Medical Device Downtime – Challenge and Opportunity for Medical Device Manufacturers
Medical devices, whether used at home by patients, or in the hospital, are relied upon to be in operation consistently. The average hospital is operating a “manufacturing facility” that must be in operation 24/7 with big consequences when their machines go down.
When medical devices don’t work – “device downtime” – it is a cost-driver for providers, and a barrier to treatment for patients. However, it also represents an opportunity for medical device manufacturers to differentiate their business, explore new revenue models, and improve marketing efforts, in working to eliminate device downtime.
Hospital departments such as imaging and labs that experience device downtime can create process bottlenecks in a hospital. For example, multiple specialties in a hospital such as neurology, cardiology, ENT and other departments all depend on an MRI machine to varying degrees. If an MRI machine experiences downtime, unless there is another MRI within the hospital or nearby in the hospital network, numerous patient care plans will be delayed.
For medical devices used by patients in their homes, such as respiratory, patient monitoring or renal devices, the same can also be true. Depending on the type of device, patients may opt out of compliance all together rather than deal with a potentially lengthy process of repair or replacement. Patients calling back to their provider about their at-home medical device create additional costs to the provider.
Medical device manufacturers can often spend a great deal of time tracking, addressing, and following up with providers regarding repairs or replacements. Scheduling challenges for repair, or the replacement of a medical device, can create customer relationship challenges with Providers. Reacting too slowly to a Provider’s request for medical device repair can negatively impact a medical device manufacturer’s future buying negotiations with that Provider.
Medical Device downtime causes problems and create costs. Value-based reimbursement trends globally mean that many Life Science and Healthcare entities are sensitive to increased costs.
However, the issue of device downtime can represent an opportunity for forward-thinking medical device manufacturers willing to invest in ioT and scalable platforms to monitor ioT data.
The inclusion of ioT (Internet of Things) sensor technology into medical device represents an investments that allows for remote monitoring of medical devices by the manufacturer. These sensors working inside of in-hospital and at-home devices can provide a medical device manufacturer with real-time diagnostic data to determine when a medical device is (or will be) operating outside of acceptable parameters. The medical device manufacturer can then review the device’s performance remotely, and recommend proactive service or replacement to the provider or the patient BEFORE downtime occurs.
Example: an MRI machine equipped with ioT connectivity, and connected to a service software platform communicates to its manufacturer that it is out of alignment. The manufacturer of the MRI machine’s service platform automatically notifies the Customer Service rep to coordinate scheduling with the Provider, and the appropriate MRI Sales Representative to let them know that their customers’ device is in need of service soon. Repairs are scheduled, and downtime is prevented before it occurs.
When implemented across a statistically relevant number of medical devices, a medical device manufacturer can use statistical modelling to start to predict when a medical device is likely to experience downtime, and proactively schedule repair before problems arise. Machine learning and process automation can help to streamline this process so that staff at the medical device manufacturer and the Provider need only be informed of the need for repair or replacement.
In addition to the ability to differentiate one’s products through proactive service, medical device manufacturers can use these proactive service capabilities to explore new pricing models.
- Medical device manufacturers can start to price against the cost / value of averted downtime, rather than other equivalent devices, as the value equation has now changed.
- Medical device manufacturers can monitor usage and operation remotely through ioT, and therefore can start to explore pricing products and services together on a subscription operating expense basis, rather than traditional capital expenditure models. This is a model that has been implemented in other industries such as aerospace (airplane engines + service = per mile flown billing) as well as business equipment (photocopiers + service = per copy billing).
In addition to product differentiation and pricing innovation, ioT in medical devices can also improve targeted marketing efforts.
For example, if an iOT-connected medical device is showing increased usage at a customer over a sustained period, that customer might be approached by the medical device manufacturer’s salesperson for such opportunities as:
- Are more devices needed to keep up with increased patient demand or number of patients?
- Is a higher level of repair service required by the Provider as a result of changes in usage, and therefore more revenue potential for the medical device manufacturer from recurring service fees?
- Can customers be segmented based on usage, and therefore marketed to differently based on their more specific needs?
- Is there an opportunity to cross-sell other products to that Provider as a result of increased usage, that might help them to operate more efficiently?
Service used to be viewed solely as a cost of doing business.
However, service can represent an opportunity for those medical device manufacturers looking for new ways to differentiate their products, new ways to make money, and new ways to create 1-1 engagement with customers.