A view from the Center

Deloitte's Life Sciences & Health Care Blog

The value imperative for medtech: A new comprehensive approach

I’m headed to Baltimore for the Advanced Medical Technology Association’s (AdvaMed) annual Payment Policy conference and an energetic few days of discussion between medical technology (medtech) companies, hospitals, health plans, CMS, and Capitol Hill players. I’m sure we will speculate about the American Health Care Act (AHCA) and its future in the Senate. However, I expect the dialogue will rapidly move past this uncertainty and into the already-visible new reality many medical technology companies face: How the new care incentives, disruption in buying decisions, and rising scrutiny from a variety of stakeholders (beyond the individual physician), are creating a growing need for companies to change how they define and articulate the value a technology can deliver.

During this event, we will be unveiling some of the work Deloitte and AdvaMed collaborated on – with taskforces made up of member medtech companies – to develop an approach that will try to help stakeholders more effectively assess the value of technologies. The impetus for this collaboration was AdvaMed’s recognition of the critical need for a more robust understanding and evidence-based discussion of the value of medical technologies, coupled with growing concern that the frameworks that already exist to assess life sciences products (many of which were constructed for biopharma drugs, not medical technology) cannot be implemented “as is.”

We quickly acknowledged at the start of the initiative that it made no sense to start from scratch on an approach given the substantial work that has already been done in the field. We also recognized that a myopic, medtech-only perspective would likely not be helpful since any assessment approach must also be adopted by providers, health plans, and other stakeholders if high-value products are to get to patients. The taskforces began by reviewing a variety of frameworks and principles from around the world, and leveraged common concepts wherever possible. The process incorporated discussions with many different organizations including patient groups, payers, providers, and clinical labs.

At the heart of the recommendations are a set of core principles to guide the assessment process. These start with comprehensively defining the categories where a medical technology can have impact, as considered from the perspective of the different stakeholders (ranging from the patient and their family and caregivers, through to individual clinicians, provider institutions, commercial payers, and government bodies). We outline four main categories of value drivers:

Value drivers of medical technology (medtech)

The principles then describe some effective practices that relate to the assessment analyses themselves (such as evidence to be considered, how to think through costs incurred and avoided over the relevant timeframes, and the differentiated impact on patient sub-populations) as well as principles for the design and transparency of the overall assessment process.

Interestingly, a diverse group of medtech companies – along with representatives from payers, patients, and providers – aligned quickly on these core principles and on the sources of value. It took much longer to work through the details needed to determine exactly how value might be defined, and to define the types of metrics and evidence that could be appropriate. Many providers and payers wanted to be sure there was no double counting of benefits. Many medtech companies were testing to see if the framework adequately represented the specific value propositions of their offerings. Meanwhile, the taskforces wanted to help ensure a level of simplicity and usability, and not add explicit variations for every eventuality.

Many of the challenges now lie in moving from alignment in principle to adoption in practice. AdvaMed is planning ongoing activity to engage with payers, providers, and patient groups on evolving approaches to value assessment. However, it is exciting to see how many medtech companies are already looking at the framework and are starting to use it to drive change in their organizations.

In discussions with many medtech companies we hear that enthusiasm is building now that there is a consistent way of thinking to clarify and evaluate elements of value to each stakeholder for a particular technology. This can accelerate the internal discussion from cataloging product attributes to articulating insights on value with supporting evidence. In turn this can link to choices about customer targeting and pricing strategies, as well as end-to-end evidence planning. And there is growing discussion about how to effectively adapt processes for assessing and prioritizing new product development investments by leveraging the framework to more robustly define and pressure-test high-value innovation for patients and other stakeholders.

As the shift from volume to value-based delivery of care accelerates, it may be imperative that medtech innovators continue to proactively demonstrate how their offerings fit with the new models of care and their associated quality and cost incentives. Thinking comprehensively about differentiated sources of value – and bringing appropriate evidence to determine how to get the right treatment to the right patient at the right time – will help enable the adoption of new technologies to change patients’ lives and improve the delivery of care. And developers of high value technologies will likely be rewarded.

Author bio

Mary Cummins is a principal with Deloitte Consulting LLP, in the Life Sciences and Health Care strategy group and is leading multiple cross-sector initiatives for the Value-Based Care practice. Mary works with CEOs and management teams to redefine strategy and achieve operational transformation in the changing health care ecosystem. Her track record spans more than 20 years of delivering growth and improved profitability for a broad portfolio of life sciences clients as well as providers and payers, and her experience covers global leaders as well as earlier stage growth companies and non-profit organizations. Mary has authored several papers including a report developed in collaboration with NEHI on delivering medical innovation in a value-based care world. She also is a co-author of the Value Framework which was produced with AdvaMed.