IVD Technology
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Originally Published IVD Technology September 2005
Commentary
Creating solutions-driven diagnostic innovations
Donal Quinn
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| Donal Quinn is president, global customer management, at Dade Behring Inc. (Deerfield, IL). He can be reached at donal_quinn@dadebehring.com. |
While the healthcare environment undergoes continuous changes on many fronts, the demand for technological innovations remains constant and intense. The contributions of the IVD industry to healthcare innovation are unique in their practicality and customer responsiveness. At the same time, they are often unrecognized, in part due to their intimate connection with the daily operations of clinical labs. Advances in bioinformatics, proteomics, functional genomics, and data networking are a few of the innovations that are expected to influence directives for patient care and outcomes-based medicine.
Diagnostic innovations will play a critical role in all of these areas by better enabling labs to ensure accurate diagnoses that can save lives and contain healthcare costs. At their most effective, innovations in the IVD industry must be relevant—or in the language of laboratories, they must translate customer needs into new technical solutions and create solutions for existing customer problems, not for problems that nobody had ever thought of before. The IVD industry has recognized that its greatest impact is achieved when innovations integrate the changing needs of the healthcare delivery system with customer requirements and expectations. However, customers are telling IVD manufacturers that they need to do more.
Greater Expectations
Molecular biology, disease management research, genomics, proteomics, noninvasive/alternate samples, data networking, miniaturization. Those are a few of the innovative technologies that IVD manufacturers have produced in response to outcomes-based medicine, direct-to-consumer marketing, pharmacogenomics, and medical necessity reimbursement. While technological breakthroughs receive high visibility, a broad range of operational challenges have caused laboratories to expand their perspectives and consider not only the innovative technologies that are essential to test production, but also those that drive advancements in such diverse areas as process, finance, service, and ease of doing business.
Lab test economics remain front and center in healthcare, and reimbursement realities have reinforced the need to understand how new technologies translate into daily laboratory operations. The IVD industry is not yet fully meeting this need.
Dade Behring Inc. (Deerfield, IL) sponsored research on the U.S. IVD market to identify laboratory perceptions of diagnostic innovations and determine how well the IVD industry is meeting customer expectations. The study design incorporated both questionnaires and focus group interviews in order to secure the individual perceptions of survey respondents while leveraging the synergistic action of a group setting.
Representatives from hospital laboratory management participated in the market research, including representation from a range of small to large hospitals. Since innovation drivers are primarily concentrated in large hospitals and teaching institutions, the participant base for the study was weighted heavily in midsized to large hospitals, with 45% from hospitals with more than 400 beds, and another 45% from 200- to 399-bed institutions. The remaining 10% were from institutions with less than 200 beds. The survey design included participants with a range of departmental management responsibilities at laboratories that have varying test volumes and use a number of different product brands and vendors.
Survey Results
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| Figure 1. Survey results on the importance of customer-focused innovations. |
The survey participants established a baseline for IVD industry performance expectations by ranking the importance of customer-focused innovation and providing criteria for innovation performance supported by open-ended commentary. When asked to rate the importance of customer-focused innovation on a scale of 1 to 10, 82% of participants ranked it 8 or higher (see Figure 1). This result affirms the customer-centered product-development processes cultivated by the IVD industry, which spends almost $2 billion per year in research and development. The survey also revealed the desire of lab decision makers to collaborate more closely with the IVD industry and improve its ability to meet their innovation expectations. The desire for increased collaboration is consistent with the survey group’s perception of performance gaps in innovation delivery by the industry.
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| Figure 2. Survey results on IVD manufacturers meeting customer expectations. |
In fact, laboratory managers indicated in the survey that IVD manufacturers need to do more to meet real-world innovation requirements. While 82% of those surveyed ranked the importance of customer-focused innovation within the top three, only 53% felt the same way about the ability of IVD manufacturers to meet their expectations (see Figure 2). The gap between the high importance of innovation and the perceived ability of IVD manufacturers to meet innovation needs sends a clear message that customer input in diagnostic product development is not enough. The IVD industry should acquire an intimate understanding of the customers’ definition of innovation and their expectations for delivery.
