Probing health policies’ impact on the medical technology industry
by R. T. (Terry) Hisey
Vice Chairman and U.S. Life Sciences Leader, Deloitte LLP
Recently, I had the opportunity to host a workshop with some of Deloitte’s health plan and provider folks, meeting with the CEO and the head of Marketing & Sales for one of our clients. The discussion became spirited when we asked the client to tell us what their value proposition was: “How do you approach the market? How do you sell?” After we heard the answer, we replied, “That probably used to work for you, but your customer no longer buys that way.”
That discussion reinforced an opinion I have held for quite a while: The next version of health reform is going to accelerate the transformation of U.S. and global health care from a volume- to value-based marketplace. And that means our clients in medical technology (as well as in pharma and biotech) will be having different conversations with different people than they traditionally have.
Going forward it is no longer a physician-preference world; patient advocacy groups, hospital administrators, and other stakeholders will play a key role in product selection and purchase. Companies should be responsive to how the market wants to buy rather than fixating on how the company wants to sell.
Real-world evidence and an ability to articulate their value proposition by addressing a product’s clinical, safety, and economic impact can likely become determining factors in a company’s future competitive position. Organizations that only have price as their strategic lever may be at a disadvantage.
The current Administration’s health policies are playing a key role in transforming the marketplace and shaping the life sciences industry’s short- and long-term planning. Elected for four more years, the Administration has an opportunity to accelerate the implementation of key reform elements through the actions of HHS, and to drive funding appropriations through Congress. Heading into 2014, we’ll see a fair number of initiatives, like health insurance exchanges, beginning to go from proposed to enacted to implemented. Competing visions will be the watchwords as different stakeholder groups ask the questions, “What will be the priorities?” “What will be the impact?” and “What will be the marketplace and industry reactions?”
Deloitte recognizes the impact that health policies have on the overall transformation of health care in the U.S. and globally – as well as the impact they have on our clients. That’s why we are pleased to serve as Exclusive Sponsor for the Key Health Policies Track at AdvaMed 2013: The MedTech Conference, September 23-25 in Washington DC. I will have the privilege of moderating one of the track’s three panels, “Get Ready! Competing Visions for the Next Round of Health Reform,” as well as introducing the other two: “And You Thought the Device Tax Was a Big Deal: What’s at Stake for Medical Technology in Comprehensive Tax Reform,” and “Price Transparency: The Next Big Thing in Healthcare?”
Sponsoring the Key Health Policies Track is appealing to us for two reasons: We believe that it is an important conversation to have with our clients and the industry at large; and we believe that Deloitte can bring an ecosystem view of the world to that conversation, drawing on our practices in life sciences, health plans, and health care providers.
AdvaMed draws its attendees from the c-suites of medical technology companies around the country; they are interested in how potential marketplace events will affect their companies and the future of the industry. Who better to have these conversations with than the leaders of these engines of innovation?
We expect that the discussions at AdvaMed will be a jumping off point for more conversations to come, since medical technology companies need to be prepared for imminent health policies that will be driving the industry forward.
Terry Hisey is the vice chairman and U.S. Life Sciences leader for Deloitte LLP. Terry leads efforts for the Life Sciences sector in the fields of tax, audit, consulting, and financial advisory services to assist clients in achieving sustainable competitive advantage through strategic change.