The United States devotes roughly $200 billion to national health expenditures on medical devices every year. In fact, the global medical devices market is projected to grow from $495.46 billion in 2022 to $718.92 billion by 2029.
Medical device companies historically have operated under the assumption that if they built it, physicians would buy it. But consumerism and a move to value-based care that rewards quality over quantity have changed the game and what’s needed to play and win.
With increasing focus on cost containment, even some legacy products have been met with a demand for compelling economic data. Understanding and incorporating the payer perspective and data requirements early in product development is essential in this increasingly cost-conscious market. Expensive new technology that cannot clearly demonstrate better outcomes and/or lower costs will continue to face reimbursement challenges.
As of October 2022, 65,236,564 people are enrolled in Medicare. This is an increase of 132,757 since the last report.
- 35,022,974 are enrolled in Original Medicare.
- 30,213,590 are enrolled in Medicare Advantage or other health plans. This includes enrollment in Medicare Advantage plans with and without prescription drug coverage.
- 50,666,744 are enrolled in Medicare Part D. This includes enrollment in stand-alone prescription drug plans as well as Medicare Advantage plans that offer prescription drug coverage.
- Over 12 million individuals are dually eligible for Medicare and Medicaid, so are counted in the enrollment figures for both programs.
The reliability of medical devices could mean the difference between life and death, which is why quality improvement initiatives and physician quality scores are critical information for medical device and med tech sales teams to track.
As an example, a substantial portion of this healthcare expenditure in the U.S. is spent on orthopedic procedures, such as hip and knee arthroplasties. As a result, quality improvement activities and pay-for-performance initiatives are becoming increasingly important in the medical device and med tech sales industry. In this blog, we’ll explore how value-based payments are reshaping the landscape for all stakeholders involved in the US healthcare system – from payers to medical device companies, physicians, hospital administrators and more.
Quality improvement activities help providers identify areas of opportunity and improve the overall quality of care. Medical device manufacturers can play a role in this process by providing data that can be used to make informed decisions regarding the use of their products using data sets like claims.
Let’s again look at orthopedics as a service line example. Orthopedic arthroplasties account for roughly $82 billion in annual national health expenditures related to medical devices.
In order for these procedures to be successful and improve long-term outcomes and patient lives, providers must utilize quality improvement activities such as clinical protocol development, process mapping, data collection and analysis, risk management, patient safety initiatives and more. Pay-for-performance initiatives often focus on outcomes rather than inputs which further emphasizes the importance of quality improvement activities in orthopedic arthroplasty procedures as providers must demonstrate that they have achieved positive outcomes from utilizing certain devices or treatments when seeking reimbursement through payer contracts or other incentive programs.
Med tech companies are developing data analytics capabilities that can generate insights into provider performance trends as well as leverage real world evidence collected from patients undergoing various treatments or using particular devices. Additionally, companies should consider tailoring their marketing strategies towards physicians participating in value based payments so that they understand the benefits associated with using certain products over others –namely those with lower costs but equal efficacy -when making purchasing decisions.
Quality improvement activities and pay-for-performance initiatives are having a significant impact on how medical device manufacturers do business today. While there is no one size fits all solution when it comes adapting strategies around value based payments, taking steps such as investing in data analytics capabilities, tailoring marketing campaigns towards physicians participating in incentive programs, as well as leveraging real world evidence will help ensure success for device manufactures operating within this new environment.
To learn more about Carevoyance, H1’s Claims Intelligence Solution, request a demo.