Presentación de Alejandra Guillén, directora de innovación de Medtronic sobre el rol de la industria en la innovación de los procesos sanitarios. Esta charla fue impartida durante el acto de presentacion del MCI Healthy Living el pasado 29 de septiembre en la FUndacion Bancaja en vaValencia

1. The role of the Industry in in
Healthcare Innovation
From Features to Solutions
Alejandra Guillén Innovating for life.
Solutions for Integrated Care Manager
Medtronic Ibérica

2. Innovating for life.
The Spanish
Environment

3. Spanish Health-Care Environment Innovating for life.
Spanish Healthcare System
A decentralized National Health System
The Spanish Healthcare system is 80% public
Spanish private market is very small
National Health Authorities: Health Ministry Competencies in Spanish Health Inspection
Policy, Price Regulation, Foreign affairs Policy.
‘Coordination’ role in areas such as Education
and Health (inspection, Minimum catalogue of
Health Services in all Spain NHS)
Hospitals Regions: Regional Health Authorities
Hospital Management Private
mostly composed of Hospitals HTAs: regionals 17 regions with high autonomy,
clinicians, sensible to & National specific legislations, 4 official
technology and services, Patient Advocacy
Non clinical & clinical languages, free autonomy in the
Groups
not just prices Scientific Societies regulation of taxes and financing
Private Insurances
extra services and management
autonomy

4. P
D
G
%
0
2
4
6
8
10
12
14
France 8.7 2.5 11.2
Switzerland 6.3 4.3 10.6
Austria 8.1 2.4 10.5
Germany 8.1 2.5 10.5
Belgium 7.4 2.8 10.2
Portugal 7.1 2.8 9.9
Denmark 8.2 1.5 9.7
Greece 5.8 3.8 9.7
Sweden 7.7 1.7 9.4
Iceland 7.6 1.5 9.1
Italy 7.0 2.1 9.1
Netherlands1 7.4 1.6 9.1
Spain 6.5 2.5 9.0
Ireland 6.7 2.0 8.7
United 7.2 1.5 8.7
Private
Norway 7.2 1.3 8.5
Finland 6.2 2.2 8.4
Total
Source: OECD Health Data 2010; Eurostat Statistics Database; WHO National Health Accounts.
EU 6.2 2.1 8.3
Healthcare Expenditure - Spain
Slovenia 6.0 2.3 8.3
Slovak 5.4 2.4 7.8
Hungary 5.2 2.1 7.3
Bulgaria 4.2 3.0 7.3
Luxembourg 6.5 0.7 7.2
Czech 5.9 1.2 7.1
Poland 5.1 1.9 7.0
Latvia (2007) 4.2 2.7 7.0
Lithuania 4.8 1.8 6.6
Total health expenditure as a share of GDP, 2008
Estonia 4.8 1.3 6.1
Turkey 4.1 1.9 6.0
Cyprus 2.4 3.2 5.7
Romania 4.5 1.0 5.5
Innovating for life.

5. Economic environment Spain Innovating for life.
Unemployment Rate (%) Unemployment Rate
19.8 19.1
18.0 17.4
11.3
9.2 8.5 8.3
2005 2006 2007 2008 2009 2010 est. 2011 est. 2012 est.
Source: OECD Expansión, Nov. 19, 2010
Déficit (% of GDP) Deficit
2.0 1.9
1.0
2005 2006 2007 2008 2009 2010 est. 2011 est. 2012 est.
M
-4.2
-4.4
-6.3
Source: OECD Expansión, Nov. 19, 2010
-9.2
-11.1
• Construction Sector crush
• Issues on Financial System (Cajas)
• National and Regional deficit
• Unemployment

