GTM strategies and new business models are putting a spotlight on Medtech
Is Medtech having a moment?
Health technology is having a moment right now with everyone playing all angles of the field. So it's no wonder that when describing the services or product of a health technology company, you'll need to understand where the company fits in the ecosystem. Is it digital health or medtech? And what is the difference between the two?
Unfortunately there has been a lot conflation of what makes up digital health vs medtech that many folks, even those building these companies, are confused by. We're not here to debate the terms. We even applaud breakdowns provided by other experts on differences between medtech, digital health and health technology.
For us, we break down digital health and medtech by primary end purchaser. If a consumer can buy it "over the counter" themselves, without provider intervention, then it's digital health. If the solution, even if used by consumers, is marketed to purchase by providers, health systems, pharma or manufacturers (ie. not consumers) than it's medtech. Now yes there'll be overlap but this designation keeps it simple enough to define where companies sit on the spectrum.
What we are here to point out between building a digital health vs medtech company, is how it affects regulatory and go-to-market strategies. While most digital health companies focus on DTC channels or aspire to employer/payor plan partnerships, medtech companies must take a different approach.
To begin with, regulatory scrutiny has increased in 2023 with the rise of AI and machine learning applications making regulatory approval (rightfully) harder to obtain. Building for medtech will require substantial planning and long-term investment in data privacy and clinical validation early on for these companies.
And, instead of focusing on incrementally improving product improvements to retain customers, Medtech companies must invest in product-enabled services that address workflow pain points that will improve value, outcomes and trust. This will help attract and retain loyalty from providers and patients alike.
Finally, experimenting on business models will be key for competition. MedTech as a Service (MTaaS) is a subscription-based model that allows companies to bundle services like capital equipment, maintenance, clinical/operational services, training/education programs, and more into a sales model that improves efficiency and passes on cost savings to patients.
While medtech's largest incumbents like Abbott, GE Healthcare or Siemens Healthineers already have large market shares, new entrants who are able to master these regulatory and GTM hurdles can shift the market in their favor.