Accelerating and Sustaining Growth
What are the dynamics that make a medical device company great? While industry leader Medtronic has had a successful formula for more than 70 years, it’s the evolution of that formula that has driven the company forward. The company’s key markets include cardiovascular, medical-surgical, neuroscience, and diabetes. The cardiovascular portfolio includes cardiac rhythm and heart failure products. A deep dive into this segment of the company’s overall business helps illustrate how the company is “poised to accelerate and sustain growth.” Michael Meissner, vice president and general manager of Medtronic’s CRM Patient Management, shares insights into the medtech giant’s CRM strategies as well as the objectives and visions that continue to drive the company’s growth and success.
Meissner joined Medtronic because of its industry-leading portfolio. Medtronic was the first to introduce cardiac remote monitoring in the United States in 2002, and since then, the technology has evolved and become even easier to use. It is also the first company to offer app-based remote monitoring for its entire portfolio of devices, including pacemakers, implantable cardioverter-defibrillators (ICDs), and cardiac resynchronization therapy devices (CRTs), said Meissner.
“The app-based technology puts the power of healthcare directly into the hands of patients, giving them more control and peace of mind,” he said. “I lead a team that supports this important work — work that can help patients live better lives. We are constantly thinking about what’s next and how we can enhance our systems and technologies to further improve quality of life for our patients.”
Medtronic is focused on alleviating pain, restoring health, and extending life. This mission “has guided the company for decades,” said Medtronic Chairman and CEO Geoffrey Martha. Martha spoke at the Morgan Stanley Global Healthcare Conference in September 2021. “Our top priority here is sustainable, accelerated revenue growth at or above our end markets,” he said, adding that this strategy also helped guide the company through the pandemic.
“We saw that the pandemic really accelerated the adoption and growth of cardiac rhythm technologies,” said Meissner. “While there was interest in remote monitoring in the past, its usage had somewhat plateaued before the pandemic. COVID-19 created a much greater need to care for patients in their homes, and remote monitoring quickly came to the forefront of patient care because of how it aligned with the safety protocols required to minimize exposure to the virus and preserve personal protective equipment for clinicians.”
Fast forward through the COVID-19 pandemic, and now millions of heart device patients benefit from remote technologies, connected by smart apps, allowing doctors to monitor and manage their heart conditions wherever they are. “And this comes by way of a smartphone that sits right in their bag or pocket,” said Meissner. “Remote technology also allows for telehealth and/or drive-through care at clinics, which was a big plus during the pandemic, and it delivers alerts that can increase care response times and save lives.”
As the world moves past the pandemic and looks toward the future, Meissner said the benefits of remote monitoring won’t disappear.
“It will continue to be incredibly beneficial for patients as they look to understand their health status and the status of their implanted device,” he said. “We’re going to see this technology continue to grow and serve patients, which is the ultimate goal.”
Setting Itself Apart
Over the past year, Medtronic implemented a series of transformational, structural, and cultural changes, including cutting costs, moving to a nimbler operating unit structure, and eliminating stocking to “unlock the value of the company.”
Eliminating the stocking orders, said Martha, has been “massive” for Medtronic. “And it gives us visibility into utilization that we didn't have before. We do a large stocking order in a quarter, and it takes a couple of weeks for the health systems to burn through that. And now we don’t have to deal with that dynamic,” said Martha. “We have visibility in utilization. It also improves the accountability of our businesses. We can hold our sales teams accountable.”
But the big cultural change is what Martha called “the Medtronic mindset.” “This is competing harder and taking bigger bets. We’re seeing it play out in a number of our businesses,” he said.
In order to sustain growth, however, Medtronic also implements some unique strategies to set itself apart as a leader in supporting patients and their care teams. According to Meissner, Medtronic is the only company whose entire portfolio of cardiac implantable electronic devices — pacemakers, ICDs, CRTs, and insertable cardiac monitors (ICMs) — are compatible with a smartphone app.
“That’s a major step in supporting our patients because we are able to provide patients and their care teams with the tools they need to monitor their device remotely, no matter what device the patient has,” he said.
Remote monitoring with the latest smartphone-connected Medtronic cardiac devices allows physicians to bring care to the patient instead of always requiring the patient to go to the clinic or hospital. And even in non-emergency situations, transmitting device information to the physician can lead to more timely adjustments to the patient’s care plan.
“Patients are at the heart of all we do, and we are always working from that mindset. As a remote monitoring business, we’ve had to look at 1) what patients need and want, and 2) how clinicians and care teams are supported and give them the tools they need to optimally care for their patients with devices,” Martha said.
Meissner noted that collaboration with physicians who use their products is vital to the company’s goals and objectives in its patient management business. “When it is safe to do so, we make it a priority to get our patient management employees to our customer sites to get feedback on our products to ensure that they are working as designed and meeting the needs of physicians working with patients every day,” he said.
Strategies for Innovation
ANNUAL TOTAL REVENUE* $30.117 billion GROSS PROFIT* $19.634 billion *as of April 2021
Q2 FY 2022 TOTAL REVENUE* $7.847 billion GROSS PROFIT* $5.350 billion *as of October 2021
CARDIAC RHYTHM Q2 FY 2022 TOTAL REVENUE $1.471 billion
Driving leverage and operating margin expansion are both key elements in translating Medtronic’s long-term growth objective of 5 percent plus in the top line into 8 percent plus on the bottom line, Martha said. “So, as we drive margin expansion, we expect to get back to pre-COVID levels, and then continue to drive further improvement in our margins. And we can do this simultaneously with investing in innovation,” said Martha.
