Study: Payment models that curb costs may thwart coverage of new medical technologies


A new study by the Analysis Group examined the relationship between insurers' adoption of provider payment models to curb costs and approval of coverage for new items and services made possible by advances in medical technology.

The key finding, according to the announcement: As pay-for-performance and risk sharing programs increase, providers may shy away from medical technology advances that deliver value. What's more, it's also harder to get coverage approval for costly but clinically-appropriate items and services made possible by technology.

So "patient access to medical devices and diagnostics is facing a double hit," said Stephen J. Ubl, CEO of AvaMed. 

The peer-reviewed study was published in the Journal of Medical Economics and is based on interviews with nine commerical payers. It found that 75 percent of polled insurers plan to transition into provider payment models focused on cost reduction by 2016.

But overemphasis on cost control may discourage innovation and experimentation with new drugs, devices and procedures, as FierceHealthPayer reported. Cost control may discourage doctors from advocating for patient access to advances in medical technology that improve healthcare, the announcement stated.

Over half the respondents reported becoming more selective in approving benefit payment for new technologies in the last three years. And more than 40 percent of respondents believe that in the next three years, evidence requirements for approval of a new technology will become even stricter, the announcement noted.

Relatedly, a lack of health insurance reimbursement codes for services provided by medical device start-ups has been another hurdle in making new product offerings available to insured customers.   

"We need to ensure that new payment models being adopted by private insurers and Medicare alike include safeguards that protect patients from potential unintended consequences, [including] stinting on patient access to care or discouraging innovation," Ubl remarked.

Consider the demand for spinal fusion implant surgery. Use of this procedure increased 70 percent nationwide in 10 years, with new device companies such as Titan Spine and Expanding Orthopedics entering the market, as FierceMedicalDevices reported. Originally intended to treat severe scoliosis and spinal tuberculosis, there are now 14 conditions for which the surgery is considered medically necessary. Insurers now limit reimbursement for this procedure, which costs an average of $27,600 per hospital stay.

For more:
- read the AvaMed announcement
- here's the Journal of Medical Economics study abstract
- see the study report (.pdf, subscription or purchase required)

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