Is Cloud the tomorrow of Medical Devices Industry?
We are living in a chaotic transition period to a new era of business, where, extensive change is visible influenced by factors like globalization, faster flow of data through new information and communication technologies and increasing business complexity in face of pervasive global competition. This new environment is characterized by a consumer who has adjusted to this quicker pace and whose preferences decide the marketplace.
A different set of organizations can be dominant in this environment, which can adapt and use the “change” to carve out a niche at the market place to their advantage. This rings true in the words of Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
A live example of adaptability and turnaround is Apple Inc. The story is nothing less than spectacular. The journey started with the launch of iPod and still continues with iPad, taking Apple’s market cap standing at a whopping US$ 300 Billion. So what is it that Apple did different from its earlier avatar? What do you think is the key to other success stories, likes of Google and Facebook?
My answer would be simple; these companies have created a marketplace around the end consumer. They introduced a platform to bring in multi-services for the consumers, the end- users.
Let’s focus on a slightly different industry which traditionally has been one of the best performing segments – Medical Devices, a global US$ 250 billion industry (2009) with 7-8 % 1 predicted growth rate. The use of technology in medical practice did not start until the 19th century. From Hutchinson’s device for measuring the vital capacity of the lungs and Herisson’s sphygmomanometer for blood pressure measurement, the industry has come a long way.
However, today the top medical device companies are under tremendous pressure to reduce costs and increase profitability. Making the best medical device alone is no longer the priority but giving the best outcome to the user. Some of the teething issues faced by the industry are strict regulations, inventory control, device recall, rising cost of device service and support and IP related issues. An additional duty of 2.7% on every medical device sold & over all cost reduction of medical care as proposed by US healthcare reform bill; an aging population of the country demanding more attention and special care, flood of Device Recalls – these are adding to the woes of Med Device OEMs
In light of the above, is there someone contemplating a turnaround based on cues taken from the likes of Apple and Google of the world? Can we replicate their success story to for this industry?
Introduce a device and create a market place around it to guarantee a sustainable business model. Some one may say that it already exists. The Xs and Ys of the Medical Device industry have blood glucose meters where the main source of revenue is through selling strips for measurement and not the meters itself. I agree, however this could be only the tip of the iceberg. Something very big may be lurking around the corner, waiting to be tapped.
The Solution for tomorrow could be the same X organization introducing a Service Delivery Platform which talks to the device and resides in a Public or Private Cloud.
Remember the teething issues, I listed above. There could be specialized applications which are designed to take care of some of these issues. More so, there could be other customized services given to end consumers using the same service platform.
Predictive Health monitoring is a new area getting popular where devices like life recorders are used for medical purposes.
Having painted the scenario and the use cases, let’s go one step further in understanding the technology realms involved in translating this at work. We have the devices connected through some communication protocols to a thin client. The client scans the device for data related to device parameters as well as patient data. The data is passed through some secured server to a cloud based service platform. The application now synthesizes the data and makes it available to consumer on his/her handheld device or PC securely over internet as various services.
Cloud is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources. The biggest advantage is easy Scalability to meet the demand of growing business.
However, the challenge is meeting the rigorous security and data protection demands of the healthcare industry. Data transfer between a local client and a remote server is not secure, although development work using SSL/TLS encoding could solve that problem. Another approach is encryption and decryption of transferred data, but there has to be a guarantee that performance won’t suffer.
Data privacy is a big challenge, particularly in relation to Government regulation such as the Health Insurance Portability and Accountability Act (HIPAA). A lot of countries have compliance policies regarding record-keeping, including the physical location of medical data.
Medical Imaging is one sector which has seen some adoption of Cloud Computing. Also, few start ups have introduced their solutions in personal healthcare space with cloud as backbone.
Google and Microsoft has noted the potential of healthcare industry and has introduced their products.
The success of the vision of Smart Connected Health Grid is dependent on wide scale adoption of cloud computing in all areas of healthcare.
There would be pros and cons associated with every new adoptions. We need to carefully weigh the options and make our progress.
I would leave you with this thought and wait for your comments on your views; do they resonate with mine, cloud computing as the future in Medical Devices Industry?
1: Booz and co: Medical Device Industry report
I was thinking in the same angle a few months ago…. In my case, it was surgical devices…but then, Cloud cannot play a role here because the Surgeon cannot “pause” an operation because internet or network is down…oops….. Makes no sense.
Real-time critical devices are still needed and cannot be offloaded to cloud. May be other non-rt devices can benefit from cloud.
@Sarnath
Hi Sarnath,
Interesting perspective. If you are talking about remote surgery, there had been documented instances of such occurence in history.
In 2001, Prof. Marescaux, while in New York, used the “Zeus” robot to remotely perform gall bladder surgery on a patient who was in Strasbourg, France
Also, check for the daVinci Surgical platform.
While Cloud computing is picking pace in many different industry verticals, it hasn’t yet become mainstream; and not in the Medical Devices space either, if I’m right. So, the need to migrate to cloud is not immediate in this industry segment. However, I do understand that it will open up new opportunities to earn more money, going by the examples you’ve highlighted.
This change will be welcomed by some, while many others would be interested in knowing about the Cost-Benefit trade-off. Seeing things optimistically, it’s a win-win. But with so much uncertainty all around, that may not be the likely environment. How can one tackle this issue by considering a moderate situation? Are there any specific cases that can be talked about where the Cost-Benefit trade-off can be seen clearly?
@Sooraj
let me answer this in a different way.
there are two parts to this change. one is the business model – the way to reach out to one’s business consumers and revenue flow and the second one is cloud – to support the IT infrastructure environment.
there are product companies in Medical Devcies Industry with successful business model on ths lines. Medical Imaging is one section where the adoption rate is significant.
the significant questions to answer for a product company would be thru its vision in terms of business growth plan .The level of scalability which can be achieved on a cloud is unparallel when compared to investment required.