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Medtronic Acquires Telemedicine Systems Developer

Omar Ishrak

Omar Ishrak (Medtronic Inc.)

Medtronic Inc., a medical device company in Minneapolis, Minnesota, is buying Cardiocom, a developer of telemedicine systems in nearby Chanhassen, Minnesota, in an all-cash transaction valued at $200 million. Medtronic’s devices currently help treat cardiac and vascular diseases, diabetes, and neurological and musculoskeletal disorders.

Cardiocom, founded in 1999 and privately held, builds solutions for home monitoring and management of chronic diseases including heart failure, chronic obstructive pulmonary disease (COPD), asthma, diabetes, hypertension, and obesity. The company’s solutions also cover patient monitoring and management, and nurse station systems.

In a statement announcing the acquisition, Medtronic says adding Cardiocom’s systems will enable the company to extend its portfolio beyond implanted medical devices. Omar Ishrak, Medtronic’s chairman and CEO, specifically identified heart failure as the first target for integrating the two company’s technologies, focusing on diagnostics, therapies, and patient management.

Heart failure is a condition of particular concern to hospitals that are under increasing scrutiny from health authorities to reduce readmissions due to heart failure, as well as heart attack (acute myocardial infarction) and pneumonia. Under the Affordable Care Act, hospitals face penalties if their readmission rates for these conditions exceed allowable limits. Among the actions taken by hospitals to cut readmissions are better home and outpatient monitoring of patients.

Another innovation in health care delivery is the accountable care organization, a collection of health care providers who voluntarily coordinate their servces to avoid duplication and prevent medical errors, particularly for patients with chronic conditions. The Affordable Care Act authorizes accountable care organizations under Medicare, called the Shared Savings Program, as well as a pediatric accountable care organization demonstration project. Cardiocom says it is collaborating with numerous accountable care organizations to integrate the company’s telemedicine systems into clients’ health IT operations.

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