Abstract
This article shares research findings from the healthcare equipment manufacturing industry on how product management teams can enhance their value-based innovation processes. Value-based healthcare (VBHC) has transformed healthcare systems worldwide by shifting their focus towards patient-centred value creation. The VBHC concept has also inspired medical equipment manufacturers that seek to enable healthcare providers to realize their VBHC ambitions. In this article, we focus on the development of hybrid solutions for operating rooms in the context of VBHC. Hybrid operating rooms (HORs) add real-time medical imaging to surgical and interventional treatment of patients. This combination is quite challenging to realize, not just in terms of technology but also organizationally. Adjusting technology to the requirements of multiple clinical stakeholders drives complexity to unprecedented heights. How can product strategists manage this multi-stakeholder complexity? Through in-depth case research, we found that adopting a clear VBHC vision is key for product management teams designing HOR innovations. A VBHC vision allows multiple teams to align and effectively collaborate with the goal of enhancing patient care. In addition, we found that integrating inside-out and outside-in perspectives on product innovation helps medical equipment manufacturers produce VBHC-compatible innovations and foster collaboration between clinicians working in multipurpose rooms such as HORs.
Introduction
Healthcare systems worldwide are transforming towards value-based initiatives that aim to optimize clinical outcomes in relation to the associated costs of care (Porter & Teisberg, 2006). The hybrid operating room (HOR) is a multipurpose environment that enables a variety of clinical teams to use medical imaging tools, like X-ray equipment, to more effectively guide patient treatment. However, the range of image-guided therapies is limited by the technical features of current HOR solutions. For instance, the patient table, despite being a central piece of the HOR, often limits the scope of the clinical applications. Some table models are fully integrated with the movement of the imaging equipment around the patient during interventional procedures, but are not recommended for open surgery due to their low resistance to liquid spillage and subsequent compromised level of sterilization. On the other hand, trying to integrate a surgical table with the imaging equipment increases the HOR installation costs and often results in limited imaging options due to the subsequent reduction in the movement of the tabletop.
Therefore, improving current offerings would enable healthcare providers to perform more complex surgeries using minimally invasive techniques and also guarantee a safe and sterile environment in the hybrid suite (Choi et al., 2019; see also Vascular News, 2015). Nevertheless, meaningful product innovation is a challenge to manufacturers of medical equipment, as they must wisely balance their technological strengths and limitations with the changing needs of multiple clinical teams. The main players in the HOR market—Philips Healthcare (Netherlands), Siemens Healthineers (Germany), Canon Medical Systems (Japan), GE Healthcare (USA) and Shimadzu (Japan)—seek to innovate and bring new solutions that are aligned with the needs of healthcare providers. However, conventional product management strategies no longer translate into competitive sustainable advantages; rather, they result in incremental innovation that adds little value to healthcare systems or predominantly focuses on matching solutions already offered by competitors. Thus, the development of new HOR solutions needs to be realigned with the VBHC transformation. Fostering value-creating innovation within the HOR environment is a challenge that requires the coordination of multiple clinical stakeholders and a balance between inside-out and outside-in perspectives. On the one hand, HOR innovation must meet the needs of diverse clinical teams and allow each to optimize their workflows and respective patient outcomes. For example, how can innovation answer the needs of cardiovascular interventionalists and neuroradiologists with the same HOR technology? On the other hand, while product innovation must address such complex needs, meaningful innovation may also disrupt the current status quo and enable new treatment options within the HOR. Could cardiovascular surgeons join interventionalist colleagues in the HOR and work together? Would spine surgeons and neurosurgeons perform better surgeries if they could use HOR technology? HOR product management teams are capable of, and therefore responsible for, aligning multiple clinical teams and enabling the use of HORs in novel clinical applications. Thus, maximizing the synergies among multipurpose teams in the HOR aligns with Porter's VBHC concept: multi-team collaboration correlates with improved patient care and broadening the scope of clinical applications of the HOR increases cost-efficiency. This article shares the outcomes of our research revolving around the question, The value created is meaningful for the users of current HOR solutions. The value created is superior to that found in competing offerings. When incremental value is added, it justifies the cost of replacing existing HOR alternatives. The value of new HOR solutions is expanded to clinical stakeholders other than those who already benefit. The overall value created for new users is not cancelled out by a decrease in the value experienced by former HOR users. The value created represents a new business opportunity that unlocks a market with potential to grow and, consequently, justifies the resources invested in development of the HOR solutions. Every component of value created directly correlates with improved patient outcomes.
