Medical Device Industry Tries to Get Ahead on Value-Based Care

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By Mike Stankiewicz

The move to value-based payments in Medicare needs refinement to recognize the value of medical technology, a key medical device industry group said.

The problem with the current system, the Advanced Medical Technology Association said in a report issued Dec. 19, is inadequate measures of quality that underpin this payment system can mean patients aren’t getting optimum care and costs may be the key driver, not patient outcomes.

“This study underscores the uneven playing field on which medical technology is judged, potentially depriving American patients of the innovative care they deserve,” Scott Whitaker, president and CEO of the group, said in an accompanying statement.

AdvaMed said quality measures are essential to VBP as the health system moves away from paying based on volume. The industry group said the lack of certain quality measures for device use and data collection can lead to overuse or underuse of devices and services, safety issues, and stifled innovation. AdvaMed said examples of what it called quality measure gaps exist for common procedures such as hip and knee implants, glucose monitoring, and remote patient monitoring.

The industry group wants the Centers for Medicare & Medicaid Services to add quality measures that reflect the value of medical technology in what it called “payer-developed core measure sets,” referring to health insurers. Other parts of the health-care industry should work with device makers to find and close existing gaps, AdvaMed said.

Don May, executive vice president at the device trade group, which represents 80 percent of medical technology companies in the U.S., also said the gaps exist because quality measure developers haven’t looked at the “device angle.”

Device makers need to be engaged in the process when quality measures are developed that have a device component, he told Bloomberg Law.

Cost Over Value

The group noted that physicians could be choosing less costly devices, and not considering whether the device is right for the patient. The report said that more expensive devices, like insulin pumps, can improve clinical outcomes and have been shown to generate annual savings of more than $5,000 per patient.

May said choosing proper, sometimes more costly, devices could prevent risky replacements and improve recovery times.

“An active 65-year-old patient is not going to need the same joint replacement as an immobile 90-year-old,” May said. “If you can have a quality metric that helps decide the appropriate device for every patient, it will lead to greater outcomes over several years.”

He added that doctors, not device makers, are the ones recommending certain devices to patients and no doctor is an expert on every single device on the market and what the outcomes might be. With more quality assessment, he said, more data will be available to determine which devices work for certain types of patients.

Praise From Insurance Group

America’s Health Insurance Plans praised the device group’s recommendation for a collaborative process with quality measure developers and policy makers.

AHIP “agrees that quality measures are important to support value-based payment models, reward appropriate care delivery, and improve quality of care,” a spokesperson for the group told Bloomberg Law Dec. 19. “To achieve these goals, it is critical to ensure that measure sets are streamlined, outcome-oriented, and meaningful.”

The CMS did not respond to Bloomberg Law’s request for comment.

‘The Writing’s on the Wall’

Thomas Beimers, a health-care attorney at Hogan Lovells’s Minneapolis office, said that payers, like insurance companies and the CMS, are driving value-based payments and everyone in the health-care industry is starting to get on board, including device makers.

“There is a fundamental shift in how we pay for care and device manufacturers want to participate in whatever comes next,” he told Bloomberg Law Dec. 19. He added that the device industry has been slow to adapt to these new payment models and few payment programs exist for them. He said there are currently no value-based device purchasing programs from the CMS and only a handful of companies offer outcomes-based pricing.

In June, Medtronic announced an outcomes-based pricing agreement with Aetna for insulin pumps for their diabetes management.

“This agreement reinforces our shift towards value-based health care. We know technology alone isn’t enough and ultimately, improved outcomes are what matter,” Hooman Hakami, president of the Diabetes Group at Medtronic, said at the time.

Beimers added that future demonstration programs that include value-based pricing for devices could be coming down the pipe following the announcement of a “new direction” for the CMS innovation center.

To contact the reporter on this story: Mike Stankiewicz in Washington at mstankiewicz@bloomberglaw.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com

For More Information

The report is at http://src.bna.com/u4e

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