A new study released at the Advanced Medical Technology Association (AdvaMed) Med Tech Conference held September 23-25, points out that pricing trends for implantable medical devices show that average prices have declined significantly for major categories of implantable medical devices from 2007 through 2011. In that period, the seven largest categories of implantable medical devices saw substantial declines in average selling prices paid by hospitals on both a nominal and inflation-adjusted basis.
“These average pricing declines reflect the intensely competitive marketplace for medical technology and underscores the tremendous value devices and diagnostics provide to patients and to the overall healthcare system,” said Stephen J. Ubl, President and CEO of AdvaMed. Ubl added, “We look forward to sharing the results of the study with Congress and other policymakers as they consider changes to the healthcare delivery and payment system.”
The research based on seven medical device categories showed declines in average inflation-adjusted prices ranging from 17 percent to 34 percent depending on device type. The categories include implantable defibrillators (24%), cardiac resynchronization therapy defibrillators (26%), pacemakers (26%), artificial hips (23%), artificial knees (17%), drug eluting stents (34%), and bare metal stents (27%).
The study reaffirms previous findings that medical technology prices overall have remained consistently low for 20 years. Prices have been growing at less than half the rate of prices in the overall economy or at an average annual rate of 1.0 percent over the period compared to 2.7 percent for the overall consumer price index. In addition, spending on advanced medical technology makes up a consistently small and stable six percent of national health expenditures.
The takeaway from this study shows that contrary to popular misconceptions, medical device pricing particularly for life-saving and life enhancing implantables is not a significant factor in rising healthcare costs. If medical device prices had grown at the same rate as other prices for healthcare goods and services then overall health costs would have risen faster.
The question asked is “If the overall prices for medical technology are going down, why should reimbursements for certain procedures go up?” Reimbursements for certain procedures can go up, since they are not based solely on the price of a given medical technology. Also, included are a number of items such as operating room expenses, hospital medical and administrative staff salaries, costs of other inputs such as energy and other supplies used in procedures, and costs for overall care and follow-up.
The research was conducted by Analysis Group Inc., on behalf of AdvaMed. For more information, go to http://advamed2013.com, follow @AdvaMed2013 on Twitter.