Rich Denness, North Highland

Turning Internal Challenges into Customer Opportunities

By Rich Denness
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Rich Denness, North Highland

Throughout 2018, device and diagnostic manufacturers have opportunities to address challenging market trends and turn internal change into ways of increasing business and goodwill from providers who purchase their technology.

A recent survey of healthcare leaders reveals that cybersecurity and compliance remain top concerns, but many leaders see transformation and adaptability to changing customer needs as keys to competitiveness.1 Healthcare and life sciences industry leaders say they are excited and energized about 2018, yet they admit that growth is slowing. What is driving this tepid growth outlook for 2018? Many in healthcare feel it is because they are obliged to focus their energy and resources on fundamentals such as cybersecurity, quality control, compliance, and legal/regulatory pressures—at the expense of innovation and expansion.

Managing operational and external challenges such as data vulnerabilities, reimbursement and uncertain government regulation are well-known strategic concerns for medical device manufacturers. We believe, though, that there are ways to turn these issues into opportunities for transformation and adaptation. Below are strategies device manufacturers can employ today to help deliver added value to customers and partners, enhance brand reputation and accentuate sales opportunities to grow market share, while addressing internal change.

Be A Cybersecurity Steward Across Your Entire Value Chain

We now have access to more information, content and statistics than ever before. Clinical trials around the world log information on how new devices perform during patient interaction. Internet-connected devices such as fitness trackers, continuous glucose monitors and orthopedic brace sensors measure personal data, much of it protected under HIPAA, and upload that information to apps and the cloud. The opportunities for data breaches and leaks of valuable IP or confidential patient information are numerous.

Cybersecurity stewardship starts with decisive action on three fundamental priorities:

  • Ensuring your security protocols are understood, implemented and adhered to by partners and customers engaged in clinical trials.
  • Sharing best practices among key stakeholders involved in the technology and commercialization lifecycle—trial activities, surgeon training, product marketing and beyond.
  • Finding and acting on opportunities to share cybersecurity responsibilities with partners in an organic way.

R&D, manufacturing processes and data can be infiltrated through software, hardware and network connections. If your device connects directly to the internet or sends and receives information from other devices such as smartphones, it is important to understand where breaches can occur. Security concerns over connected health devices have serious ramifications. For example, in August 2017, the FDA recalled almost half-a-million pacemakers over fear of security vulnerabilities and outdated firmware, leading to disruption for Abbott.2

Armed with this knowledge, your internal operations should implement strong security protocols, update firmware on schedule and ensure that employees understand how to properly protect sensitive information. It’s equally important to share these practices with your customers and partners, and to engage in ongoing reviews of the security measures they employ in using your products to keep them aligned with required protocols.

Being a cybersecurity steward presents opportunities for device makers to be champions of healthcare evolution and cybersecurity that benefit themselves, providers and patients. It also makes your technology more valuable to the customer and helps safeguard against recalls and negative press that may result from security concerns over connected health devices. As we forge ahead into an “Internet of Everything” world, device and diagnostic manufacturers that work with customers and consult them on how to keep hardware, software and data secure will add a new value line on procurement checklists.

Help Customers Receive All Allowable Payment for Your Products

As we continue to move from volume-based care to value-based care models, device and diagnostic manufacturers are smart to keep a close eye on how changes will impact hospital procurement and payment processes. As a manufacturer, demonstrating understanding of adjustments to the ways providers get paid, and providing guidance to customers on how to code and bill underneath policy adjustments—especially as bundled pricing models create a more constricted reimbursement environment—creates greater collaborative relationships with providers and serves to accentuate your collective desire to provide enhanced access to effective medical device therapy.

Another way to add value is to help your customers get up to speed on new MACRA language and government funded value-based billing, in addition to assessing whether they are accurately billing for all allowable procedural charges.

In addition to the larger strategies outlined above, the following are a few ways device and diagnostic manufacturers can work to solve immediate and urgent customer problems:

  • With roughly 6 million medical devices from 6,500 manufacturers on the market and a chronically high number of recalls (more than 3,000 recalls in 2016), hospitals face extreme challenges in tracking their medical devices. As a manufacturer, you can help make things easier for your customers by adding tracking markers to products. Leveraging new inventory tracking technology as part of your manufacturing and sales processes is minimally disruptive, and beyond customer benefits, it may help you avoid additional regulatory hurdles.
  • Providers waste approximately $5 billion each year in expired, lost or uncaptured medical charges—this hurts the bottom line. Taking a focused role in helping hospitals maximize reimbursements and inventory ROI within emerging value-based models positions you as a good partner who can help right size order amounts and delivery schedules.
  • Medical devices are also being hit with the “comparative effectiveness bug.” You should ensure that device performance data supports both improved outcomes and cost justification.

Transformation and Adaptability Take Many Forms

When I speak with device and diagnostic manufacturers, I always ask this core question: What’s your plan for transformation, and what will it take to bring those adaptations to life? You will have to change one way or another and address shifts surrounding technology, product, people and process. Transformations may include new product launches, product removal from the market, relocation, reorganization and other fundamental and strategic tactical changes. These shifts, while challenging, should be seen as opportunities to better serve customers and find ways for all stakeholders to adapt together.


  1. Denness, R., & Schultz, N. (2017, December 15). North Highland Beacon 2018: Healthcare and Life Sciences. In North Highland. Retrieved from
  2. Shah, S. (2017, August 31). FDA recalls close to half-a-million pacemakers over hacking fears. In Engadget. Retrieved from

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Rich Denness, North Highland

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