Value for medical devices is determined by considering several important factors, like the current healthcare environment and policies that might impact patient access, the current selling environment and competition, the prevailing reimbursement – determined by coding, coverage and payment for a device, and last but not least, the short and long term strategy of the business that generates a device. Besides the above, there are other factors that come into play in determining economic value of a medical device. For instance, the doctor’s medical practice and training provides an educated bias towards or against a particular device, which in turn affects the outcome for the remaining competing devices. He or she uses these experiences to instruct the individual who in turn plays a part in the decision making process, and together with economics out-of-pocket cost sharing determine the final assessment of risk versus benefit which informs the last selection of a device.

When it comes to the last conclusion, patient access to a specific device is directed by reimbursement and its elements communicating what was done and what was diagnosed, policy was the apparatus covered by the plaintiff , and payment how much of this cost was covered by insurance. Of the three settlement elements, coding is the toughest to comprehend. In a nutshell, codes are alpha-numeric methods of information that explain medical services, devices and investigations. The medical device testing show up on the insurance forms and are utilized to notify insurers of what has been done to the individual and so determine reimbursement for all the aforementioned services. Payments vary by point-of-service, i.e., hospital inpatient or outpatient, doctor office and ambulatory and by private donors. Payments are calculated by using a resource value formula that takes into account the complexity of the service in addition to geographic differences of where the ceremony took place.

Manufacturers can influence the reimbursement of their products by providing convincing evidence of any cost-offsets of a distinct new device compared to existing ones in addition to any quality of life improvements for patients using the device. In several cases, economic and quality of life benefits may impact not only patients but also care givers and family members, by contributing to productivity gains, decrease in absenteeism, etc. The notion of clinical utility, when it encircles the economic and quality of life advantages, is what finally drives value and therefore the amount of reimbursement for a device. Clinical advantages, i.e., capturing the value of a device, are significant to the individual and can be quantified in terms of safety, efficacy and quality of life improvements. Economic benefit may be addressed by the social perspective in addition to the payer’s perspective. Economic outcomes are often measured by cost of illness, cost effectiveness and cost utility calculations, estimates of quality-adjusted life years QALYs, etc. Payers are often interested in budget-impact models which can mimic a payer’s own patient base driven via a hypothetical treatment pathway principle¬† which offers a per-member or per-month estimate of cost to the brand new procedure versus standard treatment.