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The role of industry in innovation for health processes by Alejandra Guillen _ MEDTRONIC

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Presentación de Alejandra Guillén, directora de innovación de Medtronic sobre el rol de la industria en la innovación de los procesos sanitarios. Esta charla fue impartida durante el acto de …

Presentación de Alejandra Guillén, directora de innovación de Medtronic sobre el rol de la industria en la innovación de los procesos sanitarios. Esta charla fue impartida durante el acto de presentacion del MCI Healthy Living el pasado 29 de septiembre en la FUndacion Bancaja en vaValencia

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  • 1. The role of the Industry in inHealthcare InnovationFrom Features to SolutionsAlejandra Guillén Innovating for life.Solutions for Integrated Care ManagerMedtronic Ibérica
  • 2. Innovating for life.The SpanishEnvironment
  • 3. Spanish Health-Care Environment Innovating for life. Spanish Healthcare System A decentralized National Health System The Spanish Healthcare system is 80% public Spanish private market is very small National Health Authorities: Health Ministry Competencies in Spanish Health Inspection Policy, Price Regulation, Foreign affairs Policy. ‘Coordination’ role in areas such as Education and Health (inspection, Minimum catalogue of Health Services in all Spain NHS) Hospitals Regions: Regional Health Authorities Hospital Management Private mostly composed of Hospitals HTAs: regionals 17 regions with high autonomy, clinicians, sensible to & National specific legislations, 4 officialtechnology and services, Patient Advocacy Non clinical & clinical languages, free autonomy in the Groups not just prices Scientific Societies regulation of taxes and financing Private Insurances extra services and management autonomy
  • 4. P D G % 0 2 4 6 8 10 12 14 France 8.7 2.5 11.2 Switzerland 6.3 4.3 10.6 Austria 8.1 2.4 10.5 Germany 8.1 2.5 10.5 Belgium 7.4 2.8 10.2 Portugal 7.1 2.8 9.9 Denmark 8.2 1.5 9.7 Greece 5.8 3.8 9.7 Sweden 7.7 1.7 9.4 Iceland 7.6 1.5 9.1 Italy 7.0 2.1 9.1 Netherlands1 7.4 1.6 9.1 Spain 6.5 2.5 9.0 Ireland 6.7 2.0 8.7 United 7.2 1.5 8.7 Private Norway 7.2 1.3 8.5 Finland 6.2 2.2 8.4 TotalSource: OECD Health Data 2010; Eurostat Statistics Database; WHO National Health Accounts. EU 6.2 2.1 8.3 Healthcare Expenditure - Spain Slovenia 6.0 2.3 8.3 Slovak 5.4 2.4 7.8 Hungary 5.2 2.1 7.3 Bulgaria 4.2 3.0 7.3 Luxembourg 6.5 0.7 7.2 Czech 5.9 1.2 7.1 Poland 5.1 1.9 7.0 Latvia (2007) 4.2 2.7 7.0 Lithuania 4.8 1.8 6.6 Total health expenditure as a share of GDP, 2008 Estonia 4.8 1.3 6.1 Turkey 4.1 1.9 6.0 Cyprus 2.4 3.2 5.7 Romania 4.5 1.0 5.5 Innovating for life.
