May 2009

Technology for lowering costs in medical devices : Milind Purandare, Associate Vice President, Solutions (Product Engineering Services), Patni Computers

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Progress in medical sciences including significant sophisticated diagnostic equipment, tools and medical devices has addled the developed world with rapidly rising healthcare costs.


Consider this – the US currently spends close to 15% of its GDP on healthcare and this figure is expected to rise to 25% over the next 20 years. United Kingdom spends close to 8.3% of its GDP on healthcare and is under considerable pressure to reduce its healthcare costs.

 

This is clearly indicative of the fact that medical costs are soaring while the system reels under the pressure of increasing demand caused by aging baby-boomers and a sedentary lifestyle. The challenge therefore is two-fold; an urgent need to reduce costs while increasing productivity. Hence the focal point for both these challenges are modern day medical devices such as CT, MR Scan machines, implanted pacemakers and ICDs and home dialysis machines  While helping speed up the diagnosis and treatment processes, these devices add to overall healthcare costs.

With a global revenue of $200 billion, the medical device industry is under mounting pressure to curtail these sky rocketing costs while increasing the life expectancy and quality of life.

While on the face of it the situation seems beyond repair, help is coming from unlikely quarters namely, the global outsourcing industry.

Technology enabled healthcare and outsourcing – the antidote  In the light of a growing concern over healthcare spends, medical observers are looking at the potential of technology and innovation to rescue the medical devices budget crisis. To be able to play an effective role in cost reduction, the medical device industry will need to devise new approaches and create devices aimed at driving down the costs of providing care.

Cost reducing innovations are expected to be primarily in the areas of electronic health information capture / storage / access, integration between medical devices and electronic medical records, improved point of care devices with wireless networking, homecare monitoring, therapy devices for proactive diagnosis and remote interventions. With the aid of newer technologies, physicians and other healthcare providers can examine, treat and monitor patients remotely without compromising on standards of care. In addition, applications in areas such as tele-diagnosis, tele-surgery and tele-consultation are expected to reduce costs of patient movement and disease management.

That said, the question that one is faced with at this juncture is who will take the initiative and whose ownership it is to make this cost-effective remote management possible.

While traditional medical device companies are not likely to take this up, they can partner with IT services companies to pioneer low-cost innovations. In the recent past, IT companies have been involved in a multitude of such projects.

Believe it or not

India today has a rapidly growing experience base in developing innovative solutions in healthcare.   This has been largely driven by the engineering services offered to leading global medical device companies making high ended products like diagnostic imaging modalities such as CT scan, MRI and ultrasound machines.  Also serviced are companies making highly critical products such as pacemakers and implanted defibrillators.

Making Outsourcing Work

As is evident, several medical device development processes are outsourced to cost-effective and domain-intensive locations like India. As the healthcare outsourcing model continues to mature, companies are realizing that outsourcing other key areas of product design and development can impart large productivity gains that translate into competitive advantages. Medical device manufacturers are now seeking partners that can provide full service outsourcing, completing all phases of device development, from market research through prototype build and equipment design.

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