In order to respect these criteria while creating meaningful HOR innovation, we analysed two business-level strategies and compared each against an integrative synthesis. We theorized that product management teams can adopt an integrative thinking approach (Martin, 2007a) that leverages the benefits of both inside-out and outside-in perspectives (Meyer, 2007). In this way, we encourage strategists to synthesize both market-driven and resource-based methods and discover the benefits of not choosing either but a synthesis of both. Last, we analyse the limitations associated with integrative and conventional strategies to alert product managers to their respective pitfalls.
This article begins with a literature review covering the VBHC transformation and product development strategies. We then describe Martin's integrative framework and explore its applicability to the HOR patient table. Finally, after analysing the limitations associated with the various strategies, we provide our recommendations for successful innovation within the complex HOR reality.
Value-based Healthcare
Healthcare systems around the world are being transformed towards patient-centred and value-creating models as a response to the distress caused by the ageing and growing population and respective rising costs of care (Keehan, 2011; Porter & Lee, 2013). Porter and Teisberg (2006) define value as the ratio between the health outcomes achieved by patients and the costs incurred, or simply ‘health outcome per dollar spent’, and introduced the value agenda to guide institutions through the VBHC transformation. Their agenda aims to tackle the key issues that characterize healthcare systems throughout the world: high rising costs, restricted access to some basic services and overuse of others, lagging standards that fail to follow accepted benchmarks, common and preventable diagnosis and treatment errors, enormous price and quality variations across providers and geographic areas, slow spread of best practices and high resistance to innovation. Their suggested principles for value-based competition start with shifting the focus from cost reduction efforts to value-creation initiatives. The value agenda promotes unrestricted competition based on clinical practices that monitor the development of medical conditions throughout the full cycle of care, that is, from prevention and diagnosis to post-treatment follow-up. Consequently, the value-based transformation requires healthcare stakeholders to focus on patients and relies on continuous monitoring of outcomes and costs, on both a per-patient basis and throughout the health continuum.
Researchers and clinicians worldwide have embraced the value agenda and designed a variety of healthcare programmes that have led to promising clinical trials for different pathologies, such as breast cancer (Fayanju et al., 2016; Porter, 2010), inflammatory bowel disease (IBD; Ahmed et al., 2019; Van Deen et al., 2017) and thyroid cancer (Ying et al., 2016). Fayanju et al. (2016) concluded that a value-based framework creates new opportunities in breast cancer care, since it allows performance improvement across the health continuum, enables benchmarking across providers, systems and countries and improves patient outcomes. Ying et al. (2016) explored bundled payment models for the care cycle of patients with thyroid cancer and proved that such reimbursement models encourage healthcare systems to strive for excellence of care and facilitate patient engagement. Van Deen et al. (2017) showed that applying a value-oriented approach during the cycle of care of patients with IBD leads to fewer endoscopies, surgeries, hospitalizations, emergency visits and imaging studies; this decreases care costs and improves the life quality of patients. Furthermore, nationwide programs have been designed in North America to advance the value-based care of cardiovascular and spine patients (Asher et al., 2020; Psotka et al., 2020). Thus, it is clear that initiatives focused on patient value creation result in improved clinical outcomes, with cost reduction as a positive consequence.
The ongoing transformation is not limited to healthcare providers and has extended to suppliers of medical equipment, as they play a key role in patient outcomes and the associated costs (Handke, 2017). Medical device manufacturers, such as Philips (Eindhoven, The Netherlands) and Medtronic (Minneapolis, MN, USA), have embraced the value-creating transformation and conducted clinical studies to assess the value creation provided by proprietary technological innovations. In February 2017, Philips introduced the next generation of angiography systems, the Azurion 7 series, which includes a more powerful X-ray generator than previous models. Schmidt et al. (2019) compared the quality of the X-ray images and measured the radiation exposure for 173 patients undergoing cryoballoon pulmonary vein isolation, and confirmed that the enhanced imaging quality improved the medical diagnosis and reduced costs. The value of the Medtronic tonsillectomy device BiZact was assessed in a study of 186 patients, which indicated the use of the new vessel sealing technology results in a reduced operating time, decreased intraoperative blood loss and quicker patient recovery (Krishnan et al., 2019). In summary, healthcare transformation creates value-based competition not only among care providers but also among suppliers of medical equipment who are gradually shifting forward across the value chain of care delivery and becoming closer to patients (Porter & Teisberg, 2006). However, the subsequent challenge for manufacturers of medical devices is to learn how to steer product development towards the value-oriented needs of the caregivers, while simultaneously leveraging internal resources such as technological capabilities.
