Tag: Medical Reimburstment

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ACA vs. AHCA and its Impact on the Medical Device Industry

Thanks to the ongoing healthcare bill debate between the Affordable Care Act (ACA) and the American Health Care Act (AHCA), the market space for health care in the US has been the center of attention across the globe. In the year 2010, a new healthcare bill named the affordable care act, more commonly known as the Obamacare, was brought into effect by the president of the US. The affordable care act was introduced with the objective to improve health care in the US by making health insurance coverage accessible and affordable to all. Through the affordable care act, the United States was one of the few developed countries to offer universal health care to its residents.

However, when the political reign shifted to president Trump’s administration, the Republican party introduced a legislation to repeal the affordable care act and replace it with the American health care act, with certain reforms. While the AHCA plan looms under the clouds of uncertainty, groups of doctors, nurses, hospitals, and patients have contested against the GOP’s health care plan to repeal Obamacare with the AHCA. One group missing from the opposition against the new health care bill are the medical device manufacturers organization.

What is the difference between the Affordable Care Act and the American Health Care Act

The American health care act, the GOP alternative health care bill that aims to repeal Obamacare (ACA), has been introduced with certain amendments to the latter. There are certain similarities and differences between the affordable care act and the AHCA; let’s have brief look at each. The similarities between the ACA and the AHCA are as follows,

  • The pre-existing medical conditions such as pregnancy or cancer will still be covered under the new coverage options, and insurancea2 companies cannot refuse the coverage for the same
  • Both the legislative pieces, the affordable care act and the American health care act, offer coverage to young Americans under their parent’s insurance till the age of 26
  • The affordable care act and the AHCA still prohibit the insurance plans from setting a lifetime limit and also offer tax credits to the citizens who buy insurance coverage

 

While a few aspects have been retained, there are few amendments made by the Republican party in their quest to repeal Obamacare through the GOP health care bill, replacing it with president Trump’s proposed health care reforms. The differences between the two are as follows,

  • AHCA eliminates the individual and employer mandate and the resulting penalties by making health insurance coverage optional for both the parties
  • Under the GOP alternative, Medicaid expansion is brought to a halt and restricts federal funding to facilities that offer abortions and planned parenthood
  • The proposed bill intends to repeal the taxes on health care and related services such as the over-the-counter medications, prescription drugs, health insurance and the medical device manufacturing industry, which was used by the affordable care act to pay for their plans

AHCA and Its Impact on Medical Device Manufacturers

Under the AHCA, the medical device manufacturers are set to witness sustainable growth that was capped by the excise tax of up to 2.3 per cent on the annual sales to help fund Obamacare. Under the affordable care act, this tax amount would be used to extend coverage to millions of American citizens without a health insurance coverage. The medical device manufacturing industry in the US develops, produces, and sells medical devices and surgical equipment such as high tech devices such as pacemakers and hearing aids across the globe. However, with the introduction of the affordable care act, the medical device manufacturing industry saw a significant loss of American jobs within a span of two years and scaled back their investment in research and development, and other related capital spends.

The drug, biotech, and medical device makers are set to benefit under the new reformed health care bill proposed by President Trump’s administration as it eliminates taxes worth billions of dollars on the industry. The medical device manufacturers have deemed the health care bill by the Republican party as a positive step towards eliminating medical device tax completely.

Want to know more about what’s trending in the medical devices industry?

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Healthcare Reimbursement Scenario in China and Japan: A Nightmare for Medical Device Manufacturers

There are two fundamental working models for health insurance, the first being the out-of-pocket expenses paid by the insured, which is then reimbursed by the insurer and the second being the direct payment model, where the insurer pays the amount directly to the healtha2 care provider. Even though health insurance may seem like a relatively simple process, changes in country, governance, policies, laws, insurance agents, and healthcare acts make it a complicated affair. In the case of China and Japan, the majority of its population is covered under its universal healthcare system or insurance program. The government spends a lot of money in healthcare reforms in an attempt to bring the healthcare cost down and reduce insurance frauds with better healthcare reimbursement plans. A large chunk of this healthcare cost is spent in the sourcing and procurement of medical devices. The government tries to reduce the cost burden to the healthcare facilities by reimbursing a part of the cost of medical devices. But procurement processes for these medical devices is complicated as the reimbursement rates cannot be easily calculated.

The complexity of reimbursement plan poses a critical challenge for suppliers as well as the buyers for these medical devices. Here’s how Infiniti Research approaches this problem and offers a definitive solution to concerned stakeholders:

Understanding the Complexity of Medical Insurance in China and Japan

Japan

In order to reduce their overall government spending in the medical sector, the Japanese government has been lowering the reimbursement rates for medical devices over the past three years. They have also made attempts to promote domestically procured medical devices and doesn’t recognize CE markings or FDA certificate. Since there is a lack of private insurers in the Japanese market, suppliers are obliged to clear their products for medical reimbursement. Despite the difficulties and confusing classification of devices, if a manufacturer wants to list his device, they have to benchmark their prices with approved prices based on device classes.

China

China also assumes a similar stance to promote domestically procured medical devices. But, there exists an added complexity in the procurement of the medical devices as they employ tendering and bidding process, which is conducted at national, provincial, and hospital levels. Apart from the rigorous tender and bidding process and lengthy regulatory and reimbursement approval procedure, the system also lacks a standardization procedure as the reimbursement is based on a multitude of factors such as age, place of residence, class of medical device, type of hospital, average employee wages, and local level income. The larger portion of medical device expenses is paid by the patients, as a result of which the Chinese government is making efforts to increase coverage of their health insurance plans.

