I’m fascinated by organisations. In particular, I’m in intrigued by the way some organisations succeed at their chosen task whilst others fail. There are, of course, lots of explanations for what separates “the wheat from the chaff”, as we English say. Some academics say it is the firms’ capabilities and resources, others their culture, still others put it down to leadership. But all of these are what one might call “static” explanations. They might explain why an organisation succeeds for a short time but they don’t explain why some organisations succeed over decades, despite rapidly changing conditions in their operating environment.
If you seek a longer-term explanation of why some organisations maintain their efficacy, I’d strongly recommend “The Competent Organisation” a book by two British academics (1). In it, they point to the importance of organisational learning, the ability to absorb and apply new knowledge and capabilities. Without this ability, they argue, any organisation is almost guaranteed to be left behind by the changes going on around it. And if you seek to know more about how organisations learn, then I’d recommend another book (2), The Displacement of Concepts by Donald Schön, an American academic who is generally agreed to be the founding father of the topic. Schön argues that organisations learn mostly by picking up ideas from outside and adapting them to their situation. Even when organisations think they’ve invented ideas for themselves, the roots of their new knowledge lie in the ideas transplanted from elsewhere.
So, how is this relevant to the medical technology industry? Well, our future is tightly bound up with how one group of organisations, the HTA bodies in their various guises, learns to deal with its rapidly changing environment. They are being asked to assess the comparative value of medical technologies when those technologies are developing at a dizzying pace and the political, social and economic environment for healthcare is also struggling to keep up. Just as Schön predicted, they are trying to learn by picking up concepts from another area, in this case HTA in pharmaceuticals.
This is an understandable response. There are obvious commonalities between the two areas. But unless the medtech HTA authorities pay close attention to Schön’s ideas, they could make a big mistake. You see, the more fundamental lesson of Schön’s work was that picking up the ideas is the easy bit. More difficult is the task of adapting the ideas to the new context. In Schön’s view, the key to doing this was to understand, deeply and clearly, the differences between the old and new contexts, as well as the similarities. Only by allowing for these differences can the value of the concepts be transferred effectively from one context to another.
The problem with displacing concepts is that it is easy to copy ideas without really understanding the differences in context and, as a result, to apply an idea that doesn’t really work. The most recent Research Brief from the European Health Technology Institute for Socio-Economic Research (EHTI) discusses this problem in some detail, pointing to the critical differences between pharma and medtech HTA that mean you can’t simply transfer the former to the latter.
This is of more than mere academic interest. If medtech HTA authorities copy blindly from pharma and develop methodologies that are weak or invalid, it will have huge impact on healthcare systems and the industry. At best, it would result in wasting money on technologies that had no real health economic benefit. At worst, it would mean denying access to cost-effective technologies, costing lives and money. Some of the HTA methods currently applied to medical technology make just this mistake by adhering unthinkingly to the idea of randomised, double blind controlled trials in situations where this is just not appropriate.
The problem the industry faces is that to avoid this “copy pharma” mistake is not straightforward, for perhaps three reasons. Firstly, there is no single, straightforward way that medical technologies should be assessed; the sector is too varied and complex for that and a whole series of new, rigorous methodologies are needed. Secondly, HTA authorities on their own are often poorly equipped to develop these new approaches. They lack the time, resources and in some cases the expertise. Realistically, only a co-operation between the HTA authorities and medical technology companies together with other stakeholders can develop the new armoury of valid assessment methods, just as happened, historically, in the pharma sector. The third challenge is perhaps the most difficult to solve. The co-operation needed to develop the new approaches requires a level of trust, mutual respect and shared goals that is, some may argue, not present in the industry today. Some might say that relationship between the industry and the authorities is “functional” but fewer, I would argue, would use words like mutual or trusting.
So what’s to be done? Well we should start by making clear the differences between the two sectors and the dangers of blind copying. This conversation, which needs the support of Eucomed and the association’s leading companies, needs to be constructive and supported by the sort of research EHTI is doing. Once the principal is well accepted that medtech is very different from pharma, the authorities and the industry can pool their knowledge to develop new methods, almost certainly with the help of academics. But to do this well, both “sides” of the divide will need to subsume their own short term interests for the benefit of healthcare and society overall. That won’t be easy, but that’s how organisations –both commercial and otherwise – learn. And learning is how we survive in a changing world.
– Brian Smith Adjunct Professor at SDA Bocconi
(1) Hodgkinson GP, Sparrow PR. The Competent Organisation. 1st ed. Open University Press; 2002.
(2) Schön DA. The Displacement of Concepts. Tavistock; 1963.