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Battelle Medical Devices Updates

Battelle Medical Devices Updates

Industry Insights
physician reviewing a patient's chart and information on a computer

Measuring the Value Added for Medical Devices and Drug Treatments

By Jeffrey Geppert and Stephanie Kute

The healthcare industry is facing pressure to deliver better health outcomes at lower prices. At the same time, the industry is shifting risk and accountability to providers through value-based payment models. To succeed in this market, drug and device manufacturers will need to be able to calculate and explain their value proposition to providers and payers in terms of the Clinical Quality Measures (CQMs) and value-based payment models. This is an emerging challenge for which solutions do not yet exist.  

Two approaches are possible:

  • Quantify the value using established CQMs such as those recognized by the Centers for Medicare and Medicaid Services (CMS) 
  • Develop a new measure

Using a recognized measure, such as those in the CMS Measure Inventory Tool (CMIT), has the advantage of already being vetted across the healthcare community. However, applying these measures to a specific pharmaceutical or device treatment, as opposed to measuring quality across a healthcare facility or provider, is somewhat of a new twist. 

This is how it would work for a new vascular catheter technology. A hospital that currently tracks and reports a Hospital Inpatient Quality Reporting Program measure related to Vascular Catheter-Associated Infections could stratify their own risk-adjusted data based on whether patients included in that measure calculation received the new technology or not. Then, this could be repeated across multiple hospitals. If the measure was improved for patients that received the new technology, then the treatments’ value could now be communicated in terms of the established outcome measure. Capturing a new technology’s value in term of an established outcome measure could be particularly powerful since it leverages real-world evidence.

However, in cases where there is not a relevant measure already established or a single measure doesn’t capture the full value, what’s needed is a framework to assist device and pharmaceutical companies in determining a treatment’s value to payers, providers and consumers in a pay-for-value world. An inclusive framework would consist of multiple, diverse elements that support differentiation between treatments such as:

  • Cost
  • Outcomes
  • Interoperability
  • Security
  • User Experience

Cost may be multi-dimensional, including out-of-pocket (cost per device/dose) as well as deferred and even avoided healthcare costs (e.g., OR time, hospital stay length or readmission frequency) and non-healthcare costs (e.g., disability and time-from-work).

Outcomes are, in many cases, already being quantified via CQMs. CMS and other payers are interested in improving the connection between drugs and devices and quality measures. There is opportunity for national consensus entities to designate measures specifically related to device and drug treatment quality.

However, it may be the case that interoperability and usability of the device, the security of the device and its data, and the experience that the user has with the device (or the company) can add as much value as the traditional domains of cost and outcomes. Therefore, we must find ways to quantify these elements and weight them appropriately, relying on real world evidence. 

That’s where human centric design and cybersecurity come into play. What is critical is that these elements are considered at the very beginning of the investment and design cycle. 

Optimizing a framework for multiple stakeholders can quickly become complex, but it is doable. And it’s critically important. To deliver better outcomes at lower prices, we must work together. Drug and device manufacturers can shift the way they calculate and communicate their value proposition to providers and payers by considering established CQMs and developing new value-based payment models.