Shaping initiatives that lead to Stronger Healthcare

Medical Device & Diagnostic Industry Magazine
MDDI Article Index

Originally Published March 2000

Working to implement a public policy that supports HIMA's strategic plan, the organization's president, Pamela Bailey, is looking to medical manufacturers for help in meeting her objectives.

In an interview that took place in December of 1999, Pamela Bailey, the president of HIMA, describes how the rapid movement toward a more consumer-driven healthcare system requires a public policy agenda that strives to provide patients with broader access to medical technology. Articulating the value of improving technology to political leaders, Bailey explains, will lead to a stronger overall healthcare system. The interview was conducted by Steven Halasey, editor in chief of Medical Device Executive Portfolio.

Q. How does HIMA form its agenda and action plans?

A. When I came here last June, I started an intensive strategic planning process that I don't think HIMA had ever done before. During the summer months, we worked internally as a staff team putting together our strategic plan, which was presented to and approved by the board in September.

HIMA's role is to support our members and bring innovation to the patient, and to create a public policy environment that supports those objectives. Our plan is based on four key priorities: rapid product approvals by FDA, access to international markets, prompt coverage determinations both in the United States and globally, and adequate reimbursement. Everything we do is intended to support those objectives.

Q. Were those the objectives that were brought to the forefront by the strategic planning process and by HIMA members?

A. Yes, and this is an important point because part of the planning process involved doing surveys of our members over the summer and asking them specifically what they looked to HIMA to do on their behalf. Interestingly, one of the questions we asked was, if you look out over the next five years, what do you see as the single greatest issue facing the industry? And the answer was healthcare and Medicare reform.

Q. Where does the study that HIMA is now undertaking fit into the planning or agenda-setting process?

A. If you look at the issues we deal with, obviously they all relate in one way or another to public healthcare policy. One of the underlying assumptions of our strategic plan is that we work on these issues in a political environment. Healthcare today is a top-line political issue—in the United States and globally—and if we're going to be successful in this world of politics, we need to understand and use all the modern tools of political endeavor. That involves developing a message, building coalitions, organizing grassroots constituent activist programs, and targeting our message to the appropriate political leaders.

As an industry, we want to do a much better job of articulating the value of technology. Innovative technology is at the heart of a strong healthcare system. We know from our own polling data through the years that technology is one of the things that Americans treasure most about their healthcare system.

Five years ago, industry contributed to the Wilkerson report, which was a broad, state-of-the-industry review. It's time to update that. We are now working with the Lewin group, so we've called it the "Lewin report." Our objective here is to take a look at the industry today and compare it to where we were five years ago. By identifying factors that led to changes over the last five years, we hope to envision what medical technology will be doing for patients over the next five years. We think this will be extremely valuable, not only in terms of articulating what this industry is all about for patients, but also in helping us to define a public policy agenda. What are the public policy initiatives we need for the system to be able to deliver to patients what the device companies are developing or preparing to develop? We expect the report to be available in late March.

Q. So it should be ready in time for HIMA's annual meeting?

A. Yes, but our primary motivation on its timing is that this year is going to be a very important year, with healthcare a national political issue. It's going to be critical to all areas of healthcare—in this political season—that the role of technology is understood and that public policy proposals are analyzed in terms of how they might help or hinder the development of technology for patients.

Q. Do you foresee HIMA undertaking direct-to-consumer advertising, on the level of what the pharmaceutical industry has done, to communicate the value of technology?

A. No, we do not plan on advertising per se. We do intend to work with the media in terms of general coverage of breakthrough technologies and the benefits of technology to patients. We'll be doing that both in Washington and around the country.

Q. What does HIMA see as the big challenges in dealing with FDA currently and, say, a year from now, or as far into the future as you can see?

A. Well, our priority with FDA right now is the implementation of FDAMA. I think we articulated the differences we had with FDA at the time of the healthcare hearings last October. We're hoping to meet with FDA and find some common ground so we can work together to implement the legislation as it was intended to be.

Q. Do you think that FDA went into FDAMA believing that the legislation was merely a formalization of its own reengineering process, rather than something new that Congress was instructing the agency to do?

A. I can't speculate as to what the leadership of FDA was thinking at that time, since I was not involved with that process. I have to rely on the legislative record. Certainly there was a record of important accomplishment at the agency. But Congress did go further, putting in place several necessary and very important policies that could only be implemented through legislation.

Q. What do you see as specific problem areas involving FDA? For instance, one of the hot issues right now is the reuse of single-use devices. What other areas are HIMA members concerned about?

