Key Challenges Facing the MedTech Executives in 2021
The COVID-19 pandemic crisis has placed unprecedented challenges and economic strain on the health-care industry. Health systems have provided substantial resources to all manner of COVID-19 response efforts as the infection spreads, and the number of positive cases increases: and unfortunately the rate of positive COVID cases will not decrease anytime soon.
Subsequently, the medical devices industry has suffered under strain to meet the operational challenges for their goods and services from the front-line health-care teams. And when shortages of supplies occur, the requirement, and expectation, is that medical device manufacturers must increase capacity quickly and seamlessly. What health-care workers and their management fail to realize is the time required to expand and build this new capacity in conjunction with government regulation and a global supply chain hampered by lockdown policies.
The unparalleled demand COVID-19 has placed on the need for personal protective equipment (PPE), ventilators, diagnostic tests, and other critical medical supplies has positioned the MedTech industry right in front, and center stage. MedTech leaders are not only analyzing and devising plans to swiftly increase their manufacturing capacity and capabilities, they are searching outside their normal business boundaries to further supplement capacity to meet the needs and requirements. This involves outlining and engaging in partnerships with companies outside of the sector and reviewing the possibilities of open-source equipment design and deployment.
Interestingly, the MedTech industry has been affected by the reduced demand for a portion of their goods and services associated with elective procedures and surgeries. As decreed by government, these types of procedures have been temporarily postponed and canceled so that medical facilities can focus their resources on treating COVID-19 patients. A challenge MedTech leaders will face when the recovery begins will be the resurgent demand for elective procedures, therefore placing strain on their business models and supply chains.
According to a McKinsey report, high demand has impacted MedTech companies in stages:
- Existing inventory can often meet the increased rise in demand. When stock shortages eventually occur, manufacturers and distributors can prioritize the remaining stock under ‘protective allocation’ while production can catch up with demand.
- Increase manufacturing production rapidly. Existing or risky supply chain bottlenecks will need to be identified and addressed to cope with increased production.
- Supply chain challenges can worsen due to lockdowns, temporary plant closures, and travel and trade restrictions. These challenges can widen to items indirectly associated with the products experiencing the initial surge of demand.
As health care organizations respond to the COVID-19 crisis, MedTech leaders have been faced with significant challenges: successfully planning for their organization’s future while ensuring financial sustainability. The pandemic’s economic impact has driven MedTech’s to alter their planning style – scenario planning for multiple unknown eventualities.
When the pandemic eventually abates, what are the key considerations for MedTech leaders on how to successfully navigate post COVID-19 business world? It has been estimated that complete financial recovery for the MedTech industry could take anywhere from six months to two years. Rethinking industry norms will need to be considered when operating successfully in a post COVID-19 busines world.
Virtual Care: The value of virtual care and virtual work has been successfully demonstrated during the pandemic. Prior to the pandemic, virtual health technologies showed great promise but with minimal adoption due to the disruption to implement and deploy, along with the massive financial investment required. MedTech leaders will need to prioritize virtual health technologies as either a supplement or a transition to their core business offerings.
Focus on the Consumer: MedTech leaders have identified consumer trust and safety concerns as a top priority, and the need to provide new communication channels to reach their consumers effectively and efficiently.
Digitization Technology: MedTech leaders will need to allocate capital spending on digital technology such as Cloud infrastructure, robotic process automation (RPA), and artificial intelligence (AI). In order to assist with virtual care, the adoption of these technologies is crucial to deliver that care and consumer focus.
Agile decision-making: Rapid and agile (not to mention courageous) decision-making across the whole organization is required to provide timely and accurate business responses to any crisis. Historically, decision making has been slow within the health care industry – primarily due to conservative management and the organization size and structure. Frontline responses to COVID-19 cannot entertain any delay in decision-making, so the creation of executive command centers with the necessary structure, attendance, and decision-making powers is required. As a result, organizations have the ability to take quick actions on the organization’s finance, technology, operations, and human capital.
Resilient Leadership: In the midst of financial uncertainty and unprecedented challenges, the leadership of MedTech’s has been scrutinized and commented upon like never before. Resilient leadership is the new norm, and this can be seen in the following manner:
- Lessons Learned: MedTech leaders need to review their initial responses and planning to the crisis and be deft when assessing their business continuity initiatives along with any pitfalls that have been encountered along the COVID-19 response journey. Share these lessons learned and (now) best practices so overall business improvements can be made moving forth.
- Thrive during change: MedTech leaders will need to embrace the challenges and learn to thrive with change. Prioritizing and re-prioritizing will be required when dealing with unexpected changes coping with a pandemic – both for short-term and long-term strategies.
Supply chain: Mitigating the supply shortfall resulting from future COVID-19 infection waves is crucial to aid frontline health-care workers fighting the pandemic. There will need to be a balance between resource availability, the rapid acquisition of raw supplies, and the manufacturing of these materials to provide timely goods and services. Establishing a vigorous and robust supply chain will be critical for both PPE and other standard health-care supplies.
The COVID-19 pandemic has inflicted a substantial crisis in the health care industry. As a result, MedTech leaders will be required to adapt to the necessary changes to meet these challenges quickly. Yes, it has been an overwhelming humanitarian crisis, yet it presents an opportunity to transform healthcare and healthcare delivery. In time the COVID-19 case volumes will subside. Therefore, the MedTech operations will stabilize: the industry will be challenged to deeply rethink their business and operating models to adapt to future healthcare needs.
Understanding and addressing the vulnerabilities that have emerged in the MedTech supply chain is essential as the COVID-19 pandemic continues. While an uncertain future awaits for MedTech companies, it makes more than sound business sense to understand, embrace, and adopt these vulnerabilities to strengthen their supply chain. The supply chain inefficiencies that have been exposed today will only be stronger tomorrow, providing that the harsh lessons learned are heeded and adopted.
There is considerable more work to do and achieve so we can all defeat the virus, and there is no one company or organization that can deliver all the goods, products, and supplies needed to resolve this global pandemic. Only by being unified can we defeat the virus, with intelligent and focused strategies for healthcare production, resource allocation and deployment.