Report: Reimbursement codes block innovative surgical techniques

June 7, 2010 by MassDevice staff

Commercialization costs and bureaucratic red tape keep device makers from bringing more advanced minimally invasive surgical techniques into the spectrum of care, according to a report from design and engineering firm Cambridge Consultants.

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Entrepreneurs in the minimally invasive surgery space might wait 12 years for their product to become profitable, but there's another costly bottom line as well: patient's well being. While medical technology waits for government approval and adoption by healthcare providers, patients wait as well. Because technological development is leaving the approval process in the dust, doctors can't provide their patients with the most advanced products.

A report from Cambridge Consultants indicates that the insurance industry's reimbursement codes are a huge part of the problem. The coding system, according to the report, "generally refers to the cost, payment and insurance infrastructure supporting patient care." The codes helped bring standardization to insurance coverage, but only for existing devices and procedures, according to the a Cambridge, U.K., and Cambridge, Mass.-based design and engineering firm.

This means that the coding system "dictates that devices and procedures in clinical trials must be quick and profitable first, with efficacy and patient care playing secondary roles," according to the report.

"You've got to weigh patient first, and [device companies] do that, but no system is perfect and some of the best products that could come to market are probably being held back because of bureaucracy. Nobody wants to bring a bad product to market, but to get [any product] to market is such an enduring task, and the return on investment has to be substantial," said John Genova of the company's Global MedTech Practice.

The report found that the approval process discourages innovation. The barriers that must be overcome to get that ROI are too large for many smaller companies, and, as Genova said, many are unwilling to spend unless they have more certainty of future profits. Device makers need not only Food & Drug Administration approval but the approval of doctors and, more recently, patients.

Rahul Sathe, a Cambridge Consultants engineer specializing in surgical and implantable devices, said companies need to show consumers that their devices are substantially better than what's already on the market, but those products still need to be very similar to the existing devices so that they get the same coding and cost structure.