A. Among the issues we're following in FDAMA implementation are the nature and use of the dispute-resolution process and the area of third-party review. For example, we recently did a workshop with FDA on third-party review and how companies can take advantage of this opportunity. Also, the whole issue of medical error and patient safety is one we continue to examine very closely. In an industry that has a record of reengineering and developing new products with changing technologies, it is important for manufacturers to work with physicians to maintain a basis of continuous improvement in patient safety.

Q. The penetration of international markets seems to be an ongoing battle. What is HIMA's involvement there?

A. We've had an international program at HIMA for a number of years. Priority global markets for our member companies include Japan, France, Germany, and the United Kingdom. What we are seeing in all of these markets is very similar to what we're seeing in the United States: healthcare systems becoming more expensive. Governments directing more or less nationalized systems are looking for ways to control healthcare spending, and one of the areas they scrutinize is technology and the cost of technology. An ongoing challenge in each of these markets is how can we work with the governments to help them understand that the benefits of a technology may be much more than the initial product cost, and that vast potential can be lost to the system and the patient if innovative products are never brought to market.

Q. Do you work directly with the governments, through local agencies, or, in the case of Europe, with EUCOMED and EDMA?

A. We work on a number of different levels. We cooperate very closely with our partners in each of those markets: EUCOMED and EDMA, the U.S. Chamber of Commerce in Japan, SNITEM in France. Many of our companies have local representatives in these countries. We also meet directly with foreign government officials.

We've also begun working with our international partners on studies that look directly at the value of technology, such as the work carried out by SNITEM in France earlier this year. I went to Japan in September for the release of a new study by the Chamber of Commerce on biotechnology, and there is a similar study being put together in Germany that will be released next April. In these efforts, we're trying to bring the story not only to government officials but also to the news media and the public. Patients everywhere want access to the latest technology, and they're not always aware that their own governments' policies can end up restricting that access.

Q. In the United States, consumer action can exert significant pressure to change the policies of healthcare providers and payer organizations. What are the pressure points on an international level? Is it easier to deal with a system that is government driven?

A. I'm not sure I'd call them pressure points so much as information points. In many ways, of course, the government agencies are representing the best interests of patients. It's often a matter of just sharing information. Sometimes this takes place via direct negotiation, say in terms of what the reimbursement level should be for a particular product.

But just as important are more broadly conceptual discussions. For example, a new agency has been set up in France to evaluate access to devices, and we are involved in discussing how to make the process of such evaluations less burdensome. So I think one of our goals is simply to share our experience of what works and what doesn't. The intent is always the same—to build good public policy.

Q. In Europe, outcomes research and evidence-driven healthcare seems to have a lot of support. In the United States, this concept is sometimes characterized as an unnecessary expense that manufacturers would prefer to avoid. Where does HIMA stand on this issue?

A. We're working on this issue right now with HCFA. The whole coverage process is under review and reform. We had some beneficial legislation last year touching on this, for instance in the Medicare bill. And last December we released a paper on coverage criteria. But it's an ongoing process.

Q. In an evidence-based system, who should conduct the needed research? Should there be a government technology assessment bureau, for instance, or should the system rely on industry-sponsored research?

A. Any time the government wants to implement that kind of research, we have the potential danger of centralizing the process to the detriment of rapid patient access. At one point there was a proposal for such a centralized agency, but that idea was reassessed and reconfigured as more of a data collection and dissemination bureau whose mission would essentially be one of information sharing. Currently, the Agency for Healthcare Research and Quality has that mission.

Q. And that information is supplied by manufacturers that have conducted outcomes research?

A. That's right. Or by specialty medical groups. One of the things we are always on the lookout for is that if you restrict the market entry of a technology or deny it reimbursement, you then restrict the ability to gather data on the benefit of that technology. If you're looking for evidence, but you don't allow a product to be covered, you're not allowing the evidence to be collected on a broader population.

Q. In terms of reimbursement issues overseas, how much influence does HIMA have?

A. Well again, these are country-specific issues that we discuss with the involved government officials on behalf of our companies, just as we do in this country.

Q. You're certainly aware of the remark made by CDRH director David Feigal to the effect that HIMA only represents 10% of the device industry. How do you respond to that?

A. Well, I think he must be referring to the number of companies that make up the entirety of the medical device sector. However, in terms of devices on the market, HIMA member firms manufacture nearly 90% of the healthcare technology products purchased annually in the United States. In that sense, there is only 10% of the industry we don't represent. This is not to imply that small companies are unimportant to us—on the contrary, we're actively seeking the membership of smaller firms. Some of them simply find it too expensive to join a trade association, especially early on.

