The medical device industry, already feeling the brunt of a tax to help fund the Affordable Care Act, is seeing a dramatic increase in insurance company strategies curtailing the use of newer technologies.
Insurance companies are ramping up myriad new payment strategies impacting manufacturers and sales of their new devices and diagnostic tests such as pay-for-performance, risk-sharing and the use of evidence-based medicine, which can lead to newer devices not being covered by insurance if there’s no proof they are better than older devices.
In a new study released this week in Chicago by AdvaMed, the lobby for medical device makers, adoption of new “pay-for-performance and financial risk-sharing arrangements” has escalated with 62 percent of the insurance company respondents’ beneficiaries involved in such payment strategies this year, the study by the Analysis Group. The study is based on interviews with 9 insurers that provide health benefits to 110 million Americans, AdvaMed said.
By comparison, just 46 percent of beneficiaries were subject to such payment strategies three years ago.
“Insurers are adopting new payment models that emphasize cost reduction and raising evidence requirements for coverage,” said Stephen Ubl, president and CEO of AdvaMed, which includes Abbott Laboratories ABT -1.06% (ABT), Johnson & Johnson (JNJ), Medtronic MDT -0.71% (MDT),Stryker SYK -0.87% (SYK) and Zimmer (ZMH) as members.
“The medtech industry generally supports the movement toward new payment models that encourage providers to reduce costs through greater coordination of care, as it continues to develop advanced technologies that will facilitate better health and reduced costs,” Ubl said. “But it would be a mistake for policymakers not to address the potential for unintended consequences such as stinting on needed care or discouraging innovation.”
