The introduction of value-based healthcare is a key solution to ensuring the sustainability of health systems, according to Hooman Hakami, the global head of Medtronic's diabetes business.
Mr Hakami spoke to HealthDispatch during a recent trip to Australia. He said the company's support for value-based healthcare reflects its belief in the need to "realign incentives" to reward outcomes rather than services.
"For companies like Medtronic, this has broad implications, but if you take a look at the cost of healthcare, as a percentage of GDP, it is like a runaway train.
"The last 50 years have seen the emergence of all sorts of technologies for diabetes - no shortage of innovation - but it has not done a thing to stop the growth in the number of people living with it.
"If all we do is just in inject technology into the system, and that system continues to see costs rise while outcomes deteriorate, it will just commoditise that technology because it is not doing what it should be doing.
"There is actually a real need, from a pure business perspective, to move away from fee for service to outcomes."
Mr Hakami said the practical application of value-based healthcare is "incredibly challenging" and "requires a different conversation between payers, physicians and providers."
"It will take time and we need realistic time horizons for how the needle will move. Globally, our policy discussions are around getting agreement on language, such as what an outcomes model looks like, and you have to be methodical about that.
"It is really about trying to find the right set of individuals and stakeholders who are already there and accept the benefits of an outcomes-based model.
"In practical terms, if we have solutions for patients living with diabetes that have fewer injections, both they and their physician will be delighted."
He said the future of innovation in diabetes from a medical technology perspective with the emergence of sensing technology, data aggregation around individual patients, and biotechnology like stem cells.
"For Medtronic, from a business perspective, it means building different capabilities. We have to build muscle around technology, data science and algorithms. We have not had that in the past but of course that all means nothing if it does not deliver positive outcomes for patients."