by Tom Hughes, Health Economics and Reimbursement Senior Principal Advisor
Until recently the main focus for medical device companies was earning regulatory clearance for new technologies. How times have changed. While FDA input and approval is still important for market entry, reimbursement is now a top concern for medical device CEO’s, their investors, and other stakeholders.
The Growing Case for Reimbursement
Continued increases in the cost of healthcare are driving stakeholder interest in reimbursement. Investors want to know up front whether there is coverage, coding, and payment before they risk investing in new technologies. Payers increasingly expect new technologies to demonstrate better outcomes at equal or lower costs before they pay for them. More hospitals are establishing value analysis committees to evaluate all new products prior to entering a hospital or clinic setting. Physicians are interested in products that help them meet quality metrics imposed by government and private payers. And perhaps, most importantly, patients are becoming more educated and prefer interventions that improve quality of life at the lowest cost possible.
Conduct an Assessment. Gather Evidence. Collect Data.
Given the increasingly cost-conscious environment, what do medical technology companies need to know about reimbursement when developing new technology? Following are key recommendations:
- Most importantly, conduct a reimbursement assessment for new technologies as early the product design/development phase as possible. An assessment is a snapshot of the current coding, coverage and payment landscape for a particular product. It tells innovators what reimbursement challenges and opportunities exist for adoption of their product.
- Use the reimbursement assessment to develop an effective reimbursement strategy and implementation time line. Strategies will vary depending on assessment findings but may include implementation of new coding initiatives or efforts to maximize coverage and payment with payers.
- Develop evidence showing why the new technology creates clinical and economic value for stakeholders. All payers will require clinical evidence about how well the new course of action (devices, procedures, etc.) works compared to the current standard of care. Also, cost effectiveness is becoming increasingly important to payers and other stakeholders who want to know how much the new course of action costs compared to standard practice.
- Companies who are planning regulatory studies should seriously consider how to incorporate health economic endpoints into their study design considerations during FDA protocol development. Gathering health economic data early during regulatory trials not only avoids costly post-approval health economic studies, but can also be persuasive to payers and other providers who will ultimately make the final decision about new product adoption.
Reimbursement is a major focus for healthcare stakeholders in today’s cost-conscious healthcare environment. Companies that understand the reimbursement pathway for their new technology and can add real value compared to existing alternative therapies will be positioned to succeed in this changing marketplace.
To learn more and to connect with an RCRI reimbursement expert on your medical device, please contact Samantha Thrun at email@example.com or 952-224-2260.