), Medical Device (Darrell Johnson, Medtronic), Healthcare (Arnaud Bernaert, Philips), and Private Equity (Ali Satvat, Apax Partners) it was emphasized that the ways of doing business in the medical technology space are quickly changing.

One example given is that more and more MedTech companies are partnering with Pharma and IT to enhance their service offerings—versus the MedTech 1.0 and 2.0 models of focusing predominantly on products.

There’s also a significant power shift in the sales model. Selling directly to consumers is the new direction of the MedTech industry.

The MedTech 1.0 and 2.0 business models have focused on selling to hospitals, nurses, doctors, and administrators. But technical, medical-type clinician personalities are unlikely to be the best information deliverers in a MedTech 3.0 world.

How this shift (selling directly to payors) will be implemented is uncertain, but as those in Pharma know, it can be done. Non-traditional strategic partnerships and collaborative business models will play a significant role in navigating MedTech through the murky waters of implementing these business model changes effectively and compliantly.

For everyone in MedTech, the 3.0 business model development is definitely about hedging bets and taking a leap of faith. But in order to stay competitive, viable, and valuable, it’s a critical leap to take.

To say that there’ve been sleepless nights over The Affordable Care Act of 2010 would probably be the understatement of the year. Something that complex and expansive has left many expressing—sometimes vehemently—concern over what it will mean for medical device innovation, quality, and profitability.

Four panelists at AdvaMed 2011(Caroll Neubauer of B.Braun Medical, Inc., John Bishop of Cepheid, Michael Mussallem of Edward Lifesciences Corporation, and Patrick Morrisey of King & Spaulding) weighed in on what health care reform looks like one year later—and what aspects keep them up at night.

A major issue that they all agree upon is the uncertainty of what the law would or could mean. This has been made even more ambiguous with the constant threats to repeal the Act.

While there weren’t clear-cut solutions to the enormous ramifications of health reform, there were some telling (and surprising) insights:

• Approximately 23 percent of doctors are employed by health systems. That’s expected to double in the next few years.
• The answer many are still giving for how to make health reform work is to sacrifice quality of care for cost.
• A serious issue is the aging population. There’s going to be more health care consumed over the next decade and beyond and we’re not as prepared as we need to be.
• Focus in the U.S. is on how to afford the growing need for care. In turn, innovation is taking a back seat.
• Industry surveys since 2008 have revealed that 52 percent of consumers believe that 50 percent of healthcare costs are wasted. 38 percent grade the U.S. healthcare system a D or an F.
• There’s an exodus of start-up medical technology companies bringing their product to market in Europe instead of the US.
• Medical Device Tax is likely to have negative consequences for small start-ups and not-for-profit companies.  
• In 2010 there was a 40% cost increase in getting a product to market. The process is getting more expensive, unpredictable, and taking longer.
• The consensus on the panel is that the FDA needs to make process changes to accommodate the new emerging technologies that are out there. For example, conducting post-market surveillance effectively verses forcing everything to be collected on a pre-market prospective basis.
• It’s important to acknowledge that the FDA is cash-starved too. They didn’t receive any funding in the Affordable Care Act or the Stimulus Act, while their responsibilities have increased. The financial pressures faced by the FDA make it very difficult to operate with the appropriated funds they are given. The reality is that the FDA will be looking more and more to the health care industry to help them cover some of their costs.
• The U.S. is expected to fall to the number two slot in the medical technology industry within ten years. 

Clearly, there’s a great deal of pessimism overall about how the Affordable Care Act of 2010 will be carried out. The bright spot is that, in the midst of the confusion and fear of the unknown, the panelists are still optimistic that the U.S. will eventually be successful in coming up with health care reform that is more effective and quality-driven than other models currently in existence.

Here’s hopin’!