Understanding “Data as the Product” for device companies

Ortho friends, let’s time travel to 2025-2030.

I would like to share with you a glimpse into “Data as the Product”.

Forget about the hardware.
The future is providing value to your customers with data.

Previously, I have written about the coming software trend in orthopedics. You may have read…

How software is taking over orthopedics
Why the future of orthopedics is predictive
6 reasons why orthopedic software products will prevail

… but let’s go a bit deeper now, a bit more granulated.

My eyes have truly been opened up after interviewing Bill Hunter, CEO of Canary Medical, on the podcast. I have a more heightened understanding of where we are going this decade. Bill’s unique background in cardiology and his work at Canary predicts where orthopedics is going. BTW, Canary Medical is real. Canary just received FDA clearance , has partnered with Zimmer Biomet and will begin gathering real-time data with the Persona IQ knee in 2022.

8 eye openers after talking with Bill.

1) The device will become a commodity and the data will become the value add product for the healthcare system and patient. Healthcare systems will pay the device company directly for the data. Think SaaS. This new SaaS business model will challenge the “device centric” mindset of orthopedic device companies.

2) The goal of Orthopedics is pain free motion. Key word – motion. AI/ML algorithms are uniquely suited to analyze motion data.

3) AI/ML can analyze both macro-motion (eg: steps) and micro-motion (eg: tiny 3D movement). Any wearable can count steps, no big deal. The real value is in the micro-motion data.

4) AI/ML can predict problems without directly measuring root symptoms. For instance, AI/ML can figure out early patient infection, or motion of the implant or pH changes, by measuring real-time micro-motion data.

5) Al/ML is a win-win for healthcare and patients. AI/ML can use motion data to predict problems before anyone knows about the problem, enable treatment of the patient proactively and lower the cost of care.

6) The algorithms get better with more volume of data, so they become more valuable after 10, then 100, then 1,000, then 10,000 patient experiences. AI/ML is all about pattern recognition. The more data the smarter, exponentially.

7) Data is agnostic with respect to hardware. The algorithms don’t care what device or treatment that a patient has received. Therefore, an algorithm can measure outcomes across different devices, different hospital systems, different surgeons, etc. This will challenge the “device centric” mindset of orthopedic device companies.

8) For the future of device companies, the algorithms are the secret sauce not the measuring devices. The strong patents and the robust regulatory filings will be based on the algorithms, not the hardware. The algorithms are the value add that will demand a premium price from the customer. The algorithms are also the moat that keeps the competition away.