6. Spanish National Health System Debt with
Suppliers Innovating for life.
Spanish National Health System Debt with Suppliers
Payment delay per region Payment Delay
(days)
Spanish National Health System Debt with Suppliers 700
611
648
636
600
524
473
Payment Delay Debt Total 500 464
(days) (%) (million €) 400
291
300 241
217
Andalucía 464 24.53% 846.285 200 145
174 163 191 206
Aragón 217 2.93% 101.085 100
96
61
86 67
Asturias 241 2.10% 72.450 0
Andalucía
Aragón
Asturias
Baleares
Canarias
Cantabria
C.La Mancha
C. y León
Cataluña
Extremadura
Galicia
La Rioja
Madrid
Murcia
Navarra
P. Vasco
C. Valenciana
Ceuta Y Melilla
Baleares 611 3.54% 122.130
Canarias 145 2.29% 79.005
Cantabria 648 2.82% 97.290 Spanish National Health System Debt with Suppliers
C.La Mancha 291 4.56% 157.320 Payment delay versus debt %
C. y León 524 11.36% 398.820 700 30.00%
Cataluña 174 4.89% 168.705 600 25.00%
Extremadura 163 1.60% 55.200 500
20.00%
Payment Delay
400
Galicia 96 2.18% 75.210 15.00% (days)
300
La Rioja 191 0.45% 15.525 10.00%
Debt
(%)
200
Madrid 206 10.64% 367.080 5.00%
100
Murcia 636 7.68% 264.960 0 0.00%
Navarra 61 0.35% 12.075
Andalucía
Aragón
Asturias
Baleares
Canarias
Cantabria
C.La Mancha
C. y León
Cataluña
Extremadura
Galicia
La Rioja
Madrid
Murcia
Navarra
P. Vasco
C. Valenciana
Ceuta Y Melilla
P. Vasco 86 1.62% 55.890
C. Valenciana 473 16.40% 565.800
Ceuta Y Melilla 67 0.07% 2.415
Spanish National Health System Debt with Suppliers
Debt (%) versus Budget Reduction (%)
Total debt 3,457.245
25.00% -14.00%
Data as of 30 Sept. 2010 -12.00%
20.00%
Source: Farmaindustria & Fenin -10.00%
-8.00%
15.00% Debt
-6.00%
(%)
-4.00%
10.00% % budget
-2.00% reduction
5.00% 0.00%
2.00%
0.00% 4.00%
Andalucía
Aragón
Asturias
Baleares
Canarias
Cantabria
C.La Mancha
C. y León
Cataluña
Extremadura
Galicia
La Rioja
Madrid
Murcia
Navarra
P. Vasco
C. Valenciana
Ceuta Y Melilla

7. Where is the money being spent today? Innovating for life.
(%, 2008) • Spending on medical devices
accounts for less than 5% of total
Device
5% 4% 4% 3% 3% 3% 3% 2% 2% 2% spending as healthcare spending in all the
a % of total countries analyzed
– Decreases in procurement
100 Med. devices prices for medical devices
Pharmaceuticals will have only a limited
impact on overall HC
80 expenditures
• Operational expenses comprise
a much higher proportion of
60 overall costs, reaching over
~80% of total spending.
Operating and
– A rel. small change in Op.
40 other costs costs will have a major
impact on total HC spending
20
Medical devices represent a small
0 portion of overall spend and offer
limited potential cost savings
Source: Espicom; WHO; World Bank, LEK analysis

8. Spanish Health-Care Environment
Challenges Innovating for life.
FY10-FY12:
Challengeable Scenario
due to the economical situation, a threat to the stability of the
Health Budgets and an impact to the Health Care System
 Financial crisis with reduction in Health expenditure.
 Increase pressure in activity reduction and price fall.
 Barriers for adopting innovative Health-Care Technologies.
 The NHS has to adapt itself to lack of resources: Focus on gaining
efficiency on clinical processes.
 Physicians more involved in financial decisions.

