Medtronic Highlights Physicians as Key Drivers of Value-Based Healthcare in New Filing

Value-Based Healthcare: Achieving Maximum Medical Value at Minimum Cost, Referred to by Health Economists as "Healthcare with the Highest Cost-Effectiveness."

Value-based healthcare advocates that hospitals, while treating diseases and saving lives, should take into full account patients’ medical costs, treatment outcomes, and needs, thereby delivering high-value services to patients and contributing to the control of healthcare expenditures.

“What has New Value Healthcare done in the past, what is it doing now, and what can it do in the future? If certain initiatives have not yet been implemented, how can existing products serve as innovative references for clinicians? How can we incorporate more content aligned with the concept of New Value Healthcare?” Recently,Zhang Junqi, Senior Product Manager, APV Aortic Market, MedtronicPosed the question during the presentation titled “Technological Innovation and Physician Needs in the Post-New Value Healthcare Era” at the 2019 Inaugural China Cardiac Surgery Frontier Technology Forum.

In light of his insightful presentation, this article has been compiled and edited. The following is an abridged transcript of the speech:

New Value Healthcare actually has two key words: one is value, and the other is new.Behind the new era of value-based healthcare, who drives the evolution of value—technological innovation or physicians’ needs? What exactly is the logical relationship between them?

From a product manager’s perspective, I believe there are two key considerations: 1. Minimize costs; 2. Maximize value.

(Figure caption: Zhang Junqi, Senior Product Manager for the APV Aortic Market at Medtronic)

The cost burden on patients encompasses not only the total direct medical expenses but also significant other costs. Although often overlooked, these represent real value-based costs, including indirect expenses such as time, psychological distress, transportation, and caregiving.

What Does New Value Healthcare Encompass? I believe it includes not only hospitals and hospital leaders, but also clinicians, innovations in health insurance, innovations by government officials representing health insurance agencies, companies, and more.

Medtronic is currently the largest medical company globally. We are committed to delivering value and providing cutting-edge innovations, earning recognition from physicians worldwide.

Because our products have saved more patients and restored their health, they are used by more hospitals, ultimately making us the world’s largest medical device company.

Let us first examine value creation in hospitals. In September this year, Director Sun Lizhong published an article titled “Current Status and Existing Problems in the Diagnosis and Treatment of Aortic Diseases in China.” As we can see, within cardiac surgery and major vascular procedures, 90% of patients received treatment using the Sun’s procedure.

It is precisely due to this surgical innovation that the mortality rate has been significantly reduced, with an intervention rate as low as 2%. This means patients do not need to spend additional money on managing complications, and the vast majority of them do not need to return to the hospital for further treatment or surgery.

This represents the full spectrum of value-based care that all clinicians, exemplified by Director Sun Lizhong, can deliver to patients.

Reviewing the past 20 years of China's healthcare insurance, based on the data already released, it can be observed thatThe Dividends Brought by Health Insurance to Everyone.

Twenty years ago, 4.02 million patients in China had health insurance coverage; two decades later, 1.3 billion people are covered by health insurance.

For example, when my son first started kindergarten, he was already covered by medical insurance, allowing him to enjoy benefits with only a minimal out-of-pocket payment. As for my parents, one is covered by the Rural Cooperative Medical Scheme, while the other has comprehensive medical insurance coverage.

It is not difficult to see that over the past 20 years, the state and relevant officials behind the medical insurance system have made tremendous contributions to each and every one of us.

Turning to revenue and expenditure, over the past two decades, health insurance coverage and income have increased 1,000-fold, a growth rate far exceeding that of GDP. The evolution of health insurance reflects the continuous changes in our lives and underscores the sustained contributions made by our country to the healthcare system, which are evident to all.

There are also invisible changes. Previously, prescriptions had to be obtained at hospitals; now, they can be filled directly at pharmacies. In Shanghai, pharmacies accepting medical insurance are ubiquitous.