Integrative Approach to Product Development
The Philips Azurion angiography systems and Medtronic BiZact tonsillectomy device are good examples of asset-based improvements that are aligned with the value-oriented healthcare transformation. Azurion represents a fine solution that leverages Philips’ extensive experience of developing X-ray imaging equipment to address radiologists’ need for enhanced image quality and demand for reduced dose exposure. The BiZact device is based on Medtronic's proprietary LigaSure™ vessel technology that helps surgeons to reduce blood loss during surgery and, at the same time, shorten the operating time. Both solutions leverage the firms’ technology assets and simultaneously address the needs of healthcare stakeholders, that is, radiologists and surgeons, while creating value for patients. However, leveraging internal in-company strengths and answering the market's needs are conflicting perspectives that are often perceived as mutually exclusive by product managers, who frequently fail to effectively leverage both aspects and often cannot identify the optimal midpoint that translates into a competitive advantage.
The tension between markets and resources has been analysed by Meyer (2007), who describes two business-level perspectives: outside-in and inside-out. The former is a market-driven strategy that helps companies to identify attractive market opportunities and leverage first-mover advantages; the latter is a resource-based strategy that is built around the company's strengths and exclusive assets and relies on their long-term development. Inside-out strategists consider resources, the leading path to success and give strategic importance to patents, technologically oriented capabilities and long-term relationships with partners. On the other side, outside-out strategists claim that for success, the markets lead and resources follow, and that a competitive advantage can be achieved when firms differentiate themselves from the competition in favour of their customers in a manner that is sustainable, difficult to imitate or not easy to replace. Market-driven executives detect business opportunities and help firms to build first-mover advantages by deploying resources accordingly (outside-in), while resource-based executives identify difficult-to-imitate competences and exclusive assets that allow firms to create competitive advantages (inside-out). Both perspectives have downsides: the inside-out strategy may lead to long-term, inflexible projects that cannot be adjusted to external changes, while the outside-in strategy may produce a collection of unrelated business skills with no potential for inter-department synergies. Table 1 summarizes the key points of the two business-level strategies. Meyer (2007) emphasizes that the alignment between resources and the market is the key to success, that is, there must be a good fit between the organization and the environment in which it operates. Thus, product strategists can successfully innovate when they acknowledge the tension between these conflicting perspectives and leverage both to iteratively develop new value propositions that represent a sustainable competitive advantage. Nevertheless, product strategists must also be alerted to the respective disadvantages of attempting to combine, or leverage, both strategies; otherwise, product development projects may become overly complex and prone to fail.
The Two Business-level Perspectives.

The Patient Table in the HOR
The HOR is a hospital environment where integrative thinkers can thrive. Hospitals worldwide are now exploring the hidden potential of hybrid suites, as they combine state-of-the-art imaging technology with the sterile environment required for surgical procedures. Therefore, there is an opportunity for integrative thinkers to improve the quality of care and optimize the cost-efficiency associated with these clinical facilities (Choi et al., 2019; Urbanowicz & Taylor, 2010). Furthermore, the HOR market is expected to grow at a compound annual growth rate (CAGR) of 12.5% and reach US$1.17 billion by 2022 (‘Markets and Markets, 2017), driven by increased adoption of minimally invasive surgical procedures and ongoing technological advancements. The HOR market is characterized by fierce competition among various angiography-based technologies manufactured by Philips Healthcare (The Netherlands), Siemens Healthineers (Germany), Canon Medical Systems (Japan), GE Healthcare (USA) and Shimadzu (Japan). Currently, HORs are mainly used as catheterization laboratories (or simply ‘cath labs’) and their main users are interventionalists such as neuroradiologists, interventional cardiologists and vascular surgeons who leverage the X-ray imaging systems to perform catheter-based treatments. These interventionalists treat patients who are eligible for endovascular interventions, such as individuals with coronary artery disease, structural heart disease, electrophysiological anomalies, cerebral arteriovenous malformation or brain or vascular aneurisms. Nevertheless, despite their multidisciplinary nature, few hybrid suites are used for applications other than cardiovascular interventions due to the limitations related to the geometry of the equipment, sterilization compliance, or a lack of specific features. For instance, current hybrid suites are not fully prepared to convert from endovascular treatment to open surgery in case of an emergency. Furthermore, unlike surgical tables, interventional tabletops limit the work of neurosurgeons and spine surgeons. Neurosurgeons may find it difficult to fix the patient's head without using accessories, while spine surgeons may struggle to place patients in the prone position. Thus, further improvement of HOR equipment is needed to enable hospitals to exploit the potential synergies across medical disciplines and improve patient care. Product managers can leverage the multipurpose potential of the HOR to identify the underlying needs of distinct clinical teams and shape integrative solutions that bring innovation to the HOR environment.