  • 5. Economic environment Spain Innovating for life.Unemployment Rate (%) Unemployment Rate 19.8 19.1 18.0 17.4 11.3 9.2 8.5 8.3 2005 2006 2007 2008 2009 2010 est. 2011 est. 2012 est.Source: OECD Expansión, Nov. 19, 2010 Déficit (% of GDP) Deficit 2.0 1.9 1.0 2005 2006 2007 2008 2009 2010 est. 2011 est. 2012 est. M -4.2 -4.4 -6.3 Source: OECD Expansión, Nov. 19, 2010 -9.2 -11.1 • Construction Sector crush • Issues on Financial System (Cajas) • National and Regional deficit • Unemployment
  • 6. Spanish National Health System Debt with Suppliers Innovating for life. Spanish National Health System Debt with Suppliers Payment delay per region Payment Delay (days)Spanish National Health System Debt with Suppliers 700 611 648 636 600 524 473 Payment Delay Debt Total 500 464 (days) (%) (million €) 400 291 300 241 217Andalucía 464 24.53% 846.285 200 145 174 163 191 206Aragón 217 2.93% 101.085 100 96 61 86 67Asturias 241 2.10% 72.450 0 Andalucía Aragón Asturias Baleares Canarias Cantabria C.La Mancha C. y León Cataluña Extremadura Galicia La Rioja Madrid Murcia Navarra P. Vasco C. Valenciana Ceuta Y MelillaBaleares 611 3.54% 122.130Canarias 145 2.29% 79.005Cantabria 648 2.82% 97.290 Spanish National Health System Debt with SuppliersC.La Mancha 291 4.56% 157.320 Payment delay versus debt %C. y León 524 11.36% 398.820 700 30.00%Cataluña 174 4.89% 168.705 600 25.00%Extremadura 163 1.60% 55.200 500 20.00% Payment Delay 400Galicia 96 2.18% 75.210 15.00% (days) 300La Rioja 191 0.45% 15.525 10.00% Debt (%) 200Madrid 206 10.64% 367.080 5.00% 100Murcia 636 7.68% 264.960 0 0.00%Navarra 61 0.35% 12.075 Andalucía Aragón Asturias Baleares Canarias Cantabria C.La Mancha C. y León Cataluña Extremadura Galicia La Rioja Madrid Murcia Navarra P. Vasco C. Valenciana Ceuta Y MelillaP. Vasco 86 1.62% 55.890C. Valenciana 473 16.40% 565.800Ceuta Y Melilla 67 0.07% 2.415 Spanish National Health System Debt with Suppliers Debt (%) versus Budget Reduction (%) Total debt 3,457.245 25.00% -14.00%Data as of 30 Sept. 2010 -12.00% 20.00%Source: Farmaindustria & Fenin -10.00% -8.00% 15.00% Debt -6.00% (%) -4.00% 10.00% % budget -2.00% reduction 5.00% 0.00% 2.00% 0.00% 4.00% Andalucía Aragón Asturias Baleares Canarias Cantabria C.La Mancha C. y León Cataluña Extremadura Galicia La Rioja Madrid Murcia Navarra P. Vasco C. Valenciana Ceuta Y Melilla
  • 7. Where is the money being spent today? Innovating for life. (%, 2008) • Spending on medical devices accounts for less than 5% of total Device 5% 4% 4% 3% 3% 3% 3% 2% 2% 2% spending as healthcare spending in all the a % of total countries analyzed – Decreases in procurement100 Med. devices prices for medical devices Pharmaceuticals will have only a limited impact on overall HC 80 expenditures • Operational expenses comprise a much higher proportion of 60 overall costs, reaching over ~80% of total spending. Operating and – A rel. small change in Op. 40 other costs costs will have a major impact on total HC spending 20 Medical devices represent a small 0 portion of overall spend and offer limited potential cost savings Source: Espicom; WHO; World Bank, LEK analysis
  • 8. Spanish Health-Care EnvironmentChallenges Innovating for life. FY10-FY12: Challengeable Scenario due to the economical situation, a threat to the stability of the Health Budgets and an impact to the Health Care System  Financial crisis with reduction in Health expenditure.  Increase pressure in activity reduction and price fall.  Barriers for adopting innovative Health-Care Technologies.  The NHS has to adapt itself to lack of resources: Focus on gaining efficiency on clinical processes.  Physicians more involved in financial decisions.