9. Challenges of the HCT industry in Spain
Innovating for life.
 Overcome economical and financial issues
• Resolve the healthcare debt problem
• Work in a finance model that avoids debt generation
 Improve Productivity in the Spanish NHS
 Need to drive innovation in Spain
• Only 1.26% of the 26,600 patents registered in 2009 in the
Spanish Patent Office were Spanish (Germany has 60,2%).
USA has 32 of 46 HCT industries with sales over 1 billion
dollars.
• Promote stakeholder collaboration and develop a frame
favorable to multinational companies investment
 Drive a rapid incorporation of high added value technologies
• Revise and improve innovation adoption process: Need for
Source: efficiency and value evaluation (HTA)

10. Innovating for life.
Innovation
Concepts

11. What is Innovation? Innovating for life.
Innovation is a Value Creation
Novelty
Solutions to
Unmet User Business
Processes
Experience Models
Clinical
Needs
12 | Medtronic Confidential

12. What is Innovation? Innovating for life.
Innovation is a Value Creation
Novelty
For the past three decades the medtech industry has
focused its efforts in providing new clinically
beneficial products adopted by the healthcare system.
Still, health care has been quite slow to innovate in
core processes, business models and customer
experience
13 | Medtronic Confidential

13. Why is innovation necessary? Innovating for life.
Innovation in a moment of
Environmental Challenges
1 New Socio-Economic Circumstances
– Aging populations and rise in chronic disease
– Budget Deficits
– Shortage of HC workers
– Patient demand driven by increased knowledge and less healthy
lifestyles
– Legacy priorities and financing structures unsuited to today’s
requirements
14 | Medtronic Confidential

14. Why is innovation necessary? Innovating for life.
Innovation in a moment of
Environmental Challenges
Information Imaging and
2
Technology Navigation
Systems
Technological Convergence
– Meeting unmet medical needs.
– Orient innovation towards cost-reducing or
affordable technologies.
– Facilitate equity in access to care for patients
– Personalization of treatments and medicine
Device
Technology Biologics
15 | Medtronic Confidential

15. Why is innovation necessary? Innovating for life.
Innovation in a moment of
Environmental Challenges
• From Features to Solutions
• From Silos to Systems
• From Volume to Value
The International Market pursues innovative solutions that can support an increase of
efficiency and sustainability of the Healthcare Systems
16 | Medtronic Confidential

16. Why is innovation necessary? Innovating for life.
How much Value does Innovation Bring??
MRI scan safe pacemaker Remote Patient Monitoring
GE’s Vscan®
iPhone Mobile Health Technologies
Solutions to User Business
Unmet Clinical Experience ModelsProcesses
Needs
17 | Medtronic Confidential
Christopher Wasden
PwC, Medical Technology Innovation Scorecard

17. Innovating for life.
Innovation and
Healthcare

18. European Initiatives to promote the Innovation
in Medical Technologies Innovating for life.
● Seventh Framework Program for R&D&I
EU: “Green Book”
● Framework program for Innovation and
Radical changes to promote growth Competitiveness
and employment through R&D&i. ● European Institute for Innovation and Technology
Two focus: ● Health, Environment ● Non Technological innovation (design and
a Quality of Life commercialization)
● Stimulate Public Purchasing of Innovative
● Renewable energies Technology (commitment with R&D&i)
Along all the “Innovation Chain” from Basic
Research to commercialization of innovative
products and services
FRANCE: French National Alliance for Life Sciences and Health
(Aviesan) groups together the main stakeholders of life and
health sciences in France
SPAIN: Alianza para la Investigación en Salud (Ministerio de Ciencia e
Innovación)
Plataforma Española de Innovación en Tecnología Sanitaria

19. Innovation Performance Innovating for life.
Spain
• Moderate innovator
• Innovation performance and rate of improvement below the EU27 average.
• Relative strengths, compared to the country’s average performance, are in Finance and
support and Economic effects.
• Relative weaknesses are in Firm investments and Linkages & entrepreneurship.
• Over the past 5 years, Finance and support and Firm investments have been the main
drivers of the improvement in innovation performance, in particular as a result from
strong growth in Private credit (12.2%) and Non-R&D innovation expenditures (13.4%).
• Performance in Human resources, Linkages & entrepreneurship and Innovators
worsened, due to a decrease in S&E and SSH doctorate graduates (-3.2%) and the
Firm renewal rate (-5.9%).
Source: European Innovation Scoreboard (EIS) 2009. PRO INNO Europe@ European Union 2010

