Lessons learned from two real world examples of new medical device introduction

Shortly after the launch Johnson & Johnson’s JLabs at the MaRS Discovery District in Toronto, Sarah Fisher, Director of External Innovations at J&J, who is responsible for investing in early stage startups and doing acquisitions on behalf of J&J, gave a talk to share her lessons learned through her 14 years of experience taking various medical technology innovations to market.

“The number one mistake in new technology introductions is a lack of understanding of the job that stakeholders are trying to solve.”

Who are the stakeholders in healthcare? According to Sarah, there are five major types: Adversaries, payors, recipients, and secondary users (e.g. technicians, nurses). It doesn’t matter if you have a breakthrough technology. If you don’t address the needs of each individual stakeholder, your technology won’t be adopted.

Case study 1: Pillcam

Imagine your future self telling your grandchildren about healthcare in 2016:

“When doctors think people might have stomach problems or something in their digestive tract and the doctor wants to take a closer look, they used to feed this long tube down their throat to get a good look at what’s going on down there. Thank God we now have Pillcam — a disposable camera the size of a pill that you can swallow and takes photos of your insides so the doctor would never have to force anything bigger than that — not to mention a tube the size of an endoscope — into your body. What would we do without Pillcam?”

You probably won’t have this conversation in the future because Pillcam as you know it won’t exist — at least not in the way it was intended to be used.

The reality is that healthcare practitioners are compensated according to the complexity of the procedure (This is however changing under Obamacare — albeit slowly — as healthcare is forced to shift to an outcome-based model) The less complex you render treatment procedures, the less doctors can justify getting paid the same amount. Doctors can sometimes be your adversaries when introducing a new technology to market.

The other group of stakeholders that didn’t respond well to the technology was the Payors. They are the health insurance companies in the U.S. and the Ministry of Health in Canada. Why? If the doctor performs endoscopy in the first place, then you’d get diagnosed and if they discover something, an intervention can be done in the same visit. If you’re given the Pillcam to swallow on your first visit and the diagnosis shows that you’d require an intervention, you’d have to go in for an additional visit, which increases costs for payors.

Pillcam’s initial challenges were the result of not doing sufficient research with stakeholders. So what happened when the company went to doctors’ offices and asked “what would you possibly use this for?” The doctors pointed them in a new direction:

When people end up in the emergency room in the middle of the night, sometimes after a night of heavy drinking, nobody but the doctor is qualified to give a reliable diagnosis. The unlucky doctor on call that night would then have to wake up in the middle of the night and make their way to the hospital, sometimes just to find that the patient is fine and no intervention would be required.

Doctors hate this.

With the pillcam, the staff can administer one and have the doctor see the images on their home computer to decide if it warrants coming into the office.

Even if an innovation sounds amazing for the patient and save money for the system, it’s extremely important to understand the payors’ and the doctors’ needs and how they might conflict with the technology you are trying to introduce.

Case study 2: Anesthetics machine

Once upon a time (I can’t recall the details) a veteran anesthetist developed a machine that automates much of the anesthetist’s job at a fraction of the cost. It would’ve been a great plan — sell this machine to hospitals and build the rest of her career around selling this machine. You can imagine where this was going…

The average anesthetist today makes $1,500 for a 20 minutes colonoscopy procedure. When anesthetists spend half of their career just to become an anesthetist, you can trust that they will put up a fight against anything that threatens to take away their chance at recuperating their investment. As you predicted, the initial introduction were met with resistance. How can someone’s job stifle progress for humanity? Lobbying.

What the company decided to do instead was to provide anesthetists with opportunities to monitor four machines at a time. People aren’t stupid — anesthetists know that machines will eventually replace them. So if you give them a reasonable offer to get out of a losing battle — through making money for every procedure until they retire — chances are they will. Introduce the technology over multiple stages so that existing doctors can work the rest of their careers uninterrupted while allowing the next generations of doctors to make career adjustments early on.

Today, many of us think disruption is sexy and think that the only way forward is to disrupt. But people simply don’t like to be disrupted. So rather than shoving your technology into the hospital with the aim to “disrupt the industry,” help your customers satisfy their human needs so they can help you move towards your goal more quickly.