  • 9. Challenges of the HCT industry in Spain Innovating for life.  Overcome economical and financial issues • Resolve the healthcare debt problem • Work in a finance model that avoids debt generation  Improve Productivity in the Spanish NHS  Need to drive innovation in Spain • Only 1.26% of the 26,600 patents registered in 2009 in the Spanish Patent Office were Spanish (Germany has 60,2%). USA has 32 of 46 HCT industries with sales over 1 billion dollars. • Promote stakeholder collaboration and develop a frame favorable to multinational companies investment  Drive a rapid incorporation of high added value technologies • Revise and improve innovation adoption process: Need forSource: efficiency and value evaluation (HTA)
  • 10. Innovating for life.Innovation Concepts
  • 11. What is Innovation? Innovating for life. Innovation is a Value Creation Novelty Solutions to Unmet User Business Processes Experience Models Clinical Needs12 | Medtronic Confidential
  • 12. What is Innovation? Innovating for life. Innovation is a Value Creation Novelty For the past three decades the medtech industry has focused its efforts in providing new clinically beneficial products adopted by the healthcare system. Still, health care has been quite slow to innovate in core processes, business models and customer experience13 | Medtronic Confidential
  • 13. Why is innovation necessary? Innovating for life. Innovation in a moment of Environmental Challenges 1 New Socio-Economic Circumstances – Aging populations and rise in chronic disease – Budget Deficits – Shortage of HC workers – Patient demand driven by increased knowledge and less healthy lifestyles – Legacy priorities and financing structures unsuited to today’s requirements14 | Medtronic Confidential
  • 14. Why is innovation necessary? Innovating for life. Innovation in a moment of Environmental Challenges Information Imaging and 2 Technology Navigation Systems Technological Convergence – Meeting unmet medical needs. – Orient innovation towards cost-reducing or affordable technologies. – Facilitate equity in access to care for patients – Personalization of treatments and medicine Device Technology Biologics15 | Medtronic Confidential
  • 15. Why is innovation necessary? Innovating for life. Innovation in a moment of Environmental Challenges • From Features to Solutions • From Silos to Systems • From Volume to ValueThe International Market pursues innovative solutions that can support an increase ofefficiency and sustainability of the Healthcare Systems16 | Medtronic Confidential
  • 16. Why is innovation necessary? Innovating for life. How much Value does Innovation Bring?? MRI scan safe pacemaker Remote Patient Monitoring GE’s Vscan® iPhone Mobile Health Technologies Solutions to User Business Unmet Clinical Experience ModelsProcesses Needs 17 | Medtronic ConfidentialChristopher WasdenPwC, Medical Technology Innovation Scorecard
  • 17. Innovating for life.Innovation and Healthcare
  • 18. European Initiatives to promote the Innovationin Medical Technologies Innovating for life. ● Seventh Framework Program for R&D&IEU: “Green Book” ● Framework program for Innovation and Radical changes to promote growth Competitiveness and employment through R&D&i. ● European Institute for Innovation and Technology Two focus: ● Health, Environment ● Non Technological innovation (design and a Quality of Life commercialization) ● Stimulate Public Purchasing of Innovative ● Renewable energies Technology (commitment with R&D&i) Along all the “Innovation Chain” from Basic Research to commercialization of innovative products and servicesFRANCE: French National Alliance for Life Sciences and Health (Aviesan) groups together the main stakeholders of life and health sciences in FranceSPAIN: Alianza para la Investigación en Salud (Ministerio de Ciencia e Innovación) Plataforma Española de Innovación en Tecnología Sanitaria
  • 19. Innovation Performance Innovating for life.Spain• Moderate innovator• Innovation performance and rate of improvement below the EU27 average.• Relative strengths, compared to the country’s average performance, are in Finance and support and Economic effects.• Relative weaknesses are in Firm investments and Linkages & entrepreneurship.• Over the past 5 years, Finance and support and Firm investments have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in Private credit (12.2%) and Non-R&D innovation expenditures (13.4%).• Performance in Human resources, Linkages & entrepreneurship and Innovators worsened, due to a decrease in S&E and SSH doctorate graduates (-3.2%) and the Firm renewal rate (-5.9%).Source: European Innovation Scoreboard (EIS) 2009. PRO INNO Europe@ European Union 2010
  • 20. The Innovation Chain Innovating for life. Innovation Chain. Spain business market ideas financing entrepreneur model adoptionEnabling ... Good R&D groups Business Angels Creativity Public Programs Good professionals Easy entrance R&D in Hospitals Easy initial adoptiion Risk Funds Innovation culture Pilot CulturePreventing ... Difficult growth Lack of cohesion Cultural change Rigid Organization University away from Lack of Continuity Bureaucrcy Lack of process re- Difficult gral adoption Industry Enterprise Financing Education Sys engineering Focus on basic
  • 21. For a Sustainable Healthcare Innovating for life. The situation of Healthcare Systems in the actual economical situation is critical. As in any other sector in society, TECHNOLOGICAL INNOVATION is the only possible means for a quality improved Health care, accessible for everyone and economically sustainable.
