It seems to be common sense that innovation is one of the most intelligent ways to flee the price war in the rehab industry. In two weeks we all will see a lot of innovative products at Europe’s biggest rehab show in Duesseldorf. But is the common sense also proven truth? I doubt as far as Germany is concerned.
Firstly, innovation is a brought term. I will use a pragmatic approach and take “any new product “ as an innovation. This includes also products which are only renewed in order to keep the pricelevel by adding additional features. Not very innovative from a technical point of view, but thecompanies have invested R&D capacity in these products. The goal was show something new to protect/enlarge the profitability.

On the German market the most innovative company over the last 7 years is without any doubt Invacare if you count newly launched products per year. There is also no doubt that it was not the most successful company. The lowest level of innovation during the same period showed Sunrise. Among the big players in Germany it is certainly the one which protected its position best.
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Health Affairs Blog
Health Affairs has entered the blogosphere as a new means of engaging readers in the health policy debate

This The Red Hot Market for Medical Devices in China - SeekingAlpha is an excellent article from Evelyn Rubin which reviews the IPO filing by Mindray - a medical device manufacturer with a substantial China presence.

The filing contains a host of useful information on the Chinese medical products market.

Again Germany could be a sample how to deal with the complexities of the rehab market sucessfully. If you take the right decision on the trivial question: Who is my customer?

To identify your customer is one of the basics in marketing. You do a segmentation or you “enlarge your pond”, it is a daily execise.

In the rehab industry of Western Europe the definititon of the customer is always a little bit complicated. You have the patient who uses your product, a therapist, who advises the patient and in most of the countries a dealer who buys from you. In the end the bill is mostly paid by a public healthfund. In the Nordic countries the scenario is a little bit clearer as a public health supplier decides about the products and you do not have dealers. In England you find parallel markets public and private. In Germany, however, we find the whole range of complexity: patient, of course, therapists, dealers and public insurances as payors of the party. Therefore you will find a lot of different but not always consistent answers who the customer is.

As far as I can see there are not many companies with a clear customer definition on the German market. Some have decided but they do not act consistently.

Example: Kuschall has a clear patient oriented marketing but the high-price super-designed chairs shall be paid by the public (bankrupt) health insurance.

Let’s look to an example of a consistent decision about the customer: Lifestand, the French manufacturer of verticalization wheelchairs! They decided that without any compromise the patient is their customer. They get him directly in the clinic, they support him with samples at home and they offer a lawyer service which helps to get the approval from the public insurance if necessary by a lawsuit. This system is so perfect that sometimes the customer did not even know that the company has sent its lawyer to put pressure on the health insurance. Dealers get only a finder’s and application fee because Lifestand is not allowed to apply directly to the insurances. - This little disadvantage will disappear next year. - This consequently worked out strategy helped Lifestand to focus the salesforce in competence and approach very effectively.

Lifestand enjoys strong double digit growth, took over 50% of the market share (manually propelled chairs) of the former quasi monopolist Levo and kept the prices up.

Do you remember my first update? This story does not work in a one stop shopping environment. So how can companies with more than one product line do it? Best (not perfect) example is Sunrise (Sopur). But this is another story.

The EU has recently provided this excellent portal http://health.europa.eu to useful health data in Europe. Go past the front screen which appears to be consumer related and there is very useful information on all aspects of healthcare in the European Union which will help in business planning, marketing and investing decisions.