Evaluating Innovation in a Value-Based Healthcare World

What to know:

Over the past several years, healthcare reimbursement in the U.S. has begun to shift from a traditional fee-per-service model to a value-based model. In this system, physicians, hospitals, medical groups, and other healthcare providers receive payments based on measures such as quality, efficiency, cost, and positive clinical outcomes from private payers or government programs such as Medicare and Medicaid. Correspondingly, the Centers for Medicare and Medicaid have implemented a variety of value-based programs and activities meant to boost outcomes at a reduced cost to patients and the healthcare system overall.

With a growing number of new technologies in the medtech space, there’s a critical eye on whether specific devices boost healthcare value. Are they making measurable differences in clinical outcomes? Are they cost-effective, and do their benefits justify the cost?

One example of a device category currently under scrutiny is surgical robots, such as the da Vinci by Intuitive Surgical, which is designed to enhance laparoscopic surgery, a minimally invasive surgical technique. The da Vinci can offer advantages such as enhanced dexterity, reduced surgeon fatigue, and improved precision.

Patients have often requested these devices be used to perform their surgeries since they are viewed as cutting-edge. This has helped to spur strong sales to hospitals across the country. Accordingly, hospitals have marketed their use of these devices to attract and retain top surgeons. Getting the latest robotic technology has in many ways become like an arms race, a recent article in Pharma Intelligence website In Vivo suggests, because hospitals don’t want to be left behind as their competitors tool up.

However, while some studies have shown superior outcomes compared to traditional laparoscopy, others have shown that patients who have robotic surgery have similar lengths of stay, readmission, and complication rates to those who undergo traditional laparoscopy for the same procedure. With the high cost of surgical robots—a single device totals in the millions of dollars—media and policymakers have questioned whether these devices are providing a significant enough increase in value relative to their cost.

This question may still be too early to answer. Robotic surgery is still relatively new compared to laparoscopic surgery, so there are fewer experienced surgeons in robotic surgery than in laparoscopic surgery. As physicians become more experienced and proficient in performing robotic surgery and as robotic equipment continues to evolve, however, outcome improvement may become more evident.

What to do:

  • Understand that value-based healthcare is here to stay. New and older devices alike will be under increasing scrutiny to justify cost by providing better value.
  • Invest in healthcare economics & outcomes research (HEOR). To remain competitive, medtech companies need to provide evidence that their products can help payers, providers, and patients meet healthcare-related challenges in ways that are comparable to competing products sold at a lower cost or provide better outcomes to justify a higher cost.

For additional data and insights on reimbursement, HEOR, and value generation and communication, check out our suite of Medtech Market Access solutions.


Contributor: Lucy Guan; Analyst
Published on: 20 November, 2018