Meissner said it has been critical for Medtronic to continue to be nimble and adaptable, even in the face of great challenges, like the pandemic. Through it all, though, he emphasizes that the company has kept patients at the forefront of all that they do.“These two aspects have helped us excel throughout our history,” Meissner said. “We know that the world is going to keep changing. Our patients and their preferences will change. Our world and technology will change by leaps and bounds. We’ve seen it happen just over the last year and a half, so there is no question the future will be equally as full of change.”
In order to innovate and evolve in remote monitoring, he said, “We must continue to adapt — not just in the face of necessity, but constant adaptation based on key insights and learnings that we gather from the patients and physicians who use our devices. Their experiences and feedback provide vital insights for us to then continuously examine our products and iterate as necessary. We strive to remember the ‘why’ of what we do, and it is at the core of our mission to help patients live better lives.”
Trends to Follow
With more than $25 billion in R&D investments, Medtronic is innovating across its portfolio to create patient-centered products by developing a robust pipeline of disruptive technologies as well as growing its footprint in emerging markets.
“In 2017, when we could monitor patients’ pacemakers via smartphone instead of a bedside monitor, that was a major milestone,” said Meissner. “Recent data shows that 25 percent of patients use their smartphones and a Medtronic app to monitor their heart, and having app-based monitoring has shown increased adherence to their doctor’s guidelines.”
According to a study published in Heart Rhythm O2, adherence increased from 77 percent to 95 percent when patients switched to the mobile app from bedside monitors.
“Smartphone and app-based technology is constantly evolving, and consumer preferences and our technological landscape is changing as well,” said Meissner. “Especially with the pandemic, patients want these new options and new ways of monitoring. Convenience is important, and so is easy-to-use interfaces that get patients the information they need (in order to know that everything is working properly) and the information they want so they can be in control of their lives and health. At Medtronic, we are always working to further enhance our patient mobile app. App-based monitoring is available across our entire cardiac device portfolio.”
Meissner said that remote monitoring technology such as wearables and new smartphone apps will continue to grow and be available to monitor, diagnose, and even treat various health conditions. He said patients want more personalized solutions so that they and their health teams can make a care plan that is incredibly tailored but also can give each individual patient the level of feedback and information they are looking for.
“We’ve seen this sort of customization and personalization in other aspects of our lives and technology, so it only makes sense that it is applied to heart devices and the patients that use them. And at Medtronic, we are continuing to innovate in order to constantly enhance the patient experience.”
Investing in People
“We’ve instilled new cultural traits, including acting boldly, competing to win, moving with speed and decisiveness in everything we do, and getting results with getting them the right way,” said Martha. Medtronic, he said, has spent a lot of time deploying capital and thinking about how to do that through investments in organic R&D as well as disciplined M&A to leverage its balance sheet. And then there are the people.
“Employee engagement at Medtronic is at the highest levels we’ve ever had. I think they’re excited about this new approach and the aggressiveness, but they’re also excited about our pipeline,” said Martha.
Meissner said that, for him, working with a team that supports such important work as remote monitoring technology has given him the privilege to see how it can directly help patients live better lives.
“Throughout my career, I’ve watched the medtech field evolve, but I see the potential for further innovation to manage various health conditions with technology. I think that this technology has and will continue to be incredibly relevant for improving response times and saving lives when a transmission indicates that a heart device patient needs immediate attention,” said Meissner.
“The patient and their care team can act fast to remedy the situation, which is something that, not all that long ago, wouldn’t have been possible. In the early days, patients received no feedback on their transmissions until they went in to see the doctor. That’s clearly not the case anymore; by growing this technology, we will positively impact even more lives.”
Medtronic requires its suppliers to “develop and maintain highly capable processes that produce quality products and services,” and specifically details the expectations it as of its suppliers on its web site. It has even put together a 34-page “Supplier Quality Excellence Manual” that can be downloaded. Medtronic says is considers its suppliers to be “a key partner in our pursuit of quality for our customers, and the patients who depend on our products and therapies.”
As part of that commitment to quality, Medtronic is actively involved in MedAccred, a program designed to ensure critical manufacturing process quality throughout the medical device supply chain. Administered by the Performance Review Institute, MedAccred offers device OEMs value because it conducts rigorous audits of critical processes deep within the supply chain.
“As a leader in the medical device industry, Medtronic is strongly committed to the MedAccred program to drive improvement in product quality, and most importantly patient safety,” said Connie Conboy, director, MedAccred. “Medtronic is actively involved in the MedAccred Management Council, along with many of the strategic subteams and technical task groups and has championed this transformational approach to critical manufacturing process supply chain oversight.”
Medtronic “is really about looking at special processes [in which] we can’t detect defects either through receiving inspection or even in manufacturing inline inspection,” Ann Sheldon, vice president, product security and former vice president of global supplier quality noted about the program during a session at MD&M Minneapolis in 2019. “A lot of times we will see latent failures that are process related and undetectable. So, this will go in and look much deeper at a process than we would through any sort of a QMS audit and be able to show the repeatability of the process and the materials we’ll be getting.
For more information, visit here .