Two years hystrix medical: change in the making
When we started exactly two years ago with the vision to build the hub for healthcare market information and as a first step into this direction launched the first digital marketplace for medical consumer goods, implants and related services, we were met with both, skepticism and admiration.
Not admiration for the great idea, but rather the courage to fundamentally redesign the interface between procurement and distribution in a market with very traditional, historically grown and rather conservative business practices.
Two years later, things look a little different. Many hospitals have recognized that they’re well advised to suggest the use of digital distribution channels for products that require little or no explanation to their suppliers. They’ve also been under pressure themselves to explore alternatives for efficiency gains from both a pricing and labor perspective.
This pressure has been felt most acutely by suppliers more recently with the announced partnership between Hirslanden and the German buying group, Sana. Without drastic industry-wide changes in procurement processes, domestic MedTech players have recognized that their role will substantially change in the more transparent world whether they like it or not.
For the more astute suppliers, the realization has occurred that digital distribution will allow them to completely redesign their distribution cost structures. They will be able to invest where effective value creation as well as differentiation from competitors can be achieved: namely in support and consulting services. Thus, acting alongside healthcare providers in the best interest of the patient.
Suppliers will also be able to more effectively compete with the inevitable offshore supply pressures by putting a price on their service, consultation, training and implementation. They will sell those “products” separately such that hospitals are required to make a choice between the offshore acquisition of the standalone innovation alongside the onshore purchase of the associated services, or an all-inclusive-and fairly-priced onshore product purchase.
In an environment of increasing price pressure, optimized distribution cost structures also allow suppliers to operate sustainable profitability management, while continuing to invest in product innovation, which in turn serves the innovation power of the market and ultimately again the patient.
Of course, there are still critical voices, but admiration is now coming from several corners, including organisations like the European Commission and the Swiss MedTech industry body, quite simply because most market participants have recognized that digitization is not the driver but the enabler of new, efficient procurement and distribution models.
Let’s continue to connect the dots and design more efficient procurement and distribution processes in the medtech market – together!