The research also reinforced many of the commonly understood elements of innovation, including customer expectations for investment in primary research, creative thinking, development of solutions-based technologies, and creation of new diagnostic parameters. The survey participants considered all of these areas to be demonstrations of a willingness to invest. The interesting perspective was the participants’ clear differentiation between product developments anticipated for the future and innovations for addressing today’s needs. Such distinction indicates the need for IVD manufacturers to invest in practical, incremental innovations that respond quickly to marketplace demands.
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| Figure 3. Survey results on elements of customer-focused innovation that IVD manufacturers should address. |
According to the survey, laboratory managers responded to innovations that provided solutions to problems they face daily in their lab operations, and they want those solutions more quickly. A majority of the lab managers said that IVD manufacturers should focus on addressing today’s issues in their innovation delivery. This response was followed closely by innovations that recognize the needs of the laboratory and exploit information technology tools. Less frequently mentioned elements of customer-focused innovations included creative nonproduct solutions, service innovations, and cost-effective solutions for the laboratory (see Figure 3).
In summary, the survey uncovered four key themes about the perceptions of customer-focused innovations. First, diagnostic innovations should be based on knowing customer needs. This was defined as addressing everyday challenges, and providing technologies that are accessible and easy to understand and implement. Second, diagnostic innovations should be incremental. There was no interest in new complex systems that are not fully developed for easy implementation into today’s laboratory. Third, innovations should be affordable. Survey results showed that today’s laboratory managers expect new technologies to add well-defined value and aid the lab in reducing overall costs. Finally, innovations should be expanded beyond products to include processes such as inventory, training, and materials management. Laboratory managers are interested in nonproduct innovations that improve the ease of doing business.
Redefining Innovation
Laboratory managers face real economic and operational constraints that mandate solutions that not only provide measurable cost savings, but also are simple and practical enough to deploy. They distinguish between long-term and short-term solutions, and demand customer-focused innovation on their terms from the IVD industry. The IVD industry has numerous opportunities to collaborate more closely with laboratories to deliver the right tools. The survey was a first step in identifying and closing the gap between industry deliverables and customer demands. IVD manufacturers have a responsibility to evaluate continually their role in developing and providing innovations, and assess the accessibility of new technologies through responsive collaboration with laboratories.
Part of the IVD industry’s responsiveness demands an expansion of the definition of innovation. Such an expansion prioritizes not only technical innovation, but also a wide range of creative and inventive problem solving that meets the standard of customer-focused innovation. The IVD industry shares a common commitment to meet the increasing demands of a growing healthcare market, and IVD manufacturers have responded by providing an array of new technologies, from advanced automation to molecular technology. Clinical laboratories acknowledge this, and value all that manufacturers do in developing new testing parameters and expanding technology horizons. At the same time, customers are asking the IVD industry to keep sight of incremental innovations that address their daily needs even as manufacturers invest in breakthrough technologies for the future. The IVD industry must provide innovative technologies that work in today’s laboratory, and commit to delivering technologies compatible with employee skill sets and staffing at a cost that is commensurate with reimbursement levels.
Conclusion
Customer-focused innovation is a product of committing to long-term customer relationships and a unique understanding of customer needs. With this philosophy, innovation complements a lifelong partnership with customers, not only providing practical solutions to meet their needs today, but also moving together with them along a continuum to envision their future needs. When customers are positioned at the center of innovation, it demands an innovative approach that is not confined only to technology, but is free to explore inventive and creative problem solving and a range of ideas and approaches. This freedom is at the heart of creating solutions to everyday challenges in many areas, from finance to process, service to customer experience, and delivery to product performance.
Through a strong commitment to innovation, the IVD industry is well positioned to deliver new practical technologies that will springboard advancements in healthcare and set the foundation for the future of patient-focused care. The industry should close the innovation gap and provide greater levels of performance and commitment to customer-focused innovation.
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