The patient table is the central piece of the hybrid suite, not only because the patients are positioned on it, but because the X-ray equipment used to guide treatment must rotate around the table. Most of the devices that support the patient (e.g., arm rests, head holders) are attached to the table. Thus, despite its interdependence on the other modules of the HOR, the patient table represents a key point of improvement for product managers attempting to optimize the clinical value of the hybrid suite.
By default, providers include their proprietary interventional table when installing hybrid suites in hospitals, and there are a few differences among the several tabletop offerings. The tabletop dimensions vary: some tables are wider and suitable for clinicians working with patients with a large chest width; some tables are longer allowing accessories to be placed on the extra space next to the patient's feet. The maximum load capacity also varies: some tables can support obese patients during cardiopulmonary resuscitation (CPR) manoeuvres; other tables have weight limitations for the accessories attached to the lateral rails. The option for tabletop movements is a key differentiating feature: some models are static and thus the imaging equipment must rotate around the table; others offer a multitude of options including free-float, tilt, cradle, pivot and swivel movements. However, most of the interventional tables are not compatible with surgical procedures due to their low resistance to liquid spillage; though some are IPX4-rated, which makes them suitable for surgical applications and is a strong competitive advantage. However, none of the interventional tables available in the market are fully compatible with the accessories commonly used during surgical procedures (e.g., head holders), and the tabletops cannot be bent, which limits the options for patient positioning. Depending on their business case, hospital management teams may prefer a surgical table to be installed instead. In such cases, HOR providers are responsible for integrating a third-party table to enable clinical teams to also use the HOR as a regular operating room. Providers typically partner with Getinge (Sweden) or Trumpf Medical (by Hill-Rom, USA) to ensure the installation of the hybrid suite with a surgical tabletop meets the hospitals’ needs. Such integrations not only require good coordination between the three parties involved but also add a couple of hundred thousand euros to the HOR investment. Besides cost, HOR integrations often limit image-guided treatment options because of the reduced movement of the surgical tabletop.
Designing a HOR currently requires hospitals to choose between two conflicting options: an interventional table fully integrated with the imaging options—or a costly and poorly integrated but surgery-compatible tabletop. How is one table option better than the other? How many clinical teams can use each? Which option translates into enhanced patient care?
An Integrative Resolution
Currently, the main providers of HOR solutions are continuously improving the features of their respective tabletops and, in parallel, working on smoothing the integration with third-party alternatives. Inside-out teams launch better interventional tables with increased load capacity, wider tilting ranges or new movement options. Outside-in teams strengthen their collaborations with partners to minimize the movement restrictions associated with the third-party integrations. Both strategies lead to feature-enhancing competition, rather than value-creating innovation. Do hospitals really want to choose between one of the two options? Is value created to healthcare systems when suppliers improve their offerings by mimicking the features of already-existing alternatives? At the same time, this unaddressed need represents an opportunity for integrative thinkers to synthesize the needs of interventionalists and surgeons and create a competitive market advantage.
Adopting an integrative approach to this patient table challenge requires acknowledging the conflict created between the two strategies: improving the features of interventional tabletops brings incremental value to the clinical teams, and reinforcing third-party integrations represents a large investment of resources and deviates from the core competences of HOR manufacturers. Accepting these opposing perspectives is the key to the identification of a superior solution to such a challenge. Following this exercise, manufacturers can list the features of current interventional models and focus on the features that are actually relevant to their group of users. For instance, the ability to free-float the tabletop can be considered a key characteristic and the suitability for performing CPR manoeuvres should be a non-negotiable feature. Second, manufacturers should focus on the needs of the user behind the choice of surgical tabletop. By doing so, they understand the market need for development of an IPX4-rated tabletop that is resistant to liquid spillage and easy to disinfect and sterilize. The option to fix head clamps without adaptors is also crucial to enable neurosurgeons to treat their patients in the HOR, and a two-joint breakable tabletop would enable spine surgeons to place their patients in the prone position. Integrative strategists are capable of incorporating the selected requirements of various surgical stakeholders during the development of a hybrid tabletop, without sacrificing the benefits of the proprietary interface connected to the imaging equipment. Furthermore, by focusing on value-creating solutions, integrative teams would unlock new business opportunities due to the cost savings related to expensive third-party integrations. Hospitals could further maximize their utilization of hybrid suites and, thus, reduce the respective fixed costs. The proposed integrative resolution aligns with the value-based transformation, as it addresses the needs of multiple clinical teams while creating an opportunity to improve patient care and decrease hospital costs. The value represented by this output is threefold: functional—it improves health outcomes and reduces costs; emotional—it facilitates the work of clinicians by addressing their current needs; social—it promotes the cooperation of a wide variety of clinical specialists that are normally used to working independently.