Q. What effect does your quest to include small companies have in shaping HIMA's agenda and action plan?

A. Small companies are very important to us because they represent the backbone of innovation in this country. These companies are heavily dependent on venture capital, which looks for certainty—particularly regulatory certainty. When that level of assurance is not there, the money will go to other investments perceived as safer or more predictable. So it's not surprising that venture capital firms have been looking more and more at the information technology companies.

HIMA seeks to influence this dynamic to the extent that we can help to provide a path of regulatory certainty. We're doing a service to our members but also to future members—today's start-ups or small companies—and to the patients that will benefit from the technologies that will emerge.

Q. At last year's annual meeting, your predecessor sounded a cautionary note about industry consolidation and the effect it had on the number of companies able to remain involved in HIMA activities. Is this still a concern?

A. I don't necessarily see it as a concern; I think it's just a fact of life in this industry. Whether it's a company that begins small and grows big or a big idea that starts in one or more small companies and is acquired by a larger company, that's just the nature of the industry today. I don't expect it to change in the near future. Again, our concern is in ensuring a regulatory climate that preserves access to capital for the smaller firms, where creativity and innovation often germinate.

Q. In terms of actual reimbursement levels—not just the procedure for determining what those levels should be—do you think that there is likely to be continued significant pressure for manufacturers to reduce prices?

A. The role and process of public payment is obviously very different from the role and process of private payment, especially in this country. HIMA intends to play an active role in broad Medicare reform, beyond just the specific technology coverage or HCFA issues. The manner and extent to which Medicare must change to provide broader access to technology will be a major issue of the presidential campaign. How Medicare is reformed will have an impact on the overall availability of federal budget dollars for the program, which in turn will affect reimbursement policies. Medicare can and must be reformed to make it more sustainable for future generations.

On the private side, we are engaged in a project with the California Gold Strike Partnership, an economic development initiative of the California Department of Commerce, which includes a contract with the Rand Corp. to study managed-care companies and how they assess and pay for technology. Rand will release that report in March and we expect to work with the managed-care industry to identify follow-up steps and to help our members implement better managed-care policies.

Q. Is it encouraging to HIMA members that United Healthcare has decided to allow its physicians to make coverage determinations without restrictions?

A. Yes, in the sense that all healthcare is still local. In the end, these decisions must be made by the individual physician and patient. There is a role for outcomes data and often it is the managed-care company that has that data, and can best share it with the individual physician. But I think United has signaled that we're moving into another stage in the development of managed care—one that will benefit rapid patient access to technology.

Q. Given the fact that most people's insurance coverage is sponsored in some way by their employers, to what extent are large employers involved in this process? Does HIMA work to help them understand healthcare policy issues?

A. In Washington, HIMA is involved with some of the large employer groups on major healthcare issues. We don't, however, participate in the relationship between individual employers and their health plans. However, to the extent that outcomes data and evidence-based medicine is made more broadly available, employers will come to understand the positive and ultimately cost-effective role that technology can play in improving patient care.

Q. Last year's HIMA meeting featured a session on consumer-driven healthcare. How active is HIMA in consumer education?

A. Well, I think we are definitely moving toward a consumer-driven healthcare system in which consumers will have considerably more information available to them. They are already much better informed than in the past—through Internet sources, for example. As novel treatments develop that can be fundamentally tailored to the individual needs of each patient, patients will be more involved than ever in the decision-making process with their physicians. This is part of the evolution and strengthening of our system, which will be better off for it. As an organization, HIMA will be involved in broad healthcare reform issues that influence consumers on many levels—treatment for the uninsured, ways in which employer-based coverage can be improved, and many other issues and proposals now coming to the table.

BIOGRAPHY
Pamela G. Bailey has worked in both the public and private sectors of health policy for nearly 30 years. During the early 1970s, she served on the White House staff as the assistant director of the domestic council. From 1975 to 1981, she was director of government relations for the American Hospital Supply Corp., and from 1981 to 1983 she was assistant secretary for public affairs for the Department of Health and Human Services. After another four-year stint on the White House staff, Bailey was named president of the National Committee for Quality Health Care in 1987. Prior to joining the Health Industry Manufacturers Association (HIMA) in June of 1999, she served from 1988 to 1999 as president of the Healthcare Leadership Council. As HIMA's president, she is responsible for developing and implementing legislative and communication strategies in the health policy arena to ensure timely patient access to technology.

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