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Even as relations between the device industry and FDA continue to improve, the Medicare monolith engenders ever-greater conflict and acrimony.

Anyone involved with medical devices for more than three or four years will have a vivid recollection of the antagonism that existed between FDA and industry regarding the product approval process. Not only did the topic dominate at workshops and conferences, but the debate—or rather, the diatribe from industry and FDA's sputtering protestations of innocence—was intensely rancorous. Industry gatherings were reduced to forums in which company representatives showed their scars and aired war stories about unconscionable delays, with pride of place accorded to petitioners who had suffered the longest. Those who cried out for change maintain that the vituperation was a necessary stimulus in forcing an unwilling bureaucracy toward the reforms enacted in FDAMA. The agency's take is that an underfunded FDA was well aware of certain problems and managed to overcome them through herculean efforts of internal reorganization and "reengineering." The truth—who should get credit for real reform of a critically important process—lies somewhere in between.

However, now that product approvals are proceeding on a relatively timely and efficient basis (for some statistics, see pages 50-51 in this month's "Industry Snapshot"), the industry has trained its sights on an even more complex and disconcerting target. To its critics, the Health Care Financing Administration, or HCFA, is like Kafka's castle—remote, capricious, unintelligible, and all-powerful. Such was certainly the image that emerged from a recent panel discussion at the Medical Design & Manufacturing conference in Minneapolis. Moderated by Pamela Bailey, president of AdvaMed (formerly HIMA), the participants included Scott Augustine, MD, CEO of Augustine Medical (Eden Prairie, MN); David Giddings, CEO of Diametrics Medical (St. Paul, MN); and Fred McCoy, president of Guidant Cardiac Rhythm Management Group (St. Paul, MN).

It is the lack of any clarity or accountability emanating from HCFA that causes the most frustration, says Augustine. Decisions are entrusted not only to unqualified bureaucrats, he maintains, but to faceless ones: "A bureaucrat decides for you, but you can't find that bureaucrat, know what rules he or she is following, or find anyone who can tell you the rules." HCFA will sometimes even acknowledge the inconsistency of its own internal policies: "For example, the fiscal intermediaries [large insurance companies that have contracted with HCFA] often don't even have the current Medicare manual. HCFA says, 'Yes, we have rules for them, but we don't make them follow [those rules].'"

According to Giddings, HCFA formerly functioned in the role of gatekeeper, whereas now it is simply “a barrier.” Whether through lack of resources, technical incompetence, overstringent evidence requirements, or simple inertia, the government appears “fearful or uncertain about new technologies.” Giddings cited what he termed the “shameful” example of a novel coagulation self-monitoring diagnostic test, which has languished in a wilderness of inappropriate categorization and lack of reimbursement for six years.

While acknowledging that HCFA is under considerable pressure to reconcile the needs of Medicare patients with balanced budget strictures, McCoy counseled that the way out of a “dire” situation lies in stressing the “indispensable advocacy” provided by the device industry. “We do address people in their hour of need . . . We do important work, and that has political clout.”

As the inordinate amount of attention paid to Medicare during our Energizer Bunny of a presidential campaign has shown, today's politicians ignore such issues at their peril.

Jon Katz
[email protected]

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