What Is Behind Successful Market
Establishment of ICT-based Medical
Self-Care Solutions?
Marcus Carlson & Josefine Nyberg
Lund University, Faculty of Engineering, LTH
Department of Production Management
June 2018
Swedish healthcare is overencumbered. Despite a population growth, the number of hospital beds has decreased by 6,6% between 2010 and 2015. Yet, the cost per patient in somatic care as well as in primary care has risen by 20% during the same time period. Along with an ageing population, leaving the tax system with fewer taxpayers, the healthcare sector is at a critical juncture. Other OECD countries are experiencing similar issues. Self-care solutions are medical devices that can be used by the patient without necessarily receiving direct assistance from a healthcare professional. Self-care solutions based on emerging information and communication technologies (ICT) make it possible for patients to monitor their medical conditions from home.
Monitoring and preventive solutions can shift care from acute treatment, to treatment at a significantly earlier stage of a disease or injury. Thereby time and resources within the healthcare sector are liberated. Other countries are also discovering the economic benefits of self-care solutions and how these free up time for healthcare professionals. But from the perspective of the MedTech companies offering these self-care solutions, what is needed to ensure their product is adopted by the market? The Swedish healthcare sector is a conservative and complex system with several involved parties, including municipalities, regional counties, private operators, physicians & nurses, administrators, insurance companies and of course the patients themselves. Additionally, new medical devices are exposed to regulatory barriers which can impede market launch of said devices. This study, done as a master thesis project at the Faculty of Engineering,
Department of Production Management, has examined ICT-based monitoring and preventive medical self-care solutions (ICTMPMSCS) with the purpose to understand what is needed for market penetration and establishment of these solutions to succeed.
The study found that underlying factors leading to successful market adoptions of ICTMPMSCS varied depending on what phase of a product life-cycle the self-care solution was in. In each phase, the factors could be categorised as either an industry specific & macro-environmental factor, a company internal factor, or a market network factor.
Industry dynamics and macro-environmental factors. These factors are the macro-environmental forces that shape an entire industry. These forces include those that are regulatory, social, technological and political in
nature and affect all companies within the industry.
Internal factors. The internal factors focus on what activities each company has pursued and what decisions it has had to make.
Market network factors. The market network factors present an understanding of the interplay between those stakeholders who have an active commercial interest in the ICTMPMSCS, and how this interplay controls the adoption of the studied self-care solutions. These stakeholders are generally the patients, healthcare professionals and any additional channels who may be involved in the sales of the ICTMPMSCS. Finally, it also explains the interplay between these stakeholders and the company offering the ICTMPMSCS. Market network factors describe how involved stakeholders drive the adoption of the ICTMPMSCS.
12 identified factors
In total, the study singled out 12 factors that impact on the success of the ICTMPMSCS’ market penetration and establishment.
Industry
specific
and
macro-environmental factors
1. The ICTMPMSCS must be able to demonstrate cost savings within the healthcare sector; Because the major
cost savings due to implementation of ICTMPMSCS might not be visible until years after introducing the device, short-term improvements must be shown as well.
2. Patients will drive the adoption of ICTMPMSCS, not the healthcare sector; Indications from the conducted
case studies show that patients can influence the healthcare sector’s adoption of new medical devices.
Internal factors
3. Ability to pursue multiple parallel business models for the same ICTMPMSCS when expanding;
Regardless if the company providing the ICTMPMSCS decides to expand into a new geographical market or further penetrate the existing one, the company needs to be able to manage multiple business models simultaneously.
4. Targeting one customer segment and going through one channel during market entry; If resources are limited,
companies should target physicians as the primary customer segment if the ICTMPMSCS mostly facilitates their work. Patients should be targeted as the primary customer segment if it foremost facilitates their daily life. Further, the company should choose the channel which to the greatest extent will serve the targeted segment.
5. Ability to prepare multiple market approval submissions simultaneously;
If market approval processes are slow, parallel applications can serve as a way to hedge for risk. If one submission is denied or rejected there is still an opportunity to succeed with the other. Additionally, companies should initially choose markets where market approvals are easy to obtain.
6. Insource necessary activities from external parties but integrate key activities gradually as business expands; Until the ICTMPMSCS has
penetrated and established itself in a market, companies do best in insourcing certain activities such as regulatory and sales. This is to avoid the capital risk
from large initial investments in completely new work teams.
7. Bundling may speed up adoption of ICTMPMSCS; The studied cases
suggest adoption of ICTMPMSCS could be sped up by including the product in a bundled offer.
8. Ability to create value from collected data; Although this study only identifies
one case, weak signals from the other cases suggest the data itself holds great value.
9. Development of ICTMPMSCS together with healthcare professionals; Being a MedTech
device, it is reasonable that industry specialists are needed during the development phase of an ICTMPMSCS. In the case of medical care, healthcare professionals can be considered to be specialists.
10. Strong belief in your idea; This study
has found indications that implicates that strong belief in the solution has bigger impact of the product reaching market establishment than financial means.
Market network factors
11. Physicians have an important role in the adoption of ICTMPMSCS and bring legitimacy to the device; Patients
as well as others in the market network, such as municipalities and regional counties place a high trust in physicians.
12. Design ICTMPMSCS for primary user, but keep secondary user satisfied; In order for the ICTMPMSCS
to be fully adopted throughout the market it needs to serve the need of physicians, administrators and patients. The ICTMPMSCS should however be designed with the primary user in mind, but secondary users also need to be kept content.
