Medtech Strategies for Value-Based Growth under Trump

After the great recession of 2007, it wasn’t until 2013 that the U.S. medical device business showed improving revenue trends. The momentum created by Obamacare (20 million more patients, yes!) drove growth in hospital admissions and other systems of healthcare utilization that didn’t exist before 2010. (Who would think to go to the pharmacy to get a flu shot?). Employment rates continue to increase and with it employer-sponsored insurance, private insurance that covers greater than 50% of the under-65 U.S. population—a robust 150 million US residents in total.   According to EvaluateMedtech, the worldwide market for medical devices will grow to $530 billion in revenues by 2022,  at a 5% CAGR between 2015 and 2022.

Medtech’s improving revenue trends have increased the confidence of medical device leadership in future growth and medtech strategy. This is part of the strategic engine that drives  M&A, to create new market share growth and core competencies.

The good news? Value-based care is here to stay. In the findings from a survey by Lazard Global Healthcare with 200 C-suite executives from three sister industries; pharmaceuticals/biotech; medtech/diagnostics and healthcare services, 47% of the C-suite indicated that the value-based products and programs that have been disrupting our industry will continue over the next ten years.

This is great news because we have all been concerned about how value-based care will change with the Trump administration. Even if the number of insured Americans decreases (which will  negatively impact the medtech industry), healthcare executives believe value-based care will continue to transform the healthcare industry over the next decade.

Stay with the  program! Price pressure is one of the top strategic challenges facing the medical device industry. Meeting this strategic challenge mandates innovation, through new disruptive medtech innovations in or new business models. Our hospital customers (still mostly physicians, hospital administrators and the C-Suite) are continuously assessing our products to improve clinical outcomes and sustain their  financial health. In all medical specialties, explore product design and pricing strategies to address these unmet medtech needs.

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