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Medtronic Keen on Value-Based PPPs

US-based biomedical technology company Medtronic, which manufactures cardiac stents and pacemakers, is keen to forge value-based public-private partnerships (PPPs) with government and healthcare stakeholders to improve patient outcomes. Complimenting the government’s ambitious scheme Ayushman Bharat, Omar Ishrak, the India-born chairman and CEO of the nearly USD 30-billion company, tells TOI in an exclusive interview that Medtronic has taken a long-term view of India, but can absorb only some (pricing) pressures. Excerpts:

How have you seen the healthcare landscape changing in India over your last few visits

People are improving models of healthcare around the world. I think India is in the very early stage of this journey, but at least it has started. With the launch of the Indian government’s initiative, the first few steps have been taken. It’s now about the vision, about providing healthcare and then building a system, over time. I met with some of the government officials, and was struck by a number of things — the structure, thinking about the infrastructure, private & public infrastructure, and the payment mechanism. The methodology for payment at this point is very crude, but it’s a start.

What kind of partnerships/models came up for discussions with government and private hospitals here

We will work with the government to understand and create better outcomes that are meaningful to patients, based on which we will figure out how to create a fair payment methodology. We have business models where technology and outcomes are directly related. We work with data and evidence, and will structure a methodology where better outcomes are realized, and there is improved financial benefit. It’s one of the things that we can work on here — either with private hospitals and go directly to the patients, and certainly systematically with the government.

There could be a system where public infrastructure is operated with private partners, or a mix between a collection of private partners, and we could be one, a provider could be the other, and a government body that runs the infrastructure could be another, in a payment mechanism. An example of something we will introduce next year in India, that has been the most successful of our value-based model, is called TYRX — an anti-bacterial sleeve, which is an implantable cardiac product. This is a business model where we have scaled. In UP, there is some thought about picking up specific cardiology procedures and building a model that has to be linked with the government base scheme.

How has Medtronic fared after the price caps imposed by the government on cardiac stents

First, that didn’t help us, but also its relatively arbitrary and not sustainable. We are trying to manage through it. But if it’s a forcing function for a country to develop a true value-based model, then we will do it — that price is worth paying. We don’t know the exact numbers (market shares) but we are still here. But we have made some changes in the way we stack our products. There are certain segments where we are unable to sell because there the product choices are made based on innovation and quality of outcome — we have the product of choice, but in certain segments where only the price becomes the issue, we walked away. Investment has to have a return at some time.

What has been the company’s growth in India

It’s reasonable, and double-digit now, but should be more. Our cardiology franchise is still the largest right now, while minimally-invasive therapies group is growing well. The business is very small, especially compared to the population. I think it’s not even 1 percent of the global turnover of the company.

What is the role of robotics and AI in healthcare

We recently acquired Mazor Robotics, and feel robotics will play an important role in surgery. I think specifically in spinal surgery, for which the robot is dedicated for, it’s going to improve the procedure, lower the cost and improve consistency of the outcome. We are already doing robotic spinal surgeries, and are working on one for general surgery. At present, these surgeries are only 3 percent, but are expected to be over 50 percent in a decade. – TOI

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