Restrictive

Technology

Innovation

Some medical device manufacturers seek to align with hospitals and design devices that improve clinical results in an economical fashion.

But several medical device manufacturers design and market new technologies specifically with the intent of increasing revenue from hospitals.

Hospital

Device Manufacturer

Demand for electrophysiology procedures is growing explosively. In response, device manufacturers have invested more in technology innovation. New devices are launched at a premium price.

High cost of procedures drives more innovation in technology

Profits and stock value increase

Technology innovation

Cost of Care

Operating margin decreases

Hospital

Device Manufacturer

American healthcare is profitable if you are a device maker; troubled – to say the least – if you are a patient or a hospital administrator

1/3

119%

Drop in average operating income of the 291 largest IDNs since 2014

Increase in stock value of the 5 largest cardiology device manufacturers since 2014

Restrictive

Technology

Innovation

Restrictive technology innovation means designing and launching technologies that represent incremental technical improvements

But increases device costs and reduces physician choice and supply chain autonomy

Restrictive Technology Innovation takes many forms…

Devices are designed to not be reprocessable – either through technology design or through actual “locks”

Software updates that enables the computer to see that a device is reprocessed and stop its functionality.

Cables that connect hand piece and computer system are designed to only work with one type of device. Sales reps install new cables – for free – so hospitals have to use the newest technology.

As an example, Biosense Webster has launched the SoundStar eco to replace 2D ultrasound catheters, specifically ViewFlex from St. Jude and BSW’s own AcuNav

VS

AcuNav

SoundStar eco

Configuration: OPEN

Configuration: INTEGRATED

Economics: REPROCESSABLE

Economics: NON REPROCESSABLE

Technology: MEETS NEEDS

Technology: LITTLE OR NO EVIDENCE OF CLINICAL BENEFITS

There is little evidence that broader technical capabilities have clinical impact in terms of outcome or safety

The upgraded device comes with a new device configuration: It necessitates an integration with the CARTO system, reducing choice for the physician and supply chain autonomy

Many facilities have declined to make the change because SoundStar eco cannot be reprocessed

MATH

THE

A hospital that uses 250 AcuNavs per year and changes to SoundStar eco

$240,000

Lost savings from reprocessing devices - SoundStar eco cannot be reprocessed

Using the SoundStar eco with Biosense Webster’s CARTO system that only allows use of SoundStar eco reduces choice for the physician and supply chain autonomy

Clinical benefits?

THE BLUFF

CALLING

2D mapping meets the ultrasound needs of EP procedures – and the shift in technology is too expensive and limits choice

Roughly 50% of the market has not converted

Unsuccessful in pushing out a legacy device – ViewFlex: More than a third of all EP procedures involving ultrasound do NOT utilize BSW’s system, so SoundStars cannot be used

Unsuccessful in obsoleting their own device (AcuNav) which meets clinical needs

Leading clinicians at top academic centers use ViewFlex or AcuNav exclusively

SoundStar

AcuNav

ViewFlex

Restrictive

Technology

Innovation

Is harmful to hospitals and harmful to healthcare.

However, not all electrophysiology device manufacturers take this approach, and hospitals would benefit from aligning more closely with suppliers who demonstrate a focus on overall hospital value.