In a strange symmetry, last week began and ended on the subject of retirement. On Monday, I was in Lyon, France, to visit nearby companies for a series of articles. I had planned on taking the TGV on Tuesday afternoon to be in Brussels in time for the start of the Eucomed MedTech Forum. I learned Monday night, however, that most of the trains would not be running the next day because the French railroad workers had called for a strike to protest government plans to raise the minimum retirement age from 60 to 62. One never knows in the early stages if these social movements will fizzle or flare up without warning into a full-blown nationwide shut down, so I took the cautious route and hopped on the first available train for Brussels. A different perspective on retirement came up during the MedTech Forum keynote session on Thursday, 14 October, delivered by Professor Sweder van Wijnbergen, PhD. He noted that advances in the treatment of heart and coronary disease have extended life expectancy by an average of three years of active living. There is a cost attached to the delivery of more and better healthcare, he added, and that has dug a budgetary hole that gets deeper with each passing year. One way to begin to fill that deficit, Wijnbergen suggested, is to raise the retirement age.
“Since healthcare is giving us more active years, why shouldn’t society give back some of that surplus in the form of extending the working life?” asked Wijnbergen, who earned his PhD at the Massachusetts Institute of Technology and was a chief economist at the World Bank in Washington, DC. His calculus is deceptively simple: the average cost of treatment for heart and coronary disease is US$30,000 per capita. That increases life expectancy by approximately three years. Since one year of productive life is worth approximately US$100,000 in revenue—a generally agreed upon figure in economic circles, according to Wijnbergen—that leaves US$75,000 coming back into the economy. Raising the retirement age by a couple of years, argued Wijnbergen, is a reasonable price to pay for those extra years of a healthy, quality life. Of course, French labour unions might take exception with that thesis.
The future of healthcare—and the push-pull of an ageing population driving demand for health services as governments struggle to rein in costs—was at the centre of many of the sessions during the two-day event in the Crowne Plaza on Brussel’s Place Rogier. Compounding the difficulties of the device industry is its apparent inability to effectively promote its achievements.
The healthcare sector is great at delivering results, but it does a lousy job at educating the public and politicians on the benefits it brings to society and the inevitable associated costs, said Wijnbergen. (As any veteran of medical technology conferences will confirm, this is not a new trope. I have been hearing it for years, and yet nothing seems to change on this front.) “Healthcare is more expensive today because we get more of it. Medical technology is letting people do things that used to be the stuff of science fiction,” he reminded attendees. And as Eucomed Chief Executive John Wilkinson noted at the end of the session, “there is a mismatch between what [the medtech industry] contributes and how it’s perceived.”
Here are a few more memorable statements culled from the Eucomed MedTech Forum:
“We are here to try and understand the future. One thing is for certain: what drove our industry in the past 20 years has nothing to do with what will drive it in the next 30. There will be fewer MDs, fewer nurses. Patients are going to have to take care of their own health. We will be making products for people with little healthcare knowledge. A huge change is coming to our industry, and if you don’t prepare for it, you may find yourself lost.” Guy J. Lebeau, MD, Company Group Chairman, EMEA, Johnson & Johnson; and Eucomed Chairman
“Safe, smart, sustainable—I like all three of those words. But can this approach help us to innovate in the next 20 years? Our goals should be to put 3% of GDP into R&D, develop our own industrial policy for a globalised era, reduce the administrative burden on companies, and establish a pan-European patent. Why should we have to repeat the patent process 10 times?” Pierre Guyot, CEO, Mölnlycke Healthcare
“Medtech companies that don’t have a global perspective won’t survive. You have to be involved in China and India. I see many solid, strong companies in Europe, but they don’t have a truly global perspective.” Heinrich Christen, Economic Consultant
“All of the economic excitement is in Asia and [to some extent] in the United States. The European Union is seen as a fragmented market. It needs to speak with a single voice and have a common reimbursement system.” Steven Dyson, Apax Partners
“We need to articulate assessments so that they can be understood by procurement officials, hospital administrators and patients, not just NICE [technicians]. Studies presented to stakeholders need to be simplified and tailored to their decision-making needs.” Professor Panos Vardas, President, European Heart Rhythm Association
“In 2009, revenue among Europe’s medtech companies went up 8% and net income was up, almost shockingly, 29%. The dollar effect played a role, of course. IPOs plummeted in 2008, and they haven’t budged since. If you are planning an IPO in the medtech sector this year, you will get a lot of attention.” Heinrich Christen, Economic Consultant
“The medtech industry’s fundamentals are strong, but I wonder if we aren’t overly nostalgic, longing for the “good old days.” We cannot turn back time. We have to move forward, and that means [taking into account] China and India. We need to embrace new business models, especially in these new geographies. In August, in collaboration with China’s Ministry of Health, we opened a “shop” where we demonstrate our products to physicians who don’t have time for this at their practices. They can come to the shop at their leisure and handle the products and talk with our engineers. We would never have thought to do this in Europe.” Alain Coudray, Vice President, Cardiac Rhythm Disease Management Europe, Medtronic and Vice Chairman of Eucomed Board of Directors.
More coverage of the Eucomed MedTech Forum: