Medical Device Industry’s 9 Most Critical Metrics (2024)

The Medical Device Industry’s
9 Most Critical Metrics

Medical Device Industry’s 9 Most Critical Metrics (1)

In this article you’ll learn the most critical metrics that companies in the Medical Device Industry should track.

The article does not include metrics such as Profits and Sales that are critical to companies in all industries; rather the focus is on metrics more specific to the Medical Device Industry.

By tracking your metrics, you will dramatically improve your business results.

Why? Because not only is the old saying “If you can’t measure it, you can’t improve it” true, but visibility into your metrics allows you to identify WHERE you can make the easiest and most impactful improvements.

For each metric, we will answer the following questions:

– What is the metric?

– What is the average value of this metric?

– Why is this metric important?

Let’s get started…

1.Adverse Events

What is this metric?
This metric measures the number of medical device failures that result in an individual ending up in the hospital, becoming disabled, sustaining life threatening injuries, or possible death.

Medical Device Industry’s 9 Most Critical Metrics (2)

Average Value
According to a recent report published by PriceWaterhouse Coopers, the number of patient injuries due to faulty medical device products was 28,049 – a four-fold increase over a 10-year period. The majority of the injuries resulted in hospitalization of the patient.

Why is this metric important?
This metric is important because it can point to a quality issue an organization may be having with a specific medical product that is unsafe for medical use. Adverse events can lead to bad press for a company, product recalls, lost sales and lost customers.

Do You Know & Track the Right Metrics?
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2.Inventory Turnover

What is this metric?
This metric measures the amount of a company’s product that is sold in a given time period.

Medical Device Industry’s 9 Most Critical Metrics (3)

Average Value
The inventory turnover ratio within the medical equipment and supplies industry, according to CSIMarket.com, averages 10.9.

Why is this metric important?
Inventory turnover is important because it relays how fast or slow a medical device company takes to sell its products. The metric can be used to compare a medical device company’s inventory turnover to competitor’s inventory turnover as well as the industry average.

3.On-time delivery

What is this metric?
On-time delivery measures if a product has been delivered to a customer within a time period of a preferred delivery date. It is calculated as orders delivered on time divided by total orders received.

Medical Device Industry’s 9 Most Critical Metrics (4)

Why is this metric important?
The metric is important because it can demonstrate if a medical device company is delivering products to a client on time to meet their supply requirements.

Do You Know & Track the Right Metrics?
Are Your Sales and Profits Increasing Because of This?

If not, read the special offer below:

Growthink, Guiding Metrics’ parent company, helps companies increase sales and profits
by identifying and rapidly improving the key processes and metrics that determine business results.

Click here to receive a complimentary consultation with one of our experts

4.Days of Inventory On Hand

What is this metric?
This metric indicates the average number of days a medical device company may have inventory in stock before it is sold to a client.

Medical Device Industry’s 9 Most Critical Metrics (5)

Average Value
According to Supply Chain Insights, the days of inventory on hand may range from 119 to 293 among top players within the medical device industry

Why is this metric important?
Days of inventory on-hand is important because it demonstrates whether a medical device company has a handle on the proper amount of products to have on-hand if a client or clients have an immediate or increased need for a medical product that may need to be supplied rather quickly.

5.Percentage of product in compliance

What is this metric?
This metric measures the percentage of products in a company’s portfolio that are compliant with regulatory requirements set by the government including requirements such as establishment registration, medical device listing, premarket notification, investigational device exemption for clinical studies, quality system regulation, labeling requirements and medical device reporting.

Medical Device Industry’s 9 Most Critical Metrics (6)

Why is this metric important?
This metric is important because it helps companies and their products stay in compliance with government regulations and in turn helps companies produce safe products for the general population. When companies do not comply with set regulations, the government will intervene to enforce the regulations set by the FDA.

6.Cost of Goods Sold

What is this metric?
This metric measures the total costs it takes for a medical device company to manufacture its products, including labor, material costs, rental and utility costs.

Medical Device Industry’s 9 Most Critical Metrics (7)
Average Value
According to a McKinsey & Company report, the average cost of goods sold for the medical device industry is 41% of total industry revenue.

Why is this metric important?
Cost of Goods Sold is an important metric because the lower the percentage of total revenue it takes to produce a product, the more the company makes in profit.

7.Operating Margin

What is this metric?
This metric provides data on the how much revenue a medical device company has after operating costs are paid including wages, material and equipment purchases, rent, and marketing.

Medical Device Industry’s 9 Most Critical Metrics (8)

Average Value
The operating margin for companies in the medical equipment and supplies industry averages 2.87%, according to data from CSImarket.com. This represents a YoY decrease of over 1 percentage point, when the average operating margin was 3.88%.

Why is this metric important?
A strong operating margin is important to medical device companies because they must be able to pay for fixed costs such as interest on debt. This metric also provides analysts with data on how much an organization within the medical device industry makes on each dollar of sales they bring in.

Do You Know & Track the Right Metrics?
Are Your Sales and Profits Increasing Because of This?

If not, read the special offer below:

Growthink, Guiding Metrics’ parent company, helps companies increase sales and profits
by identifying and rapidly improving the key processes and metrics that determine business results.

Click here to receive a complimentary consultation with one of our experts

8. Gross Profit

What is this metric?
This metric is based on a medical device company’s revenue less the direct costs of producing its medical devices divided by the company’s revenue and indicates the percent of sales the company makes after paying for costs to make the medical device.

Medical Device Industry’s 9 Most Critical Metrics (9)

Average Value
The gross profit margin for the medical equipment and supplies industry averages 12.1%, according to data from CSImarket.com.

Why is this metric important?
This metric is important because it specifies the amount of money a company is able to invest in other aspects of the organization including research and development for new products as well as marketing.

9.Sales to Fixed Assets Ratio

What is this metric?
This metric is a ratio that measures asset utilization to help a company recognize the need for additional property, plant and/or equipment to help increase its revenue. The ratio is calculated by taking net sales and dividing that by fixed assets.

Medical Device Industry’s 9 Most Critical Metrics (10)

Average Value
According to a Fulcrum study, the Sales to Fixed Assets ratio for medical device manufacturers has increased from 8.8 to 12.4 over the 5 year review period.

Why is this metric important?
The metric is important because it helps investors understand how a company operating in the medical device industry utilizes its assets.

Do You Know & Track the Right Metrics?
Are Your Sales and Profits Increasing Because of This?

If not, read the special offer below:

Growthink, Guiding Metrics’ parent company, helps companies increase sales and profits
by identifying and rapidly improving the key processes and metrics that determine business results.

Click here to receive a complimentary consultation with one of our experts

Medical Device Industry’s 9 Most Critical Metrics (2024)

FAQs

What are critical medical devices examples? ›

Examples of critical medical devices include surgical forceps, scalpels, implants, biopsy instruments and urinary catheters. Critical devices require cleaning followed by sterilization.

What are the top 3 challenges that underline the medical device industry? ›

What are the top medical device industry challenges?
  • Ongoing supply chain issues. Supply chain problems that began during the pandemic will persist, with some analysts saying certain shortages could continue into 2023. ...
  • More regulatory changes. ...
  • Demand for faster product development.
Mar 28, 2022

What is a critical medical device? ›

A critical medical device is a device that penetrates the skin or mucous membranes, has contact with blood and or body fluids, or enters normally sterile cavities and therefore presents a high risk of infection if the medical device is contaminated with any organisms, including bacterial spores.

What is the difference between critical and semi-critical medical devices? ›

Critical devices, such as surgical forceps, come in contact with blood or normally sterile tissue. Semi-critical devices, such as endoscopes, come in contact with mucus membranes. Non-critical devices, such as stethoscopes, come in contact with unbroken skin.

What is a critical item list examples of critical items? ›

Critical Items: Critical items are those that come in contact with sterile body cavities. Common examples include surgical instruments, needles, syringes, and surgical implants. These items require sterilization.

What is CMS definition of critical equipment? ›

Critical equipment is defined as equipment such as life-support devices, key resuscitation devices, critical monitoring devices, equipment used for radiologic imaging and any devices whose failure could result in serious injury or death to patients or staff.

What are the 4 major digital challenges in the healthcare industry? ›

So, what are the challenges many healthcare systems still face when taking on a digital health strategy? They include interoperability, cybersecurity, privacy and challenging misinformation.

What are the 4 biggest challenges facing the healthcare sector? ›

Major Challenges Facing the Healthcare Industry Today
  • Cybersecurity Threats.
  • Telehealth Implementation.
  • Invoicing and Payments.
  • Price Transparency Mandate.
  • IT Healthcare Investments.
  • Patient Experience.
  • Effective Payment Models.
  • Healthcare Staffing Shortages.
May 24, 2022

What is the most concerning issue facing the medical industry today? ›

1. The High Cost of Health Care. The problem: Perhaps the most pressing issue in health care currently is the high cost of care. More than 45% of American adults say it's difficult to afford health care, according to a survey by the Kaiser Family Foundation, and more than 40% have medical debt.

What is the difference between critical and non-critical instruments? ›

Critical instruments penetrate soft tissue or bone (i.e. scalpels, scalers, and burs). Semi-critical instruments contact oral tissue without penetration (i.e. dental mouth mirrors and dental impression trays). Non-critical instruments contact intact skin.

What are critical semi critical and non-critical items? ›

The method of disinfection and sterilization depends on the intended use of the medical device: critical items (those that contact sterile tissue) must be sterilized prior to use; semicritical items (those that contact mucous membranes or nonintact skin) must undergo high-level disinfection; and noncritical items ( ...

What are high risk medical devices? ›

Class III Devices (High Risk)

They are also considered to be at the highest risk and therefore require more stringent regulatory controls to provide assurance of their effectiveness and safety. Examples: implantable pacemakers, balloon catheters, and breast implants.

Is an implant considered a critical device? ›

Medical devices that have contact with sterile body tissues or fluids are considered critical items. These items should be sterile when used because any microbial contamination could result in disease transmission. Such items include surgical instruments, biopsy forceps, and implanted medical devices.

What are the critical components? ›

Critical Components means a component or system of components that, due to their importance in the continued proper operation of the device, have been designated by the manufacturer as requiring special fabrication, maintenance, inspection or operation.

What are the three classifications of medical devices? ›

There are 3 classes of medical devices:
  • Class I devices are low-risk devices. Examples include bandages, handheld surgical instruments, and nonelectric wheelchairs.
  • Class II devices are intermediate-risk devices. ...
  • Class III devices are high-risk devices that are very important to health or sustaining life.

What instruments are critical items? ›

Critical items are items considered to be at high risk for infections. They penetrate the soft tissue, bone, or contact the blood stream. Therefore, curettes, needles, scalpels, surgical burs are critical items. Because these instruments have penetrated the soft tissues, they require heat sterilization.

What are the 3 levels of disinfection? ›

Disinfection
  • High-level (semicritical items; [except dental] will come in contact with mucous membrane or nonintact skin)
  • Intermediate-level (some semicritical items1 and noncritical items)
  • Low-level (noncritical items; will come in contact with intact skin)

What are examples of non critical items? ›

Examples of noncritical items are patient beds, blood pressure cuffs, stethoscopes, and skin electrodes.

What is the four core requirements of CMS? ›

Four Core Elements of Emergency Preparedness

Care-related emergencies. Equipment and Power failures. Interruption in Communications, including cyber attacks. Loss of all/portion of facility.

What are the five clinical quality measures used by CMS? ›

CMS' eCQMs measure many aspects of patient care, including:
  • Patient and Family Engagement.
  • Patient Safety.
  • Care Coordination.
  • Population/Public Health.
  • Efficient Use of Healthcare Resources.
  • Clinical Process/Effectiveness.
Sep 16, 2022

What are the 6 barriers to healthcare? ›

Top Challenges Impacting Patient Access to Healthcare
  • Limited appointment availability, office hours.
  • Geographic, clinician shortage issues.
  • Transportation barriers.
  • Limited education about care sites.
  • Social determinants of health barriers.
Feb 22, 2022

What are the three biggest data challenges in healthcare today? ›

There are three parts to healthcare's data problem: access, processing, and insights.
  • Access. Medical professionals don't have access to the patient data they need at the time of treatment because it's too difficult to access. ...
  • Processing. It's expensive and time consuming to manually process unstructured data. ...
  • Insights.

What is the major challenge in healthcare industry? ›

Pressure on Pharmaceutical Prices

An increase in prescription prices has led to the slow growth of prescription spending. The rise in pharmacy prescription prices is one of the major healthcare challenges for both healthcare enterprise and patients.

What is the biggest barrier to healthcare? ›

Five key barriers to healthcare access in the United States
  1. Insufficient insurance coverage. A lack of insurance often contributes to a lack of healthcare. ...
  2. Healthcare staffing shortages. ...
  3. Stigma and bias among the medical community. ...
  4. Transportation and work-related barriers. ...
  5. Patient language barriers.
Jul 27, 2022

What is the most critical health issue in the US right now? ›

Heart disease and stroke still the leading causes of death for both U.S. men and women. NIH-funded scientists currently are looking to the power of precision medicine to better understand and manage these disorders.

What are the top 5 ethical issues in healthcare? ›

5 Ethical Issues in Healthcare
  • Do-Not-Resuscitate Orders. ...
  • Doctor and Patient Confidentiality. ...
  • Malpractice and Negligence. ...
  • Access to Care. ...
  • Physician-Assisted Suicide.

