Business Model Innovation Hub

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New biz model for medical devices

As a partner in a VC firm in Cleveland, given the rich medical/healthcare industry here (e.g., Cleveland Clinic), we see a ton of medical device companies asking for funding and the thing that really bothers me is that the model is the razor/razor-blade model - make a device that requires disposable components so the customer re-orders again and again. The reason for the disposables is the fear of infection and the cost and time to sanitize tiny tubing etc. It's just easier to throw away on many levels. So, since I'm part of funding these guys, I think we need to redo the biz model for medical devices...and see this recent article in the New York Times: http://nyti.ms/dmHLgT

any ideas? to help? I'm also going to put this on twitter - thanks!

Tags: Devices, Disposables, Innovation, Medical

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Permalink Reply by Martin Fanghanel on July 13, 2010 at 2:57am

Deborah, reading the NYT article opened my eyes. This will be a fantastic challenge for you.

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Permalink Reply by Deborah Mills-Scofield on July 13, 2010 at 3:13am

Any ideas? You are in Bolivia, correct? Well, you supply the lithium for the batteries for many of these devices! (although Afghanistan now has some great reserves too). Any ideas are welcome because the only biz model we see is the disposable one and it's just not viable going forward...

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Permalink Reply by Michael van der Steen on August 17, 2010 at 10:54am

Deborah,

Looking ath NYT article and assuming the problem is that disposables are thrown away, any new business model should focus on changing behavior. Just a thougth on this: mabey you could consider the Multi-Sided platform where hospitals will receive a fee when they return empty batteries. In the Netherlands, where I live, when you buy a bottle of coca cola you additionaly pay an extra 50 cents which you receive back when you dispose of the empty bottle at the supermarket. This is done by getting a 50 cents discount on your groceries x the amoutn of bottles you returned.

Thanks

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Permalink Reply by Deborah Mills-Scofield on August 17, 2010 at 4:02pm

Not a bad idea! I like it - need to think if that could work for the used parts as well - the issue there is making the cost of sterilization reasonable enough to be more advantageous (cost, price, fear, behavior!) than throwing it away...thank you for the suggestion!