Flex CEO on how digital disruption will impact healthcare

How does a company the size of Flex approach digital health? Kal Patel, MD, senior vice president of digital health at Flex sat down with Flex CEO Mike McNamara during JP Morgan's 36th Annual Healthcare Conference to discuss the opportunities and challenges in digital health today.

Kal Patel, MD: You oversee a company with over $1 billion in revenue in each of a dozen industries, including highly regulated fields such as automotive and healthcare. What do you see as the biggest challenges in deploying digital solutions in highly regulated industries?

Mike McNamara: One challenge is the simple fact that the digital journey doesn’t end – it’s iterative and ongoing. For companies operating in highly regulated industries with products that traditionally have long lifecycles – like pharma, where drugs take 10 to 15 years to develop – the idea of constantly iterating and updating solutions is very foreign and uncomfortable.

Another challenge is acknowledging the limitations of your core competency, and finding experts in areas outside that core competency – such as the digital arena. But teaming up with new players or companies outside your comfort zone is difficult. I was on the board of an automotive company, and during a meeting around 2010, I asked if the company had talked to Google yet. This company was a leading manufacturer of electronics for cars, yet, they hadn’t spoken to a key global technology company. I urged them to open an office with 50 engineers in Silicon Valley to immerse them in the technology and innovation of the area, which they also seemed to consider an odd idea. Fast forward to today, and it seems that every car company has a presence in Silicon Valley. It took some time, but they got it.

Rather than trying to invent solutions from scratch and build everything internally, it’s critical to partner with the tech folks when a highly regulated industry is digitizing. For an industry approaching digitization for the first time, there are too many variables and rapidly-changing best practices to go it alone, especially when time to market is critical.

Kal Patel, MD: Do you think these challenges have contributed to pharma’s slow adoption of digital technologies? What do you think can be done to accelerate this innovation?

Mike McNamara: Compared to other industries, pharma has definitely been slow to adopt digital technology. This is partly related to customer dynamics. Currently, consumers have little awareness of what medications, services or treatments cost in healthcare. It's funny - we swap our incandescent light bulbs for LED, and remind our kids to turn off the lights at home to maybe save dollars. With healthcare, we have no idea what things cost or what opportunities exist to save money. My son recently went to the hospital for some pain he was experiencing. The doctor said there wasn’t anything wrong with him, told him to take some ibuprofen, and sent him home. That advice cost eight thousand dollars! What’s not clear to most consumers is why that advice is so expensive. Without improved transparency around healthcare costs, there won’t be strong demand to develop more cost-effective, innovative models of care. Once transparency exists, however, we will begin to see a real impact.

Healthcare innovation has been a long-standing core competency at Flex. We develop the underlying technologies to create intelligent, connected healthcare products and solutions. When a pill dispensing device, or syringe wearable drug delivery solution needs to be connected, we build the technology to enable that wireless communication. When a pharmaceutical or medical technology company comes to us and says, "I need to connect my product," we are always ready with the most current, best-of-breed technology to provide them with the optimal connectivity solution and fastest possible time to market.

And now, with our Flex Digital Health team and our medical-grade IoT digital health platform, we are helping companies capture data from their connected medical devices or combination products, to generate real-time insights. Previously, we saw a lot of our customers trying to build bespoke platforms, and often failing. By providing a regulated platform for rapid integration with our customers’ digital health offerings, we believe we can play an important role in accelerating overall digital health innovation, while giving health providers and MedTech companies immediate access to valuable insight into customer and patient behavior.

Kal Patel, MD: And in my experience, that real-world, data-driven insight is desperately needed by this industry. What else do you see as the biggest opportunities in digital health?

Mike McNamara: Technology, in general, allows us to more precisely understand the problem we're trying to solve, and then to solve the problem, often with a new approach. I think that is specifically true for digital health as well.

I often use the example of a washing machine. For 40 years, companies tried to build incrementally better washing machines — ones that used less water, were more energy efficient, and so on. Then came connected washing machines. The connectivity enables automated reordering of laundry detergent, notifications for when clothes should be transferred to the dryer, etc. Connectivity allowed for people to go about their lives, but also know when their clothes were done. Knowing when your clothes are clean is the problem people want these companies to solve, and a connected washer enables that.

You can see this theme developing in healthcare as well. If you look at improving access to care, reducing the cost of healthcare services, making care more convenient, improving healthcare outcomes and more – digital advances enable us to solve these problems more precisely, accurately, efficiently, and in a data-driven manner, by providing access to the right information when it is needed.

Kal Patel, MD: Last question: what can be learned from other industries on the merits of individual companies deploying independent, siloed solutions versus ones that are part of a broader ecosystem? What examples can you provide?

Mike McNamara: As the world becomes increasingly connected, successful services and solutions are comprised of systems. It's no longer about discrete products. Take a car for example: cars are now all about the integrated system – the engine, brakes, locking system, cameras, etc. are all integrated with the operating system, the driver’s smartphone, the company’s operations team, etc. The connectivity and ancillary services need to integrate with third-party systems and fit seamlessly into the customer’s everyday life. This new reality is going to be particularly tough for healthcare, which is historically comprised of discrete, siloed devices and software systems. Companies in this industry have historically dominated markets by locking out others and notintegrating. Legislation has been required in the past to force some level of interoperability.

Healthcare should look to other industries that have embraced digital and are truly delivering holistic offerings for consumers. Participants in this industry need to build the partnerships and connections that will facilitate delivery of next-generation digital health offerings. Connecting a blood glucose meter and integrating it to a patient’s smartphone isn’t enough. There are only so many health apps a patient will use, not to mention care providers. We’re starting to see companies develop open yet secure offerings, but they are the exception not the rule at this point. There has to be integration with physician health IT systems and EMRs, there has to be accessible to the data for family caregivers, and there has to be integration with the insulin drug delivery device; this combination of integrated touchpoints and information has to be established as a base that continues to expand and evolve, if we want health providers and patients alike to truly benefit from the advantages of the modern digital era, the Age of Intelligence™.

This was originally posted on flex.com.

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