Part 3 | Capital Sales: MedTech’s Business Model and Growth Problem

From "Installed Base" to "Adoption & Utilization"

If Parts 1 and 2 of this series explain why health systems cannot buy innovation, the next question is more uncomfortable. 

What happens when MedTech accepts that "installed base" is no longer the right success metric?

Installed base measures what was sold. It says nothing about whether technology is adopted, consistently used, or economically relevant in delivering value. In today’s environment, that distinction matters more than ever.

Adoption and utilization are where value is created or lost.

When technology is installed but rarely used, health systems risk seeing sunk cost, not transformation. When AI is deployed as a pilot but never scaled, evidence generation stalls and confidence erodes. When utilization lags, reimbursement enablement conversations never mature. Innovation quietly dies without ever being rejected outright.

This shift forces MedTech to confront something deeper than pricing. It requires a change in mindset across commercial, finance, and leadership teams and a shift in identity from "Vendor" to "Partner".

The traditional CapEx model rewards placement. Sales teams were optimized to close transactions. Finance teams were optimized around one time revenue recognition. Once the equipment is installed, success is largely assumed.

That model does not survive an environment where capital is constrained and value must be demonstrated continuously.

• Adoption and utilization based models demand different capabilities. Financial leaders must understand recurring revenue, utilization ramps, and forecasting under variability. They must also understand how cash actually flows through health systems, including payer mix, revenue cycles, and accounts receivable timing.
• Sales incentives must evolve as well. Compensation structures that reward one time placements reinforce the very behavior that is now failing. In contrast, models that reward retention, utilization growth, training adoption, and multi year value creation change how teams engage customers.

This is not a minor operational tweak. It is a talent and leadership shift.

Historically, the CapEx model does not require deep understanding of provider economics. That era is ending. MedTech leaders who are unwilling to evolve their financial and commercial thinking will find themselves optimizing a model that no longer scales.

"If you do not like change, you will like irrelevance even less." - Eric Shinseki 

In the final part of this series, I will look at what can actually work in practice and which commercial models are proving capable of aligning innovation with how care is paid for.