Over the weekend, the New York Times ran a front-page story contrasting the cost difference between having a knee replacement done in the U.S. versus Belgium. The article cites as one of the root causes of the cost disparity the lack of transparency in the implantable device industry, and places a good amount of responsibility for this on the myriad of players involved, from hospitals and their staffs to the manufacturers of the devices, health plans and industry middlemen.
Certainly greater transparency is desirable and beneficial. Costs will decrease, and most importantly, greater transparency will ensure that the right implant is used to reduce the pain and increase the mobility of the patient, which, after all, is the intention of the surgery to begin with. It would create competition within the industry among manufacturers, generate R&D investment and improve the ability of man-made materials to mimic the functionality and longevity of human body parts. All good.
The article casts a spotlight on an implantable medical device industry in need of a new financial paradigm. From my perspective, we need to simplify the complexities and reveal the pricing details behind the cost and quality of the devices themselves, as well as the surgical procedure and administrative costs. At Access MediQuip, we’re doing it now consistently across three fronts following this playbook:
- Partner with hospitals and ambulatory care centers; we assume the financial risk associated with procuring implants and obtaining reimbursement from health plans, all while ensuring surgeon choice. As a result, pricing is crystal clear to us and everyone involved in the procedure, including the patient.
- Give manufacturers valuable market perspective on the industry as a whole, from the devices most in demand to safety and quality analytics, and provide them with an organized channel for their products.
- Provide health plans with access to data and analytics that measure spend and improve member outcomes, while passing along savings from all of the above.
All of this adds up to improved cost structures and patient outcomes. I believe in transparency with regard to pricing, device performance and surgical outcomes. The U.S. has a market-driven, consumer-empowered economy across every other major industry. The health care marketplace in general and the medical device sector in particular are moving, albeit slowly, toward an open market, customer-driven model.
With natural market forces such as medical tourism seeking clear and better pricing, ways to drive transparency such as Access MediQuip’s approach that I outlined above, and regulatory forces such as federal health care reform and compensation-driven performance measurements, I’m hopeful that we’re moving faster toward a true open market, which will be better in the long run for everyone.