So Why Should Manufacturers be Concerned about the Reimbursement Scenario?

Gaining an understanding of the reimbursement scenario simplifies and speeds up the regulatory approval process. The manufacturera2 should have a thorough knowledge of medical device classification to benchmark imported medical products with domestic products. In some cases, it is essential to modify products to suit the local requirements and to comply with reimbursement standards. Since the government has made the procurement of imported devices unfavourable, foreign players can look for mergers and acquisitions to increase their survival chances and enjoy reimbursement benefits.

Challenges Faced by Foreign Medical Devices Suppliers in Tackling the Reimbursement Scenario

Japan

  • Presence of multiple regulatory bodies
  • Complicated medical device reimbursement application and review procedure
  • Preference towards domestically manufactured devices
  • Lack of knowledge on the dynamic Japanese medical devices market
  • Regular price revisions and lowered reimbursement rates
  • Lack of proper categorization of imported medical devices
  • Unclear grouping of medical devices for reimbursement
  • Requirement of local influence for survival

China

  • Complex reimbursement calculation methods
  • Low reimbursement for complex medical devices
  • Exclusion of multiple components by government insurance
  • Variation in deductibles and hospital tier level affects the reimbursement percentage
  • Locally manufactured devices having higher proportion of reimbursement
  • A host of factors such as age, income, city of residence, occupation, hospital locality, and family structure for consideration of reimbursement to patients

How Infiniti Research Equips Foreign Medical Equipment Suppliers to Tackle the Issue:

A lot of information is available regarding the medical reimbursement scenario in China and Japan, but it is either outdated, irrelevant, or impractical. The existing reports usually focus on a general overview of medical reimbursement scenario excluding the intricacies and don’t offer scope for new adjustment in regulatory changes. Infiniti Research addresses all these problems and provides a systematic solution for medical device manufacturers to provide product-wise reimbursement information.

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Information pertaining to medical devices is extracted from public registries, government, private databases, traditional media, internet scan, local language resources, and insurance aggregators to create a sound basis for reimbursement models. Research experts at Infiniti Research also assess the reimbursement scenario for each device and start by building models from scratch, making realistic assumptions on inputs from physicians and industry insiders. The models are then validated from KOLs, other doctors, insurance agencies, hospital departments, and regulatory bodies.

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Market Intelligence Study on Health Economics Data Helps Medical Devices Sector Explore New Opportunities

The recent market intelligence study by Infiniti Research on analyzing health economics data from existing data sets examines information from country-specific clinical, operational, and financial data to help companies in the medical devices sector to maximize ROI.

Health economics – applications and effectiveness

With the increasing demand for affordable healthcare services and growing requirement for innovative medical devices, it becomes pertinent to employ a team of researchers to analyze data sets that affect the healthcare industry. Leading pharmaceutical manufacturers and healthcare professionals are relying heavily on health economics data analysis to explore future growth opportunities and maximize ROIs. Limited resources and increasing investment for better healthcare services are encouraging healthcare industries to adopt this analytics solution. The market intelligence team at Infiniti Research helps companies understand that the scarcity of healthcare resources, therapeutic, diagnostic, and preventive procedures should not be evaluated only on their efficacy but also on their cost-effectiveness – the ratio between the resources used and the related effects.

Health economics helps medical device manufacturers to introduce cost-effective tools for lower income countries. Relevant data models are prepared using economic analytical tools that help vendors introduce new support vaccines in these areas. Some of the vaccinations include pneumococcal, rotavirus, and human papillomavirus vaccines. These cost-effective tools will help the government make policies that will improve the healthcare sector in these countries and help offer affordable services to everyone.

Developing effective health economics database

Developing an effective health economics database with country-specific clinical, operational, and financial data sets will help companies explore and identify future growth opportunities. The database will help manufacturers analyze information gathered to create new ROI calculations and business cases for their product offerings. Data collected through these tools offer information on COF Business Cases, ROI Calculators, and COF Wiki KPI’s, which will help the companies validate the market size and current competitive scenario.

a2Market access strategy

Most of the medical device companies, when they try to showcase the importance of a new product, should utilize health economics and increase the capacity of their products in two primary areas: medical reimbursement and market access. Since different customer needs a different kind of approach, it is important to understand the needs of the customer base. Market access helps companies package data in the right process and deliver it to the target customer at a short time-to-market period.

Solutions and recommendations

The market intelligence team at Infiniti Research offers various solutions for the decision-making process and develop actionable insights that helped the client increase their ROI. Some of the solutions offered include:

  • Offer information collected from various sources and calculate KPIs from ROI calculators across regions like the US, China, Brazil, and Japan
  • Analysis of the COF wiki KPI’s to understand the clinical statistics pertaining to the incidence and prevalence rates of diseases like breast cancer, prostate cancer, structural heart diseases, stroke, and traumatic brain injury
  • Provide strategic insights into the dynamic demand-supply analysis specific to the market
  • Develop an extensive proprietary database consisting of information on more than two million industry experts, doctors, physicians, key opinion leaders, medical technicians, payers, end-users, and patients
  • Design new analytical model that offers a new way of problem-solving and helps the company generate revenues

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Read our comprehensive case study that offers market intelligence study on health economics data from existing data sets

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