I’m going to cheat a little today and reprint an article by Mary Stuart which was published in the December issue of In Vivo: The Business & Medicine Report. The article is essentially the slightly edited transcript of a panel I moderated recently at the IN3 Medical Device 360 Conference held in San Francisco. I had been asked to bring my own and other industry perspectives about how the medical devices was changing from the payer and provider perspective, rather than from the medical device manufacturer perspective. The audience was primarily medical device entrepreneurs and the people who make up their ecosystem.
As someone who straddles both of the worlds, medical devices and healthcare services, I was eager to ensure that the many medical device entrepreneurs who attend this conference hear what those who will ultimately decide the fate of their companies–the payers–would have to say. I was fortunate enough to rope a few colleagues into the panel, notably: Csaba Mera, MD, Deputy Chief Medical Officer of Cambia Health Systems; Andrew Oliveira, MD, Senior Medical Director for National Accounts, Aetna; and Ken Paulus, President and CEO of Allina Health System.
These gentlemen were unusually candid with me and the audience about how they think about medical devices and where they can play a role in improving health outcomes and cost. It was fascinating to hear them struggle to identify any medical device of any kind that had done anything to reduce costs in any meaningful way. Moreover, it was a sobering reminder to entrepreneurs that voice of the customer is king and that too often the customer is the last person who gets thought about in the process of medical device entrepreneurship.
Among the topics we discussed were how important meaningful clinical trials are (ones that show true improvements in efficacy, not just safety), how the payers are actively moving to reduce the number of devices they pay for, how payers and providers define cost savings (hint: it is not just price), and how medical device entrepreneurs can and should interact with payers early in the process of invention.
Here are a sample of some of the provocative quotes from the article.
“ We are just scratching the surface of the opportunity to standardize and ruthlessly take cost out. There will be fewer choices long-term.” – Ken Paulus
“I’d like to say that what’s offered as data amazes us. For whatever reason, many new devices, and the same goes for some drugs, are rushed into the market with the barest scientific evidence. If you develop some device for GERD, for the treatment of reflux – and it would be really nice if someone could invent one thatactually works without major surgery – it’s not enough to show us just 50 patients.” -Csaba Mera
“We’ve run one program for the last eight years that looks at what it costs physicians for an episode of care. If they’re doing a hip, a knee, a back surgery, or taking care of a certain condition, we look at the total cost for that condition, and we apply it to that physician. Then that rating will say whether they’re in or out of this narrower network” -Drew Oliveira
I hope you take the time to read the full text of What Those Paying are Saying Thanks to In Vivo and Elsevier and Mary Stuart for the right to reprint and circulate the article, which can be accessed here: What Those Paying are Saying.
It’s true… like almost anything else, people form consumers to businesses, to payers, they buy more of what they WANT than what they NEED, because most of the real evidence for the vast majority of products is soft not hard…
Payers seem often to be more concerned (and understandably) about the legal liability than improving long-term health outcomes, which the evidence is showing is more about connection, community and mental health than physical..
but going after physical health seems to pass some “legal litmus test”