We are asking for expert insights into the pandemic-disrupted future of medical device supply chain and innovation. Xinova’s own medical device Jedi, Dr. Kate Stephenson is a Stanford University Mechanical Engineering PhD with over 20 years of design experience, 15 of those spent exclusively in new medical device products. An additive manufacturing expert with advanced supply chain management expertise, she is the founder of Dyad Engineering, a consulting firm that provides highly personalized, technical consulting services for clients seeking strategic medical device expertise. Built on both deep technical knowledge and broad industry experience acquired from over 60 device projects, Kate focuses on short-term, high-value projects that de-risk new initiatives, and provide clear, actionable pathways for growth. Previous clients include startup founders, investors, industry suppliers, academic groups, and corporate innovation programs.
Like the rest of the world, Kate Stephenson, PhD is now in the Covid-19 business. The technology and strategy consultant is currently working with large and small companies to map out plans for continuing operations that demand on-site work. For instance, a rapid-growth-phase company agreed the manufacturing team is essential to finalizing a massive build-up period critical to launch in the US. The other business units were told to work from home.
Larger companies face more complex challenges and harder questions. How does a GE or a Siemens maintain multiple product lines and services in the face of multiple hits to the supply chain and worker health? How are business operations and growth sustained without travel or human contact? Conferences and events are being shut down. Companies that need to finalize old deals and generate new revenue and leads must do so in new ways.
“Companies are figuring out and identifying what are their ultimate core things they have to do. For the smaller companies, it’s relatively straightforward. But for the bigger companies it’s complicated and carries a larger opportunity cost to shut down certain business functions.”
As a mother, she said that Corona virus poses a social experiment that begins with education. She’s already augmenting her kids’ distance learning curriculum with her own values as a lifelong innovator, encouraging hands-on garage projects, learning new coding skills, and pursuing their passions for fantasy, from reading books to writing fan fiction to playing Dungeons and Dragons.
“I think that building kids’ creativity is so important. Not all engineers think that way, but it’s absolutely the case for me, and I love watching my kids get into their fantasy series and then switch to building a model.”
Family is what matters most. From there, Dr. Stephenson surveys the ever more connected–and uncertain–landscape of entrepreneurship, technology and society through the lens of Covid-19-driven disruption, from the top to the bottom of the value chain.
While Dr. Stephenson doesn’t advocate bulk panic purchasing of toilet paper (it’s a domestically manufactured product), there are legitimate supply chain concerns in the medical device space. The pandemic will force governments to rethink their involvement in manufacturing and supply chains as hospitals face shortages of vital supplies. There are many medical supplies manufactured in foreign countries that can be cut off during transport disruptions. When a medical device manufacturer relies on a single site for a material, a critical event in that country can shut down their entire production until a replacement can be found. The same goes for a number of industries, but with healthcare the consequences can be a matter of life and death.
It goes beyond the big expensive devices like hip replacements and heart valves. Delivering healthcare requires more low-cost disposable products than many realize, from the sterile draping found in a medical clinic to gowns and masks. To prevent the spread of infection, these materials are regularly used and disposed of for every single patient.
“I’m less concerned about disruption to the larger, more expensive metal devices than I am about losing bulk shipments of the consumables that we’re going to see in high demand due to the virus. It’s going to be more of a challenge.”
The White House is weighing its emergency powers to force companies to produce medical supplies, as in WWII when Detroit began manufacturing tanks and airplanes and munitions. Production today centers on ventilators and masks, but Dr. Stephenson stressed that the complexity of a ventilator or heart-lung machine is far from trivial. It’s actually harder to manufacture ventilators at scale from the ground up than it is to change production from cars to tanks.
Getting a single detail wrong on a medical device will compromise its safety. And then there’s the cost of building the manufacturing capacity. This is not just a matter of space and materials, but of finding the special equipment and work force trained to do the work.
A lot of the medical equipment desperately needed at hospitals contains many parts produced with custom tooling, either molds or stamp and die sets. But the low-cost tooling infrastructure is located in China. Whole new “simplified” devices can’t be invented, validated and manufactured at a scale to meet the need effectively. The time and effort to get the designs working effectively, and then manufactured, would off-set any benefit of their simpler construction. The innovation workarounds that are going to be the most effective are those that take existing, validated designs and rapidly assemble the resources to make them in large quantities, while protecting the workforce from infection.
“I’ve already seen FDA-approved, simplified, streamed-down version of ventilators. And the manufacturers of those devices are expanding their manufacturing capacity as fast as they can.”
The future of healthcare and medical devices will likely be shaped by post-Corona virus considerations. Hospitals, for instance, have often been standing since the 1970s. How might they be rearchitected to withstand future pandemics, from IoT to HVAC to safety against hackers? A slight over-pressurization on ventilators could be lethal; a change to chemo or IV pumps could be as well.
“Hospitals have the infrastructure to bring in IoT but they lack the infrastructure to make all those Bluetooth-connected devices safe.”
But the immediate danger to heath is clear and present. COVID-19 is a force of destruction and, as a result, innovation.
“The type of innovation that we’re going to be seeing is going to involve leveraging existing resources and processes. For example, like, my husband and I have been fighting a basic, classic case of the flu. But last week, we were able to get a video meeting for the first time ever with a doctor in our clinic. And I think that service has been available for three to five years now, but it’s just been very heavily underutilized. And now they’re like, ‘If at all possible, do video appointments!’ And so, we’re seeing things that were before too much of a pain in terms of educating your team, of changing your protocols, or of adjusting your system to use them on a wider scale. The push hasn’t been there till now.”
Telemedicine or telehealth—delivering healthcare over distance—has received a great deal of attention since the corona outbreak. Telehealth is not a new concept; excellent technology exists for measuring, diagnosing and even treating patients over long distances, from digital consultations to image processing to advanced robotic telesurgery. But getting a system in place for mass adoption remains full of technical gaps.
The insurance question is a crucial stumbling block. Interestingly, Dr. Stephenson noted that just this January she was at a conference where it was announced that major insurance companies have released new codes for telehealth.
“A lot of time people will say, ‘Oh, regulatory, it’s so horrible, it takes so long to get through the FDA.’ That’s actually the low hurdle. Getting a brand-new code from the insurance company is the biggest hurdle to new technologies becoming widely distributed.”
With the pressure of a global pandemic, Dr. Stephenson said the result on innovation will likely manifest in terms of supply chain and distribution innovation, rather than new physical products.
“I don’t see there being an intense new period of product innovation in answer to the challenges posed by the pandemic so much as I think that the technologies and answers we already have will be put through extreme cycles of test and improvement.”
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