20. The Innovation Chain Innovating for life.
Innovation Chain. Spain
business market
ideas financing entrepreneur
model adoption
Enabling ...
Good R&D groups
Business Angels
Creativity
Public Programs Good professionals Easy entrance
R&D in Hospitals Easy initial adoptiion
Risk Funds Innovation culture Pilot Culture
Preventing ...
Difficult growth
Lack of cohesion Cultural change
Rigid Organization
University away from Lack of Continuity Bureaucrcy
Lack of process re- Difficult gral adoption
Industry Enterprise Financing Education Sys
engineering
Focus on basic

21. For a Sustainable Healthcare Innovating for life.
The situation of Healthcare Systems in the actual
economical situation is critical.
As in any other sector in society, TECHNOLOGICAL
INNOVATION is the only possible means for a quality
improved Health care, accessible for everyone and
economically sustainable.

22. The impact of Innovation on
Health-Care cost Innovating for life.
 Innovation accounts for a large part of medical care costs and
expenditure over time (e.g. increased number of services, costly
products and procedures...)
 Cost-decreasing innovations leading to higher costs in the
aggregate (e.g. increasing indications, treatment expansion, life
extended effect)
 The system needs to learn how to handle innovation.
Innovation can be a determinant in the rise of Health-
Care costs…. But....
Innovation is a key factor for productivity improvement
Source: Eucomed Pammoli et al.’s report

23. The importance of Innovation in the
Health Care Sector Innovating for life.
Innovation is a key factor for productivity improvement
 For the Health Service, technological innovation can facilitate the
accessibility, quality and efficiency of healthcare, contributing to the
improvement of the population health.
(Social value)
 For the Hospital, technological innovation can allow a more efficient
use of the financial and human resources and a better management
of the demand pressure.
(Welfare value)
 For the country, these innovations can contribute to generate
industrial tissue and improve productivity and competitiveness.
(Economical value)

24. Innovating for life.
Is Spain a difficult market for introducing
Innovation on HC Technologies… ?
No… but…
• Low barriers for initial introduction
• Difficulties for getting funding attention to innovation
• Lack of complementary resources
• Great difficulties to adapt the previous processes of care
• In general the ratios of use of innovation are below the
European average

25. Innovating for life.
Innovation
Who, How?

26. Where is the money being spent today? Innovating for life.
The key for achieving meaningful
innovation is in the collaboration of
these stakeholders
Las tensiones dentro del sistema
sanitario hacen de éste un momento
clave para revisar los procesos y
mejorar la eficiencia del sistema y
las organizaciones sanitarias.
Nunca el interés de los distintos
stakeholders estuvo tan alineado.
La clave está en CONOCER el
problema para poder trabajar juntos
en una solución satisfactoria.

27. Opportunities Innovating for life.
Bottom UP  Deep knowledge of the
problem and the reality (processes)
Top Down  Deep implication of the
decision makers (business models)
Global vision & Engagement of all parts
 Organizations
30 | Medtronic Confidential

28. Opportunities Innovating for life.
Planes estratégicos
Redefinición de procesos
Revisión de las organizaciones
¿se pueden hacer las cosas de otra manera con la misma estructura?
Identificación de servicios y
herramientas
31 | Medtronic Confidential

29. Two dimensions Innovating for life.
Time & Convergence
Tools Needs
eHealth Business Models
mHealth EHR Process Efficiency
Conceptual Practical
Personal H. System Chronic diseases
Personal H. Record Sustainability
32 | Medtronic Confidential
EHR Quality of Care

30. Conclusions:
The importance of Innovation in the Health Care Sector Innovating for life.
Shared Interest
Shared Risks
33 | Medtronic Confidential

31. The role of the Industry in in
Healthcare Innovation
From Features to Solutions
Thanks for your attention!!!
alejandra.guillen@medtronic.com
Alejandra Guillén Innovating for life.
Solutions for Integrated Care Manager
Medtronic Ibérica