  • 22. The impact of Innovation onHealth-Care cost Innovating for life. Innovation accounts for a large part of medical care costs and expenditure over time (e.g. increased number of services, costly products and procedures...) Cost-decreasing innovations leading to higher costs in the aggregate (e.g. increasing indications, treatment expansion, life extended effect) The system needs to learn how to handle innovation. Innovation can be a determinant in the rise of Health- Care costs…. But.... Innovation is a key factor for productivity improvement Source: Eucomed Pammoli et al.’s report
  • 23. The importance of Innovation in theHealth Care Sector Innovating for life. Innovation is a key factor for productivity improvement  For the Health Service, technological innovation can facilitate the accessibility, quality and efficiency of healthcare, contributing to the improvement of the population health. (Social value)  For the Hospital, technological innovation can allow a more efficient use of the financial and human resources and a better management of the demand pressure. (Welfare value)  For the country, these innovations can contribute to generate industrial tissue and improve productivity and competitiveness. (Economical value)
  • 24. Innovating for life. Is Spain a difficult market for introducing Innovation on HC Technologies… ? No… but… • Low barriers for initial introduction • Difficulties for getting funding attention to innovation • Lack of complementary resources• Great difficulties to adapt the previous processes of care• In general the ratios of use of innovation are below the European average
  • 25. Innovating for life.InnovationWho, How?
  • 26. Where is the money being spent today? Innovating for life. The key for achieving meaningful innovation is in the collaboration of these stakeholders Las tensiones dentro del sistema sanitario hacen de éste un momento clave para revisar los procesos y mejorar la eficiencia del sistema y las organizaciones sanitarias. Nunca el interés de los distintos stakeholders estuvo tan alineado. La clave está en CONOCER el problema para poder trabajar juntos en una solución satisfactoria.
  • 27. Opportunities Innovating for life. Bottom UP  Deep knowledge of the problem and the reality (processes) Top Down  Deep implication of the decision makers (business models) Global vision & Engagement of all parts  Organizations30 | Medtronic Confidential
  • 28. Opportunities Innovating for life. Planes estratégicos Redefinición de procesos Revisión de las organizaciones ¿se pueden hacer las cosas de otra manera con la misma estructura? Identificación de servicios y herramientas31 | Medtronic Confidential
  • 29. Two dimensions Innovating for life. Time & Convergence Tools Needs eHealth Business Models mHealth EHR Process Efficiency Conceptual Practical Personal H. System Chronic diseases Personal H. Record Sustainability32 | Medtronic Confidential EHR Quality of Care
  • 30. Conclusions:The importance of Innovation in the Health Care Sector Innovating for life. Shared Interest Shared Risks 33 | Medtronic Confidential
  • 31. The role of the Industry in inHealthcare InnovationFrom Features to Solutions Thanks for your attention!!! alejandra.guillen@medtronic.comAlejandra Guillén Innovating for life.Solutions for Integrated Care ManagerMedtronic Ibérica