Evolving provider payment models and patient access to innovative medical technology

Abstract

Objective:

To investigate the evolving use and expected impact of pay-for-performance (P4P) and risk-based provider reimbursement on patient access to innovative medical technology.

Methods:

Structured interviews with leading private payers representing over 110 million commercially-insured lives exploring current and planned use of P4P provider payment models, evidence requirements for technology assessment and new technology coverage, and the evolving relationship between the two topics.

Results:

Respondents reported rapid increases in the use of P4P and risk-sharing programs, with roughly half of commercial lives affected 3 years ago, just under two-thirds today, and an expected three-quarters in 3 years. All reported well-established systems for evaluating new technology coverage. Five of nine reported becoming more selective in the past 3 years in approving new technologies; four anticipated that in the next 3 years there will be a higher evidence requirement for new technology access. Similarly, four expected it will become more difficult for clinically appropriate but costly technologies to gain coverage. All reported planning to rely more on these types of provider payment incentives to control costs, but didn’t see them as a substitute for payer technology reviews and coverage limitations; they each have a role to play.

Limitations:

Interviews limited to nine leading payers with models in place; self-reported data.

Conclusion:

Likely implications include a more uncertain payment environment for providers, and indirectly for innovative medical technology and future investment, greater reliance on quality and financial metrics, and increased evidence requirements for favorable coverage and utilization decisions. Increasing provider financial risk may challenge the traditional technology adoption paradigm, where payers assumed a ‘gatekeeping’ role and providers a countervailing patient advocacy role with regard to access to new technology. Increased provider financial risk may result in an additional hurdle to the adoption of new technology, rather than substitution of provider- for payer-based gatekeeping.

Keywords::

• Healthcare reform
• Insurance
• Health
• Reimbursement
• Managed care programs
• Durable medical equipment
• Technology assessment
• Medical economics

Transparency

Declaration of funding

The authors received financial support from the Advanced Medical Technology Association (AdvaMed) for this research. The analysis presented was designed and executed entirely by the authors, and any errors or misstatements are ours alone.

Declaration of financial/other relationships

GL & RM are employees of Analysis Group, Inc., a consulting company that has provided consulting services to both medical device and diagnostic companies, and commercial payers. GS is a former employee of Analysis Group, Inc. JME peer reviewers on this manuscript have no relevant financial or other relationships to disclose.