Pro-dex

Emerging Trends At AdvaMed 2011 - Healthcare Reform

To say that there’ve been sleepless nights over The Affordable Care Act of 2010 would probably be the understatement of the year. Something that complex and expansive has left many expressing—sometimes vehemently—concern over what it will mean for medical device innovation, quality, and profitability.

Four panelists at AdvaMed 2011(Caroll Neubauer of B.Braun Medical, Inc., John Bishop of Cepheid, Michael Mussallem of Edward Lifesciences Corporation, and Patrick Morrisey of King & Spaulding) weighed in on what health care reform looks like one year later—and what aspects keep them up at night.

A major issue that they all agree upon is the uncertainty of what the law would or could mean. This has been made even more ambiguous with the constant threats to repeal the Act.

While there weren’t clear-cut solutions to the enormous ramifications of health reform, there were some telling (and surprising) insights:

• Approximately 23 percent of doctors are employed by health systems. That’s expected to double in the next few years.
• The answer many are still giving for how to make health reform work is to sacrifice quality of care for cost.
• A serious issue is the aging population. There’s going to be more health care consumed over the next decade and beyond and we’re not as prepared as we need to be.
• Focus in the U.S. is on how to afford the growing need for care. In turn, innovation is taking a back seat.
• Industry surveys since 2008 have revealed that 52 percent of consumers believe that 50 percent of healthcare costs are wasted. 38 percent grade the U.S. healthcare system a D or an F.
• There’s an exodus of start-up medical technology companies bringing their product to market in Europe instead of the US.
• Medical Device Tax is likely to have negative consequences for small start-ups and not-for-profit companies.  
• In 2010 there was a 40% cost increase in getting a product to market. The process is getting more expensive, unpredictable, and taking longer.
• The consensus on the panel is that the FDA needs to make process changes to accommodate the new emerging technologies that are out there. For example, conducting post-market surveillance effectively verses forcing everything to be collected on a pre-market prospective basis.
• It’s important to acknowledge that the FDA is cash-starved too. They didn’t receive any funding in the Affordable Care Act or the Stimulus Act, while their responsibilities have increased. The financial pressures faced by the FDA make it very difficult to operate with the appropriated funds they are given. The reality is that the FDA will be looking more and more to the health care industry to help them cover some of their costs.
• The U.S. is expected to fall to the number two slot in the medical technology industry within ten years. 

Clearly, there’s a great deal of pessimism overall about how the Affordable Care Act of 2010 will be carried out. The bright spot is that, in the midst of the confusion and fear of the unknown, the panelists are still optimistic that the U.S. will eventually be successful in coming up with health care reform that is more effective and quality-driven than other models currently in existence.

Here’s hopin’!