What Are Connected Medical Devices?

Connected medical devices are digitally-enabled healthcare technologies equipped with sensors that collect, transmit, and analyze real-time patient data. These devices can range from wearable monitors and implantable pumps to cloud-connected hospital equipment. When combined with AI and advanced analytics, they offer unprecedented insights into patient health, enhance diagnostics, and improve clinical decision-making.

At LSI Europe ’24, a panel of industry leaders explored how connected medical devices are reshaping healthcare and the challenges that come with integrating AI into this ecosystem. From real-time ICU monitoring to the data-driven future of personalized medicine, the panelists shared their perspectives on the innovations, regulatory hurdles, and business models defining this space.

The Power of Data: Why Now?

AI technologies in healthcare aren’t new, but the convergence of data capture, cloud computing, and advanced processing has made real-time insights more powerful than ever.

“We’re seeing a similar dynamic in medtech as we saw in high tech with Nvidia,” said Tal Wenderow, Venture Partner at Genesis Medtech Group. “It’s about data capture—getting a lot of data quickly—then processing and hosting that data at scale. The exciting part is putting it all together to generate meaningful insights.”

This shift is largely driven by the digitization of sensors. Devices that once functioned independently are now integrated into networks, allowing for continuous data collection and AI-powered analysis. Thom Rasche, Managing Partner at Earlybird Venture Capital, highlighted the significance of this transformation:

“To me, it’s out of the question that the granularity you can get with AI analysis leads to better outcomes. A physician would never be able to detect patterns at the level AI can in radiology or real-time monitoring.”

Connected Medical Devices in Action: The Impella Heart Pump

One of the most compelling examples of connected medical devices is Abiomed’s Impella heart pump, a smart implant that supports heart function in critically ill patients.

“This pump can now sit in patients for months,” explained Noam Josephy. “Patients can walk around with it, like using a crutch for a muscle injury. But the next challenge is: what do we do with all the information it generates?”

To address this, Abiomed has equipped the Impella with sensors that stream data to Impella Connect, a cloud-based system that enables real-time monitoring across 1,500 hospitals.

“We started this during COVID when hospitals needed remote monitoring,” Josephy said. “Before COVID, we had 50 accounts online; after, we had 1,000. Hospitals needed support, so they quickly adopted our cloud-based solution.”

But who owns and controls this data?

The Challenges of Data Ownership and Privacy

While hospitals and manufacturers are eager to leverage AI-driven insights, the ownership of patient data remains a contentious issue.

“In the United States, it varies by hospital,” Josephy noted. “There are as many opinions on this as there are hospitals.”

Tal Wenderow echoed these concerns:

“Who owns the data? The patient? The hospital? The company? Officially, it’s the patient, but hospitals hold the data. It’s our responsibility as an industry to protect that trust. One breach can destroy confidence and set the whole industry back.”

This issue extends beyond ownership to regulatory oversight. The FDA’s recent joint statement on AI-driven technologies signals increasing scrutiny over how connected devices handle sensitive patient data.

“There’s not too much regulation—yet,” Wenderow said. “The challenge is interpretation. Startups read it one way, and big companies read it another. The key is being honest about balancing innovation and patient safety.”

Who Pays? The Business Model for Connected Devices

For hospitals, device manufacturers, and startups, one of the biggest questions remains reimbursement. Who funds the infrastructure required to integrate connected medical devices into clinical workflows?

“We’re fortunate,” Josephy said. “With Impella, we’re treating the sickest patients—one in two statistically may not survive. Better outcomes drive better business. We can directly show hospitals the impact our technology has on survival rates.”

However, for AI-driven software solutions, proving value is more complex.

“Startups don’t have the luxury of waiting for strategics to come and partner,” Wenderow cautioned. “They often face ‘death by pilot’—where an exciting deal with a payer or hospital turns into months of testing with inconclusive results.”

For venture capitalists like Thom Rasche, the priority is clear:

“Outcome, outcome, outcome. Show me the impact. Is it improving clinical outcomes? Is it reducing complications? If you can’t demonstrate that, it’s just another software tool with no clear business model.”

The Future of AI and Connected Medical Devices

The panelists agreed: AI-driven connected medical devices aren’t a question of ‘if’ but ‘when.’

“It’s like going from manual to automatic transmission or BlackBerry to iPhone,” Wenderow said. “It’s inevitable. The challenge is making it seamless, trustworthy, and valuable for clinicians and patients alike.”

Josephy emphasized the need for focused solutions rather than broad, unstructured AI applications:

“We live in a data-rich, insight-poor world. The key is not just capturing data but making it actionable—helping clinicians make better decisions, standardizing care, and ultimately improving outcomes.”

For startups and strategics alike, medtech partnerships will be essential. AI and sensor technologies need hardware integration, while device manufacturers need AI expertise.

“This is a huge opportunity for patients,” Rasche concluded. “But startups need to define clear boundaries in which they operate—what problem are you solving, and how?”

Conclusion: The Connected Future of Healthcare

The rise of connected medical devices marks a new era in healthcare, one where data-driven insights, AI-powered analytics, and real-time patient monitoring create opportunities for better outcomes, more efficient care, and personalized treatment approaches.

While challenges around data privacy, regulation, and reimbursement remain, one thing is clear: AI and connectivity will redefine medtech. The companies that can harness these technologies responsibly—and prove their clinical impact—will be the ones leading the future of healthcare innovation.

Want to hear more insights like this? Join us for our next medtech conference in Singapore from June 10th through 13th.