Despite the value of the proposed approach, the integrative method is subjected to process pitfalls (Table 2). First, if a strong emphasis is placed on improving the current features of existing solutions (inside-out), the result may add little value to clinical teams. To alert product development teams about such pitfalls, and we have named this the washing machine pitfall: no firm wants to develop a new washing machine with one more programme option than the former model if the majority of users will continue to use the standard programme. A second pitfall relates to survivorship bias (Syed, 2015) and describes the development of features that would be wrongly thought to answer the customer's needs. When exploring the needs of the market, it is wise to analyse how and to understand why users of competing solutions are satisfied. Otherwise, the development of HOR solutions is biased by the input from the company's already satisfied customers. This is exemplified by the fact that during the Second World War, the US military thought that the most-hit areas of aircrafts returning from war were the areas requiring reinforcement, instead of the respective less-hit parts—that more frequently led to critical failures on the planes that did not return (Syed, 2015). Third, strategists must avoid getting stuck in the middle, that is, developing solutions that are about as good as a Swiss army knife in the kitchen (Karp, 2014). This pitfall relates to attempting to address all of the needs of all the stakeholders, which not only unnecessarily increases the complexity of the task, but it may also output solutions that are not good enough for any stakeholder. Intermediate HOR solutions are more likely to generate dissatisfaction across clinical teams if, for instance, they partially address the needs of interventionalists and surgeons but still limit the patient treatment options, in the same way that a Swiss army knife is not used by chefs working in Michelin-starred restaurants to slice vegetables or by sommeliers at wine-tasting events to open vintage bottles of wine.
Recommendations and Conclusion
The Integrative Resolution and Respective Pitfalls.
Following an integrative and generative mindset, we provide three recommendations for VBHC-compatible HOR innovation:
Create a multidisciplinary team that advocates for the interests of all stakeholders. Explore synergies between interventionalists and surgeons that could enhance staff experience and patient care. Measure the added value (i.e., clinical outcomes in relation to the respective costs) of each technological innovation and publish related studies to promote transparency within the industry.
Instead of providing recommendations that either leverage key competences or exclusively answer to market needs, Martin's integrative approach attempts to leverage both the inside-out and outside-in strategies described by Meyer (2007) and generate an improved approach that betters each strategy. Furthermore, we observe that assuming an integrative mindset allows manufacturers of HOR equipment to answer the needs of both interventional and surgical teams, besides enhancing treatment capabilities and decreasing the associated fixed costs. In contrast, we observe that alternative conventional approaches, that is, those representing inside-out and outside-in perspectives, would lead to the development of inferior offerings that are less well-aligned with the value-based transformation of healthcare systems. In conclusion, we confirm that an integrative resolution of product management challenges can enable medical device manufacturers to join the value-based transformation of the healthcare sector. Unlike traditional strategies, the integrative approach allows multidisciplinary clinical teams to cooperate within the HOR, improving patient treatment by enabling new, complex therapies and reducing the fixed costs related to the installation of hybrid suites.
Nevertheless, product managers must be alert to the limitations and pitfalls related to the integrative mindset and the respective conventional alternatives. In order to not get stuck-in-the middle, development teams must avoid the temptation of answering multiple needs of multiple clinical teams; instead, they should carefully identify which needs must be solved first. Second, product development teams must be careful to not overdevelop product features that, despite creating technological innovation, bring little value to the clinical users and patients. Third, when attempting to incorporate customer feedback in the product design process, product managers should guarantee that the feedback is representative of the whole market, including users of proprietary and competitive solutions and potential new users; otherwise, product improvements will be always biased by already satisfied customers and the resulting development decisions will restrict the growth of adjacent business opportunities.
Overall, an integrative approach enables manufacturers to create meaningful innovation that aligns with the value-based transformation of healthcare systems. This approach also unlocks new business opportunities associated with the multidisciplinary inherent to the hybrid suites installed in hospitals. To sum up and answer our underlying research question, we advise product management teams to embrace an integrative process approach to create multi-stakeholder value within the complex HOR environment. Such methodology not only aligns with the VBHC transformation but also unlocks synergies among multiple clinical teams that may represent new business opportunities for the manufacturers of medical equipment.
Footnotes
Declaration of Conflicting Interests
Funding
The authors received no financial support for the research, authorship and/or publication of this article.