Both the “visible” and “invisible” aspects of medical insurance contribute, in their own ways, to value-based healthcare and the emerging paradigm of new value-based healthcare.

For companies involved in medical insurance, the most significant crisis they face is price reduction. From a corporate perspective, we have embraced this crisis, which also contains opportunities. If all markets evolve into a single platform, we believe that Medtronic, with its extensive portfolio of high-quality products, will undoubtedly capture greater market share.

From the company's perspective, what has Medtronic done in value-based healthcare?

Medtronic inventedThe First Battery-Powered Cardiac Pacemaker, eliminating the need for patients to remain bedridden or for family members to provide companionship. By reducing patient costs and minimizing the need for family caregiving, this invention exemplifies the principles of value-based healthcare.

Of course, Medtronic has now grown into the world's largest medical device company, with $30 billion in revenue last year. More than one-third of this income comes from its cardiac surgery and vascular business.

Over the past year, nearly 75 million patients received Medtronic therapies.From a corporate perspective, innovating and exploring the infinite possibilities of medical technology is essentially making continuous contributions to value-based healthcare and new value-based healthcare.

With so many doctors worldwide, why do they choose Medtronic products? I believe it comes down to peace of mind.

In this Medtronic market research, I came across a very interesting question. Among cardiac surgeons specializing in aortic procedures, half perform endovascular interventions while the other half do not. The first question asked physicians: “If you perform endovascular interventions, which company’s products do you consider the best?” The majority responded that Medtronic’s products were the best. The second question was: “What makes Medtronic superior?” Most experts attributed this advantage to Medtronic’s service.

Unexpected, yet inevitable.

As previously mentioned, value-based healthcare should encompass hospital specialists, cover all departments reimbursed by medical insurance, and include product innovations from every company. Among these three elements, who drives the evolution of value-based healthcare? Where exactly does the driving force for new value lie? Is it medical insurance or the companies?

In my view, all three are driving value-based healthcare. Physicians consider Medtronic’s stents to be superior, which includes the associated additional costs. I would sayWe provide not only stents, but also highly professional services, which is Medtronic’s core value.

During my market expansion efforts, I observed that over the past few years, major vascular surgeries in cardiac surgery have been growing at a rapid annual rate of 20%. While this may not seem particularly striking to some, the fact is that among all cardiac surgical procedures, which overall see only a 5% growth rate, major vascular surgery exhibits the fastest growth.

In Dr. Sun Lizhong’s publication, two points are particularly emphasized: first, in current clinical practice, beyond the classic Sun’s procedure, there is a growing population of elderly cardiac surgery patients who cannot tolerate the operation; second, for those unable to undergo cardiopulmonary bypass, what alternative options are available?

In fact,Our experts, while ensuring strong medical value, continue to explore ways to reduce complications and lower intervention rates in the future.This is the creation of medical value that has been consistently discussed.

Under the new value-based healthcare model, Medtronic, from a corporate perspective, notes that its fourth-generation stent product, Valiant Captivia, is currently one of the most widely used products in clinical practice. In response to observations and specific needs identified by clinicians, the product has been upgraded to Valiant Navion. Compared with Valiant Captivia, Valiant Navion incorporates further improvements and may be the most perfect stent available on the market.

All advancements in stent technology are driven by clinical experts’ pursuit of clinical excellence. By identifying their unmet needs, we find the impetus to innovate and improve stent design—this is the enduring force behind the creation of new value in medical devices and the continuous progress of healthcare.

From the company's perspective, we are constantly updating our products, thereby creating value-based healthcare.But who drives us to improve our products? I believe it is every clinician here.

Physicians’ pursuit of more perfect and superior patient care has driven us to improve and iterate our products, and to explore the future prospects of value-based healthcare.

On the path of pursuing medical excellence, we have a long and arduous journey ahead. As a product manager and a dedicated member of the Medtronic team, I sincerely hope to listen to every cardiac surgeon’s needs for future therapies in the days to come. This will drive us to refine our therapeutic solutions and optimize our engagement strategies to better support you in saving lives.