MASSDEVICE ON CALL — The medical device industry has been a target for years for researchers and critics who have claimed the industry is a prime contributor to the skyrocketing cost of U.S. healthcare, and industry advocates responded this month with a new study in the industry’s defense.
Medtech lobbying giant AdvaMed helped sponsor a report, published this month, that extols the ways in which the medical device industry benefits the U.S. The analysts focused on how medtech reduces the costs of caring for chronic diseases and concluded that, taking into account the costs, the industry represents a net positive for the economy.
Examining only mainstream treatments for heart disease, diabetes, colorectal cancer and musculoskeletal disease, the report concluded that medical devices are responsible for a net annual benefit of $23.6 billion to GDP. Furthermore, the devices helped generate some $7.2 billion in tax revenue thanks to "improved labor market outcomes."
"The numbers speak for themselves. To those who claim we can’t afford the innovations our industry produces, my response is – for the sake of patients and the economy both now and in the future – we can’t afford not to have them," AdvaMed president & CEO Stephen Ubl said in prepared remarks.
The study used its assessments of past economic value to project future savings, concluding (conservatively, the report claims) that medical devices could help generate $1.4 trillion cumulatively over 25 years if market "incentives" persist. Alternatively, the report projected a $3.4 trillion loss over 25 years in a "decreased incentives scenario."
"While this study does not examine specific policies that may affect incentives to invest in technology development, it does make clear that such incentives have significant consequences for the economic costs and benefits generated by the American health-care system," the authors wrote. "These should be considered in policy development, especially at a time when the market forces and policies influencing health care are changing dramatically."
The medtech industry has been under fire for years for allegedly hiking up the cost of care without providing equal benefit to patients and providers. A 2012 study called devices a key driver of rising costs and a study released in 2013 dubbed medtech a major "culprit" in driving up U.S. healthcare spending. Another study released in May 2014 ranked medical devices high on a $9 billion list of wasteful Medicare procedures.
The industry has fought back with a raft of studies of its own that conclude that medtech prices have barely budged in more than 20 years and that devices represent a consistently small share of total healthcare spending in the U.S.
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