What is one current industry trend in healthcare? ›

1. Big Data. The big data market is projected to reach $273.4 billion in 2026 from $162.6 billion in 2021, making it one of the most significant tech trends in the healthcare industry. Big data in healthcare has some distinct contributions, enabling value-based and patient-centric care.

What is considered non-critical? ›

Noncritical items are those that come in contact with intact skin but not mucous membranes.

Can non-critical activities become critical? ›

Due to variation in time duration of the project activities, if some activities take more or less time than their expected time, this may render some of the non-critical activities as critical and vice versa. Hence a non-critical path may become a critical path or alternatively a critical path may become non-critical.

What are non-critical instruments? ›

Non‐critical. A medical device that only comes into contact with intact skin but not mucous membranes. Clean as necessary with detergent solution. If further treatment is necessary, disinfect with compatible low level or intermediate level instrument grade disinfectant after cleaning.

Do instruments need to be dry before autoclaving? ›

Dry Your Instruments

Prior to sterilization in an autoclave, it's critical to dry your instruments thoroughly. As infection control expert John A. Molinari writes in the February 2016 issue of Dental Economics, sterilizers will only remove the amount of moisture they introduce onto your instruments.

What are the 4 methods of sterilization? ›

It can be achieved by high-pressure steam (autoclave), dry heat (oven), chemical sterilants (glutaraldehydes or formaldehyde solutions) or physical agents (radiation). Because sterilization is a process, not a single event, all components must be carried out correctly for sterilization to occur.

What are the 5 methods of sterilization? ›

  • Steam Sterilization.
  • Flash Sterilization.
  • Low-Temperature Sterilization Technologies.
  • Ethylene Oxide “Gas” Sterilization.
  • Hydrogen Peroxide Gas Plasma.
  • Peracetic Acid Sterilization.
  • Microbicidal Activity of Low-Temperature Sterilization Technologies.
  • Bioburden of Surgical Devices.

What is Class I II and III medical devices? ›

Class I: A medical device with low to moderate risk that requires general controls. Class II: A medical device with a moderate to high risk that requires special controls. Class III: A medical device with high risk that requires premarket approval.

What is basic safety in medical device? ›

Basic safety of a medical device is defined (60601-1) as: “Freedom from unacceptable risk directly caused by physical hazards when medical electronic equipment is used under normal condition and single fault condition.” In this context we are referring to physical hazards.

Which class of medical devices has the highest level of risk associated? ›

Classification of Medical Devices

Class I devices generally pose the lowest risk to the patient and/or user and Class III devices pose the highest risk.

What equipment is categorized as a critical item? ›

Critical items.

This category includes surgical instruments, cardiac and urinary catheters, implants, and ultrasound probes used in sterile body cavities. The items in this category should be purchased as sterile or should be sterilized by steam sterilization, if possible.

What are examples of non-critical medical devices? ›

Examples of high-touch non-critical items include non-invasive devices used to touch patients (eg, stethoscopes), items frequently touched by healthcare workers and patients (eg, poles for intravenous devices), and items shared between patients.

What are non critical equipments? ›

Noncritical items are those that come in contact with intact skin but not mucous membranes.

What are non critical instruments? ›

Non‐critical. A medical device that only comes into contact with intact skin but not mucous membranes. Clean as necessary with detergent solution. If further treatment is necessary, disinfect with compatible low level or intermediate level instrument grade disinfectant after cleaning.

What is a Type 3 medical device? ›

Class III – These devices usually sustain or support life, are implanted, or present potential unreasonable risk of illness or injury. Examples of Class III devices include implantable pacemakers and breast implants. 10% of medical devices fall under this category.

How many types of medical devices are there? ›

single use devices (i.e. syringes, catheters) implantable (i.e. hip prothesis, pacemakers) imaging (i.e. ultrasound and CT scanners) medical equipment (i.e. anesthesia machines, patient monitors, hemodialysis machines)

What are Class 2 medical devices examples? ›

Examples of Class II Medical Devices:

Blood Pressure Cuffs. Pregnancy Test Kits. Syringes. Blood Transfusion Kits.

What is an example of a non-critical object? ›

Examples of noncritical items are patient beds, blood pressure cuffs, stethoscopes, and skin electrodes.

What is the difference between critical and important? ›

Important is a value judgment. Urgent is a timing judgment. A situation where judgment is needed to effect the situation positively is critical.

What are the 3 categories of medical instruments? ›

There are 3 classes of medical devices:
  • Class I devices are low-risk devices. Examples include bandages, handheld surgical instruments, and nonelectric wheelchairs.
  • Class II devices are intermediate-risk devices. ...
  • Class III devices are high-risk devices that are very important to health or sustaining life.

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