Feature | July 29, 2013| Edward J. Dougherty, senior healthcare advisor, Arent Fox LLC

Four Key Themes Emerging in the Medical Technology Market

Hospitals are changing the way they purchase new medical technologies

How to evaluate new cardiac technology
During the Med Tech Market Access conference in June, medical technology executives focused on challenges and opportunities when selling innovative medical technologies in the emerging U.S. and global healthcare marketplace. Organized by the legal firm Arent Fox LLP, participants discussed the “new normal” for the global medical device market where financial constraints increasingly impact both treatment and purchasing decision-making. As a result, companies develop products that demonstrate improved clinical outcomes and continue to provide services that raise the quality and efficiency of healthcare delivery in an increasingly resource-constrained environment.
 
During the meetings, device industry executives examined key sales strategies and critical pressure points in the global healthcare marketplace. As part of the talks, four key themes emerged that medical technology company executives should be aware of and that are outlined below:
 
1. A Holistic Approach: When deciding to purchase new medical technologies, hospitals increasingly will make decisions on a macro-level that are geared toward treating the broader population — not individual patients. Hospitals used to make purchasing decisions based almost exclusively on surgeon preference for specific patients. But now a more complex analysis is conducted to determine how a new technology will fit into treatment pathways for that patient population, what the demonstrated clinical value will be, and how the product will affect the cost of care.
 
2. The Reimbursement Squeeze: Reimbursement for hospital products and services is expected to continue to decline over the next five years. To survive, hospital executives are working to sustain managing with payment from all payers at a lower Medicare rate. As a result, costs are being cut at a time when the expense for treatment is increasing and the number of patients is expanding.
 
Compounding matters further: hospitals generally lose money when they treat Medicare patients, but they can make up for it through higher reimbursement from commercial health insurance plans. But over the next five years, it is expected that commercial payer reimbursement will decline even further. It is imperative for hospitals to develop profitable business models based on Medicare revenue levels.
 
3. A Longer Sales Cycle: Because customer budget constraints are lengthening the sales cycle, medtech manufacturers must work to develop a “value partnership.” Historically, there has been something of an adversarial relationship between manufacturers and provider customers. To bridge the gap, manufacturers are working to communicate more effectively and persuasively the value of their products and services. 
 
So far, the most successful strategy is built on collaboration between customers and manufacturers, where both parties see a value. For example, a manufacturer can develop a productive sales relationship that also meets the customer’s needs. This could include, for example, offering data from the manufacturer, discounted sales agreements based on the volume and longevity of the relationship, and cost savings for services.
 
4. Standardizing Innovation: While it may appear counter-intuitive, standardizing innovation can accelerate market adoption. Manufacturers and their customers must work together to develop and standardize a process for evaluating new technologies. That process will make it easier and faster to examine features and benefits of new products, including the clinical utility, economic impact, and how well it fits into clinical practice. The goal should be for the new technology to fit more seamlessly with existing treatment options already in use.
 
 
 
Editor’s note: Author Edward J. Dougherty is a senior healthcare advisor at Arent Fox LLC. The firm regularly advises clients on the development of reimbursement policy and provides counsel on strategies to ensure that their customers receive appropriate, value-based payment for their products and services. Its team of health law attorneys provides counsel and representation on all legal and regulatory aspects of large-scale transactions, regulatory compliance, investigations, and litigation. Dougherty can be contacted reached [email protected]
 

Related Content

Abbott Secures FDA Approval for MRI Compatibility on Ellipse ICD
Technology | Implantable Cardioverter Defibrillator (ICD)| September 22, 2017
Abbott announced U.S. Food and Drug Administration (FDA) approval for magnetic resonance (MR)-conditional labeling for...
Toshiba Showcases MRI Workflow Enhancements at RSNA 2017
News | Magnetic Resonance Imaging (MRI)| September 21, 2017
September 21, 2017 — Toshiba Medical will highlight its latest...
Tryton Side Branch Stent Recognized With Premier Technology Breakthrough Award
News | Stents Bifurcation| September 21, 2017
September 21, 2017 — Cardinal Health and Tryton Medical Inc.
DISRUPT BTK Study Shows Positive Results With Lithoplasty in Calcified Lesions Below the Knee
News | Peripheral Artery Disease (PAD)| September 20, 2017
Shockwave Medical reported positive results from the DISRUPT BTK Study, which were presented at the annual...
CZT SPECT camera detectors offered by GE.

A display of CZT SPECT gamma camera detectors at RSNA 2016. These detectors are more sensitive than those used in older cameras, allowing for faster scans or lower radiation dose. 

Feature | Nuclear Imaging| September 19, 2017 | Dave Fornell
Cardiac nuclear myocardial perfusion imaging (MPI) has been a mature area of imaging for years, but has recently star
Corindus Announces First Patient Enrolled in PRECISION GRX Registry
News | Robotic Systems| September 18, 2017
September 18, 2017 — Corindus Vascular Robotics Inc.
Two-Year ILLUMENATE Trial Data Demonstrate Efficacy of Stellarex Drug-Coated Balloon
News | Drug-Eluting Balloons| September 18, 2017
Philips announced the two-year results from the ILLUMENATE European randomized clinical trial (EU RCT) demonstrating...
Sentinel Cerebral Protection System Significantly Reduces Stroke and Mortality in TAVR
News | Embolic Protection Devices| September 18, 2017
September 18, 2017 – Claret Medical announced publication of a new study in the...
Fysicon Receives FDA Approval for QMAPP Hemodynamic Monitoring System
Technology | Hemodynamic Monitoring Systems| September 18, 2017
Fysicon announced that it has been granted 510(k) clearance by the U.S. Food and Drug Administration (FDA) for its...
Overlay Init