The healthcare industry is changing to achieve stronger operational efficiencies and better patient outcomes, and many MedTech companies are an active part of this transformation. Does your legal team have what it takes to help lead your company through change?
Cecilia Bonefeld-Dahl, Director General of DIGITALEUROPE, recently stated: “Public health expenses represent about 8.4 percent of the EU GDP. Not only can digitalization bring down operational costs, but these funds could be spent on preventive and predictive care solutions based on AI and other technologies. Digital solutions can reduce the administrative burdens [and] remove waste in public spending.”
Industrialized nations know they need to aggressively manage healthcare costs that will otherwise continue to rise alarmingly with the aging of populations. In parallel, healthcare providers recognize the need to go beyond traditional paradigms and to move toward models that allow for high-efficiency logistics, outcomes-based solutions, patient centricity, and, ultimately, a focus on overall health and well-being rather than the treatment of acute symptoms alone. To achieve the efficiencies and outcomes that such paradigm shifts promise, healthcare suppliers need to rethink their value-add in a personalized, data-driven and ultimately disease prevention healthcare models.
Traditional MedTech players will be challenged in their ways, and new entrants from other industries are ready to disrupt this broadened “health” market with a wealth of data, consumer knowledge, and expertise in lean processes and user interfacing. Some MedTech players will take too long to identify, understand and adapt to these new conditions, just as some long-forgotten companies did when Airbnb disrupted the hotel industry, and Uber redefined the taxi industry. Make no mistake: Apple’s FDA-approved watch series 4 with electrocardiogram function means much more to the healthcare industry than one might think at first glance!
Others will see the opportunities that disruption generates and will be part of the transformation. Those intending on thriving are already connecting their products to the internet of things and developing new data-driven technologies, products, and services that help improve patient and operational outcomes, much like Stryker with its robot-arm assisted technology and its healthcare transformation products.
In-house Legal teams will need to transform and adapt, too. First, they need to reinforce their knowledge base to start understanding and integrating the legal ramifications of the changes referred to above. Legal teams will also need to strengthen their knowledge of new technologies, their ability to identify new risks, and their creativity in developing new solutions for their companies. The ability to work across hitherto separate areas of law will become paramount: outcomes-based deals require legal mastery across basic contract law, software licensing, data protection and processing, but also cyber security, procurement, and health economics.
MedTech companies should also get their lawyers and regulatory experts involved in establishing and influencing the many rules and standards remaining to be defined in these new spaces. In-house lawyers will need agility and curiosity, diversity of thought, and the ability to continuously self-educate in a world of fast change and disruption.
"Industrialized nations know they need to aggressively manage healthcare costs that will otherwise continue to rise alarmingly with the aging of populations"
Legal teams will need to attract new talents from pools outside MedTech and continuously push their lawyers to expand their knowledge and harness their ability to work collaboratively to address these challenges. Finally, they will need pioneers ready to foray in green field areas such as the ethics of artificial intelligence.
Howard Yu is spot on in his “Guide to Harnessing Knowledge for Competitive Advantage”: “In order to maintain a competitive advantage, shift your company’s focus on the demands of your constituents and the future of your industry.”