Medtronic’s telehealth strategy begins to emerge (UK & US)

Hot on the heels of our two recent posts (12 August and 27 August) on Medtronic’s takeover of Cardiocom, maker of telehealth devices, came the news in the FT yesterday that Medtronic had won cardiology management contracts with NHS hospitals (University Hospital of South Manchester NHS Trust and Imperial College  Healthcare NHS Trust).  They will also develop local cardiac services.

Now in an article today, Fierce Medical Devices explains how the two fit together with the formation of Medtronic Hospital Solutions, “a new business focused on developing novel partnerships with hospitals to  provide services directly related to hospital operational efficiency”. This company will both provide a service to hospital in-patients as well as deploying telehealth to help people stay out of hospital and, if they were in hospital, get discharged earlier.


Perhaps this will begin to drive the use of telehealth in secondary care in the UK which, prior to the NHS’s decision not to reimburse readmissions within 30 days, was a very hard sell to hospitals; indeed even after the 30 day decision, if the chair and chief executive took the enlightened view that it would free up beds for more ‘profitable’ use, those in providing specialties like respiratory and cardiology often saw telehealth as reducing the size of their bed ’empire’ and so strongly resisted it.

Editor Donna comments: Other strategies which Mr. Ishrak has seemingly transplanted from his former stomping grounds at GE Healthcare are:

    1. Trial strategy in Europe/UK before bringing it to the more complex situation of the US, which we see above. A very smart strategy if the case is made and adapted for our shores.
    2. Purchase significant and essentially controlling shares in partners engaging in peripheral but interesting businesses. This is a little dicier in practice. It allows Medtronic to title it a ‘strategic collaboration’; in reality they give Medtronic control of an outside company without excessive shareholder scrutiny re the bottom line. This can work both favorably and unfavorably in several ways. In this instance, the Fierce article notes the ‘strategic collaboration’ of the 30 percent share that Medtronic has purchased in privately-held NGC Medical SpA (NGC) of Novedrate, Como, Italy which operates outsourced catherization labs in Italy. NGC is also a medical equipment manufacturer and has a reported (D&B) revenue of $72 million. Their website is strangely near-moribund, with their last news posted in 2010 concerning a partnership with US-based BioServe’s genetic testing and research services. One advises the current private shareholders to make sure that promises re funding for expansion in Italy and beyond, publicly made now in the release, are kept.
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