According to “Evolving Reimbursement and Pricing Policies for Devices in Europe and the United States Should Encourage Greater Value” by Corinna Sorenson, Michael Drummond and Lawton Burns, “Europe more formally and consistently considers value to determine which technology to cover and at what price [compared to the US]”. The article also describes the policies both the United States and Europe have introduced to “provide temporary coverage and reimbursement for promising technologies while additional evidence of value is generated,” and outlines further actions to be taken “to ensure wise value-based reimbursement and pricing policies for all devices.”
While European decision-makers have shifted their focus from cost control to value-based policies over the past decade, the United States has been slower in adopting value-based decision processes and those have tended to focus on pharmaceuticals rather than medical devices.
The European system works as follows.
- “Market approval of a device in one country [of the European Union] should provide access to other markets through the Conformité Européenne marking process.”
- But “institutional arrangements for financing differ among countries, which can result in divergent coverage, reimbursement and pricing decisions for a particular device.”
- “Prior to making coverage decisions, European jurisdictions typically require that high-risk, innovative or costly devices… undergo a health technology assessment” and recommends for or against use, or use for only a subset of the population, based on “clinical trial evidence and cost-effectiveness data”.
- When the available evidence is insufficient or inconclusive, some European countries “offer restricted coverage for patients enrolled in studies designed to collect better data.”
- “Once coverage is determined, most European countries use prospective payment systems to determine reimbursement rates,” which may reflect value in some cases or may not, because payment systems are updated infrequently.
- To address the issue of insufficient payment for new technologies, some countries have introduced “separate or supplementary payments [lasting usually two or three years] to provide partial or total reimbursements for potential beneficial devices until they are fully captured by the payment system.”
The article also describes the American system, and emphasizes that “with limited exceptions, CMS does not currently consider a device’s comparative effectiveness or its cost relative to alternative treatment options in its pricing.” It details the concepts of “add-on payments” (for inpatient care, mostly used for implantable medical devices) or “pass-through payments” (for outpatient care, more common), which were developed to mitigate the high costs of new devices in the US. Devices must be “new and high cost” and must “substantially improve the diagnosis or treatment of beneficiaries.”
It is worth noting that “devices are rarely directly reimbursed by private insurers.” Instead, they reimburse medical procedures or episodes of care “at a specified or negotiated amount that must cover the price of the device along with other items – such as supplies, labor and facility costs – that are part of the procedure or care episode.”
The authors then outline three potential policies to improve value-based reimbursement and device pricing:
- Fostering pre- and post-market evidence (“current requirements allow clinical evaluations of most new devices to be based on similar existing (predicate) technologies rather than the actual device in question, and the clinical data submitted to be based on a literature review alone”),
- Exploring new approaches for assessing value (“devices have particular characteristics that introduce unique challenges to measuring their value” such as “frequent modifications following initial development” and the “learning curve” of medical professionals),
- Linking evidence of value to reimbursement (“this approach sets different reimbursement rates for different levels of clinical effectiveness” and may also entail different copayments).