The medical technology industry is undergoing major transformation: once centered on hardware-based category leadership, the sector is evolving toward a focus on digital products.
Reflecting this shift, artificial intelligence (AI) in healthcare market is expected to expand at a CAGR of over 30% through 2030.
Drivers of change
There are three main drivers of this change: margin pressures, competition, and changing patient demands.
The challenge of meeting shareholder expectations amid stagnant or declining profit margins is driving the need for innovation. While the industry has seen impressive advances in hardware, the potential of software, particularly AI algorithms, remains untapped. With average software profit margins exceeding 60%, the move to digital solutions offers unprecedented profit potential.
Meanwhile, competition in the medical technology sector is intensifying. HealthXL’s 2022 study found that tech giants such as Alphabet, Microsoft, Amazon and Apple are investing heavily. Amazon’s acquisition of One Medical for $3.9 billion last year was emblematic of this trend, signaling a further commitment to patient-centric healthcare that integrates in-person and virtual care to meet growing patient demand.
Comprehensive patient support through data and digital technology
Evolving from simply offering the best equipment to improving the experience for both patients and doctors requires integrated solutions that go beyond hardware alone and address their needs holistically. For example, the virtual assistant Eric, a joint pilot project between Gemelli Hospital and Olympus, supports patients before and after their colonoscopy.
For Mike Ryan, global head of digital engineering for Olympus’ digital health business, hardware connectivity is key.
“Unlike the siloed solutions often found in the world of medtech hardware, connectivity and flexibility are paramount in the digital space. Strong connectivity through well-defined APIs and first-class software development kits is necessary to leverage modern technologies such as AI,” Ryan said.
Connected digital solutions streamline clinical staff routines, freeing up time for improving patient care, and provide real-time assistance to clinicians, such as Olympus’ Endoeye-3D, which provides automated polyp detection and navigation support during laparoscopic procedures.
Smart data usage has the potential to revolutionize entire healthcare systems, for example by identifying patients at high risk for colon cancer and prioritizing them for endoscopy. Combined with efficient scheduling, resources can be optimally allocated to those who need it most.
The future: Rapid innovation
Improving health service delivery requires rapid development, deployment and integration cycles.
Benjamin Wilhelm, global head of partnerships at Olympus Digital Health, sees an opportunity to accelerate digital health adoption.
“Companies from different industries are coming together to connect the dots across the entire continuum of care. Partnerships between medical technology companies and digital disruptors will be the speedboat to define the next competitive frontier and bring digital solutions to patients,” Wilhelm commented.
Connecting with users and healthcare organizations throughout the development process is key to meeting their rapidly changing needs.
Jacob Gareau, global product head for Olympus Digital Health, emphasized the importance of connecting with customers.
“Successfully developing digital solutions requires rapid iteration by outcome-focused teams and maintaining regular contact with customers to receive and implement feedback,” Garrow explains.