is medical equipment expensive?

According to Modern Healthcare, medical supplies and equipment account for the largest increase in healthcare spending. Drug price negotiations are mainly based on changes in market share among competing drugs in a particular drug class. Financial waste in the medical device market is likely due to both pricing practices and overutilisation. The GAO also found that physician preferences for medical devices, such as brand or model, could also have an impact on costs.

In addition, in a competitive bidding environment, unsuccessful suppliers would lose their Medicare business, at least for those categories of supplies for which they were not chosen, which would be a large reduction in business, as Medicare accounts for approximately half of many suppliers' business. Each type of supply and capital equipment purchased by hospitals is procured differently, and within each type or category, processes vary. But that rate of change can fail if manufacturers succeed in shifting market share to a related drug in the same class. The report, entitled Lack of Price Transparency May Hamper Hospitals' Ability to Be Prudent Purchasers of Implantable Medical Devices, examined the purchasing history of 60 hospitals and found that some of them paid much more than others for the same device.

The Bleeding Edge documents the complications and high costs of various medical devices, such as metal hip replacements, the Essure contraceptive coil and transvaginal mesh. ECRI Institute's Lerner concludes this session by discussing the pricing and market practices of medical devices. His experience is yet another example of pricing in medicine, which often does not reflect what things really cost, but what healthcare companies think they can get away with. Medicare classifies durable medical equipment with prosthetics, orthotics and supplies in a general category with the ungainly acronym DMEPOS, and generally pays 80 per cent of these items, with the remaining 20 per cent co-payment being the responsibility of the beneficiary or their "Medigap insurer".

Let us take a step back to examine some features of the medical device market, the aspects that work differently and thus affect the means to reduce costs, and the changing dynamics that threaten the savings that can now be achieved. AdvaMed has pointed out that the costs of implantable medical devices, for example, have fallen in recent years.

Jonathon Lavelett
Jonathon Lavelett

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