What medtech can learn from digital health

SAN FRANCISCO — Big medical technology companies have the trust of hospitals. But digital-health startups are the ones developing the most exciting new technologies. Given partnerships and acquisitions lately, it looks like these two kinds of businesses can help each other.

Take medical-device maker Covidien, which bought wearable-device startup Zephyr Anywhere earlier this year. Covidien is publicly traded, and it’s only natural that it looks out for technology that can improve performance, lower costs, and enhance patient experiences, while also being predictable from a top-line and bottom-line perspective.

“Zephyr was able to do that beautifully,” Stacy Enxing Seng, president of Covidien’s vascular therapies division, said onstage today at VentureBeat’s 2014 HealthBeat conference.

Look, too, at Intel’s Basis acquisition and Medtronic’s Corventis purchase as more proof that big companies are looking for health innovations. (Meanwhile, even Medtronic moved to buy Covidien itself.

And in addition to outright acquisitions, medical-technology companies’ venture arms — like the one Covidien has, for example — can help these old-school companies “gain insights on emerging therapies or possibilities that can be incorporated into the company,” Enxing Seng said.

That might be because startups can get technology out quickly, while legacy companies have deep experience with the regulatory approval process.

“It takes a lot of dollars typically to move it through the health care system,” Enxing Seng said.

The young startups, though, don’t always match up culturally with the big companies they team up with.

“They don’t swear at meetings,” said Brian Russell, Zephyr Anywhere’s chief executive, triggering audience laughter. But more generally, startups do “need to learn their language” in order to explain to them the ways in which their hip technologies can align with the needs of the med-tech providers.

In any case, the collaboration is happening on a greater scale as of late, and it seems these new digital-health startups have an approach the med-tech vendors like.

“I think consumerification of health care is very, very important,” Russell said.

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