By Sabriya Rice
Posted: October 8, 2014 - 3:15 pm ET
Tags: Costs, Medical Devices, Medical Technology, Quality
“Prove it.” That was the resounding message to medical-device manufacturers during the annual
Advanced Medical Technology Association
conference in Chicago this week. Innovation is needed to advance medicine and
better patients' quality of life, but gone are the days of sticking higher price tags on
products that only provide incremental improvements, the leaders of health
insurance companies, health systems, quality improvement and consumer
organizations told the industry.
“We don't want to squelch innovation,” said Dr.
Scott Josephs, national medical officer for the health insurance provider Cigna Corp. “But tell me what I'm getting for
my healthcare costs. Show me that these new technologies are superior,” he told
the audience during a session Wednesday morning.
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Josephs was joined on the panel by Susan DeVore,
president and CEO of the health improvement organization and group purchasing
organization Premier; and Mark Neaman, CEO of the Chicago
area's NorthShore University HealthSystem. An essential element in the aim for
higher efficiency will be the need to more critically assess the value of new
innovations, the panelists said.
“If it's
clinically appropriate but equally efficacious to existing technology, then
frankly it's just adding costs to the system,” Josephs said. “That's not
something we would prefer.”
Fee for service is dead and the current landscape
“is a bit chaotic,” noted DeVore, who said health providers are in the process
of integrating what has been a fragmented industry. In light of that, the old
ways of doing things are not going to suffice, Neaman said. “The stakes are
very high for us as providers,” he told the audience.
New payment models aimed at improving efficiency
and getting a handle on costs have proliferated quickly in recent years,
nurtured by provisions of the Patient Protection and Affordable Care Act.
Many providers are joining accountable care organizations, which are
risk-sharing mechanisms available through government payers like Medicare as
well as private payers, in which members agree to strive for cost and quality
targets and share savings or losses.
Monday, AdvaMed promoted an industry-funded white paper based on the
responses of officials from nine unnamed health insurance companies who were
interviewed about their movement toward pay-for-performance and risk-based
contracts. Officials from five insurers said they had become more selective
about approving coverage for new technologies in the past three years. Four
said they plan to demand
more evidence before covering products. All said costs were driving
their organizations to explore new reimbursement models.
The trade group representing medical-device
manufacturers worried these rapidly burgeoning pay-for-performance and
risk-based reimbursement models will result in what AdvaMed CEO Stephen Ubl
called “unintended consequences.”
Too many of the arrangements emphasize cost targets
over quality benchmarks, said Joe Almeida, the trade group's chairman as well
as CEO of the medical-device manufacturer Covidien. “They run the risk of
really tipping too far, so physicians have incentive not to adopt things that
really benefit patients,” said David Nexon, an AdvaMed senior vice president.
Health economists countered that the white paper
may have overstated those concerns and that it's hard to make the
extrapolation. Insurers agreed, saying truly superior innovations would not be overlooked, even
if they come at higher costs. And most health officials interviewed by Modern
Healthcare said the key factor is the proof.
“The thing
that's been missing from the model until now is the evidence,” said Diana
Zuckerman, a researcher who has been critical of the Food and Drug
Administration's procedures for approving and monitoring medical devices.
The federal
agency's recent plans for an accelerated approval pathway for some medical
devices has been met with criticism by consumer advocates who say such efforts
put patients in danger.
During a conference session on Tuesday afternoon, FDA Commissioner Dr.
Margaret Hamburg said that as science and technology advance at extraordinary
rates, the agency wants to stay up to speed as a partner with the medical technology community. A
more efficient system overall will allow for the delivery of new science and
technology for patients in more reliable and cost-effective ways, but the emphasis
on speed doesn't mean a step away from scientific rigor, she said.
As new products make their way to the forefront, no
matter how rapidly, the
onus is increasing for manufacturers to ensure that providers are convinced the
innovations are worth the financial investment.
It's not about the lowest price point, that's just
one part of the overall value equation, Cigna's Josephs said. It's about having
more data and conceiving of partnership arrangements to help get there,
according to Premier's DeVore. “Bring your evidence and data, and bring a willingness to collaborate
and take risks,” she said.
Follow Sabriya Rice on Twitter: @MHsrice
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