A new report from the medical device industry’s premier lobbying group aims to push back against the notion that medical devices contribute to increased costs.
The updated report from AdvaMed, based in Washington D.C., finds that medical devices are a “relatively small and slowly growing share of national health expenditures. The report found that in the 22 years that form the study period from 1989 to 2010, medical device spending rose to 6 percent of the overall national health expenditure from 5.3 percent. That’s just 0.7 percentage points over 22 years. What’s more, since 1992, medical device spending has remained somewhat constant — at about 6 percent of the overall national health expenditure.
Further, medical device pricing, that even the nonpartisan Congressional Budget Office finds to be opaque, has remained low, according to the study’s authors. Roland “Guy” King, a former chief actuary at the Health Care Financing Administration (now known as the Centers for Medicare & Medicaid Services), and Gerald Donahoe, a former U.S. Commerce Department economist, found that medical device prices have increased at an average annual rate of 1 percent between 1989 and 2010, whereas the Consumer Price Index has jumped 2.7 percent, the Medical Care Consumer Price Index has jumped 4.7 percent and the Medical Care Services Consumer Price Index has increased 5.7 percent.
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The report released at the end of October comes a couple of months after another study published in Health Services Research painted a completely different picture of medical devices and their contribution to health costs. The lead authors of that study, as reported by Health Behavior News Service, found that supplies and medical devices such as stents and artificial joints were the No. 1 culprits in terms of increases for hospital inpatient costs between 2001 and 2006. Not surprisingly, inpatient hospital spending is the largest share of overall healthcare spending in the U.S.
At 24.2 percent of overall hospital inpatient costs, “supplies and devices,” (which are defined as “supply items required for patient care”) were the leading contributors to the increase in average cost per discharge. