Here's how some medtech insiders say the value-based care model makes conditions tougher for innovation in the industry and what's needed to change that.

Marie Thibault

February 18, 2016

5 Min Read
Finding a Place for Medtech Inventions within Value-Based Care

Value-based care can present hurdles for new medical technology. Here's how some medtech insiders say the model makes conditions tougher for innovation in the industry and what's needed to change that.

Marie Thibault

What does the era of value-based care (VBC) mean for the cutting edge of medtech and diagnostics? Because of the current measures used to define what "value" is, VBC can make it tougher to introduce new technologies.

That's one of the messages from a report by the Deloitte Center for Health Solutions, titled "Delivering medical innovation in a value-based world."

The report came out of a meeting of 21 leaders from the biopharma and medtech industries, hosted by the Deloitte Center for Health Solutions and The Network for Excellence in Health Innovation (NEHI). A number of medtech executives from companies including Medtronic, Johnson & Johnson, BD, and Boston Scientific, as well as a representative from medtech industry group AdvaMed, took part in the meeting. 

One of the issues with VBC is a current fixation on short-term measures of clinical outcomes and cost effectiveness, the meeting participants said. According to the report, VBC models today mainly account for short-term clinical outcomes, resource utilization, and financial metrics. This seems to be true for ongoing models like CMS's Bundled Payments for Care Improvement (BPCI) initiative and the Comprehensive Care for Joint Replacement (CJR) bundled payment model. 

A medtech executive quoted in the report said,

There’s value in devices that isn’t all achieved through hard patient outcomes. If you can improve procedure efficiency — standardize the procedure, standardize the approach, make things work smoothly — these things start to matter. How it translates into a 30-day readmission avoided is really hard. But there are multiple lenses of medtech value and some of them are really tough to quantify and none of them are a singular home run.” 

Drawing an immediate correlation for the value of diagnostics offerings may also be tough with VBC models. While accurate diagnostics results interpreted correctly may help a physician pick an optimal treatment—if that treatment is available, of course—"it is difficult to link the value of a diagnostic directly with clinical quality measures," the report authors note.

The meeting participants discussed ways to adjust the VBC model to ensure new products still make it to market, and came up with four main solutions, summarized in the report:

  • "Adoption of a broader set of quality measures"

  • "Improved data availability, transparency, and integration"

  • "Redefinition and identification of unmet and under-met needs"

  • "Shared financial risk between life sciences companies and their product purchasers"

While the exact ways to execute these solutions differs between the biopharma and medtech industries, there are some similarities. In an interview with MD+DI, Mary Cummins, a co-author of the report and a principal in Deloitte's Life Sciences and Health Care practice, said, "The medtech industry can't try and have this conversation in isolation from what is going on in the biopharma industry." She pointed out that with the issues of price and affordability at the forefront of biopharma, "all of this is fueling the debate with payers and providers. The medtech companies need to think about how they fit into the conversation."

For the medtech industry, the report authors recommend that companies provide input during discussions about what measures might be included in future VBC models, work with payers, providers, and clinicians to create evidence of value and encourage the idea of risk-sharing early in the product lifecycle, and orient inventions toward unresolved problems in the healthcare system.  

Jonathan Fleming, NEHI president, said in a video related to the report, "In the future . . . the value to the patient will actually be defined differently than just safety and efficacy. It's going to be defined in terms of what they can do, the kind of lifestyle that they can have, and the things that they can do in their life, or not do, because of the particular therapy that they've chosen."

That future may still be many years away. One medtech executive quoted in the report said, "I think the time horizon to get to a risk model around what each patient cares about is going to be beyond 2025.” 

Cummins echoed that sentiment. She said that while she does think efforts to create other quality measures will ultimately be successful, the process will not be easy and will likely take years.

Still, it is possible for young startups to commercialize medtech innovations in a VBC setting, Cummins said. "If we were in medtech 'Shark Tank,' what I would say is it really is more important than ever before to think beyond the pure technology innovation . . . to understand what is the value proposition of this to a broader set of stakholders?" Besides evaluating whether the new offering is different enough from alternatives, she added that this might involve partnering with providers and accelerators to creating proof of concept around the value proposition.

“This isn’t about protectionism. This is about making sure patients get the life-changing offerings they need,” Cummins said.

Get inspired to innovate during Massachusetts Medtech Week—register for BIOMEDevice Boston 2016, April 13-14.

Marie Thibault is the associate editor at MD+DI. Reach her at [email protected] and on Twitter @medtechmarie


About the Author(s)

Marie Thibault

Marie Thibault is the managing editor for Medical Device and Diagnostic Industry and Qmed. Reach her at [email protected] and on Twitter @MedTechMarie.

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