Challenges and Solutions for the Private Healthcare Industry

1. Challenges and Solutionsfor the Private Healthcare Industry Medical Devices Industry Mark Brand TheBHFSouthern African Conference22-25 July’07 Sun City

2. Strategic Challenges • Marketing technological innovations • New product introduction – timing – urgency. • Competitive edge from being first to market. • Expenses accrue to the market leaders. • Relatively short business and product lifecycles. • Strength of clinical acceptance (evidence; endorsements etc). • Priorities within the product portfolio – risk assessment. TheBHFSouthern African Conference22-25 July’07 Sun City

3. Squaring the Circle • HTA’s – a cost driver?? • Highly fragmented – never achieve consistent outcomes • Inappropriate EBM strategies – inconsistent criteria • Economic evaluations (cost effectiveness) and limits • The notion that this information is intellectual property. • Understanding the market – a thumb suck?? • Access to epidemiology data. • Tells us about the opportunity. • Is there a “sustainable” market. • Useful for an informed pricing strategy. • Funding – too complex to contemplate?? • Alternative reimbursement models • Lack of timely mechanism for introduction • Risk sharing, motivations and pre-authorisations • Cost shifting, rather than reduction • Disincentives for adopting new technologies • Disruptive innovations – not in my back yard?? • Viewed as potential threat • Impact traditional cash (holy) cows • Low prices (higher profits) prevail. Challenges The BHF Southern African Conference 22-25 July’07 Sun City TheBHFSouthern African Conference22-25 July’07 Sun City

4. Solutions…..? Best practice Standard of care Increase knowledge Share data Manage patients at medical condition level? Demographics (aging population) Information (educated consumer) Innovation (technology) Standard of Living (quality of life expectations) Clear consistent expectations Limited diffusion (COE’s) Observational studies Local HTA’s Beware low cost incentive POSITIVE SUM VALUE COSTS OUTCOMES Relative price effects (skill intensive) Lifestyle (abuse) Skills development Supplier activity Guidelines Pay for performance Reward specialisation for economies of scale Promote best SOC Manage “BTE’s” In/out of network referral Structure (incentives) Dreaded Disease (HIV/AIDS) TheBHFSouthern African Conference22-25 July’07 Sun City

5. Start now……….! Thank you! Mark Brand TheBHFSouthern African Conference22-25 July’07 Sun City