Medtronic CEO Omar Ishrak is out to remake the world’s healthcare system.
“It always bothers me that there are so many millions of people in the world who still don’t have access to something that was invented in the 1950s by our company,” Ishrak stated in 2015. At the time, he was talking about one of the world’s oldest examples of biotechnology: the cardiac pacemaker.
The former head of GE Healthcare’s Systems, a $12 billion enterprise, Ishrak joined Medtronic in 2011. Since that time, he has overseen the world’s largest merger in medical tech, retooled Medtronic’s revenue stream to encompass an increasingly global vision of healthcare services and treatment, and helped to transform our concept of what medical device technology can actually do to extend and preserve life.
Medtronic’s accomplishments during his tenure are impressive. Micra, the world’s smallest lead free pacemaker is a tiny self-contained cardiac device that can be implanted directly into the right ventricle chamber of the heart to treat heart rhythm disorders. Their latest diabetes system, 670g, mimics some of the functions of a healthy pancreas by providing automated insulin delivery. A new aortic valve replacement therapy is small enough to fit between your fingers and doesn’t require open-heart surgery. A recent acquisition includes technology aimed at reducing infection rates from heart implant devices by wrapping them in a dissolvable antibacterial sleeve.
Those technological advances have helped to give root to a changing attitude about the sustainability of the healthcare market with today’s population growth. “If you are in healthcare, you are, by definition, in a growth industry,” said Ishrak.
[Clinical] value has to be tied to economic value, otherwise people will not be able to afford the care we provide.
But Ishrak may be best known for his role in incentivizing discussion around the realities of the healthcare industry’s future: specifically, how leaders can align value and price in an industry that is expected to exceed $500 billion in sales by 2021. He’s also passionate about keeping costs manageable for patients.
“[Clinical] value has to be tied to economic value, otherwise people will not be able to afford the care we provide,” Ishrak explained.
He was speaking at the third CECP CEO Investor Forum last February at the Time Warner Center in New York.
Unfortunately, said Ishrak, “We live in a world where we get paid for our technology with a promise to improve outcomes, not a guarantee, a promise.”
While it’s a “promise” that is based on believable outcomes, clinical trials and earlier results, Ishrak points out, there’s no guarantee within today’s healthcare system that the health of a patient will be improved by a given treatment. Improved health requires a whole new structure of support. It’s a fee-for-service structure that doesn’t support either healthcare objectives or economic sustainability, said Ishrak.
The answer, Ishrak proposes, is designing a system of value-based healthcare where companies get paid for the outcome, not the device, diagnostic process or the treatment method and in which the benchmark of efficacy meets that expectation.
And just as importantly, it’s a system that can balance the disparities of different healthcare systems and economic limitations. Value-based healthcare, for example, can more adequately address the needs of underserved communities.
Many emerging markets lack not only the funds to pay for top-of-the-line medical devices, but more importantly they lack physicians who are trained to recognize the symptoms, implant the therapies and follow up on the patients’ care. The whole ecosystem needs to improve.
You can only create business models like this if you can define outcomes.” Just as in any other business arena, it takes planning and consensus. It takes supply chains that can meet the same value-based outcomes.
Today, Medtronic’s global revenue is valued at more than $29 billion, and staffs more than 135 offices and labs around the globe. Its mission of “contributing to human welfare by the application of biomedical engineering to alleviate pain, restore health and extend life” is just as much a part of the 69-year-old company’s vision today as it was when that mission was inscribed in 1960.
It’s an understanding that has no doubt benefited from Ishrak’s own global experience. A native of Bangladesh, he came to the position as CEO with a well-schooled understanding of both the economic and political challenges that accompany this competitive market, and the human toll that comes from an inadequate healthcare systems that can’t afford to access cutting-edge technology and infrastructure.
Ishrak’s global vision can also be seen in his role outside Medtronic, where he serves on a variety of boards and expert panels around the world. His appointments include co-chair of the World Economic Forum Health and Healthcare Community, and he serves as a board member of the Intel Company. He is also on the Board of Trustees for the Asia Society and for Minnesota Public Radio, in the state in which Medtronicwas founded and where its operational headquarters remains today.
Disrupting any industry, especially one poised for growth, is no small feat. Ishrak’s passion for values-based healthcare is a model for any sustainably-minded CEO.Originally published in CR Magazine - Summer 2018.
Jan Lee is a former news editor and award-winning editorial writer whose non-fiction and fiction have been published in the U.S., Canada, Mexico, the U.K. and Australia. Her articles and posts can be found on TriplePundit, JustMeans, and her blog, The Multicultural Jew, as well as other publications. She currently splits her residence between the city of Vancouver, British Columbia and the rural farmlands of Idaho.