When it comes to policy issues, it was good news/bad news for attendees of the 2015 MedTech Investing Conference in Minneapolis.
On the plus side, a panel discussion, "Medtech, the View from Capitol Hill," saw panelists agreeing that regulation by the FDA had become much more collaborative with medtech, to the point where they were optimistic that the FDA/industry relationship had turned a corner.
"The FDA today is working much better than it was a few years ago," said Ralph Hall, professor of practice at the University of Minnesota Law School.
But the focus is shifting to new challenges, especially in reimbursement, panelists said. Kathleen Harrington, chairwoman of government relations at Mayo Clinic, pointed to the recently-passed Medicare Access & CHIP Reauthorization Act, which ended the annual drama of Congress patching the Sustainable Growth Rate formula. With MACRA, passed by a bipartisan coalition and signed by President Barack Obama, the industry is seeing a new focus on quality-based payment.
Determining the definition of "quality" will be the challenge going forward, panelists said.
"Probably all of us in this room have wished for value-based payment, and we got it. And now we have to invent it – and it’s not going to be easy," Harrington said. "This is a case of, ‘Be careful of what you wish for.’ Because now we have to define value, and it’s really going to be difficult."
Mark Leahey, president & CEO of the Medical Device Manufacturers Assn., agreed that defining value in a way that satisfies all stakeholders will be a major challenge.
"Everyone agrees with paying for value, not volume," Leahey said. "The key question that we really haven’t gotten our arms around … [is] over what time horizon are we measuring value?"
Developing a system that rewards early innovation, not just cost savings down the road, is something that policymakers are just beginning to discuss, he added.
In the short term, practical issues such as repealing the medical device tax continue to be a high priority for the industry, panelists noted. (The MDMA table outside the conference room was festooned with red-white-and-blue bumper stickers that read, "NO 2.3% – Help US Defeat the Medical Device Tax.")
Rep. Eric Paulsen (R-Minn.), who has been 1 of the industry’s strongest advocates in Congress, said he believed 2015 could be the year that the device tax was finally repealed. "We want to make sure we move this all the way past the goal line and get this passed into law," he said, adding that bipartisan support to repeal the device tax continues to grow.
Paulsen also pushed the idea of consumer-driven care and valuing the role of the patient in the decision-making process. The panel’s moderator, Shaye Mandle, CEO of Minnesota medtech business association LifeScience Alley, underlined that issue.
"Are we going to wake up in a world where we’re truly selling to the consumers in a few years, or are we never really going to get to that?" Mandle asked.
Harrington said that’s a question that keeps her up at night, worrying if medtech is headed to a future of narrowing networks and shrinking consumer choices.
"At Mayo, we’re spending a lot of time trying to understand the patient and how they make decisions," she said. "What’s the value of [innovation] to them in making decisions? That’s still a bit of an unknown, but that’s the nut we’re going to have to crack."
Hall suggested that consumer-driven care might unfold in unexpected ways.
"You see the rise of citizen research – individual groups, patient advocacy groups, doing their own research, doing their own funding, creating their own intellectual property," he said. "So we have this other avenue of innovation coming from very new sources. It’s going to be a fascinating dynamic."