The Cain Brothers — a healthcare-focused investment bank in New York City — recently released a six-page newsletter about trends in medical technology, authored by the company's managing director Rafe Hanahan and David W. Johnson, CEO of the consulting firm 4sight Health.
Here's what you need to know:
1. Mr. Hanahan and Mr. Johnson say three major goals for medtech companies are to reduce cost, improve performance and enhance communication between providers and patients.
2. Today, receiving FDA approval takes less time and cost than in previous years; however, it is increasingly difficult to receive CMS payment codes. This shift has encouraged medtech companies to focus more on consumer qualities, like price and patient experience.
3. Through seeking public funding, startup companies have been able to sidestep traditional distribution channels. "Venture-backed startups have more freedom to explore innovative, even disruptive approaches to the design, development and marketing of medtech products and services," according to Mr. Hanahan and Mr. Johnson.
4. Although some companies are hesitant to invest in the current market, private funding still plays an important role in medical technology development. Some healthcare systems, like Oakland, Calif.-based Kaiser Permanente and Seattle-based Providence Health & Services, are investing in technology that would support their service needs.
5. The writers conclude that medtech companies need to constantly reposition themselves in the market. Even well-established companies need to adapt to changing market dynamics, whether through finding new consumers, collaborating with new partners or pursuing other expansions.
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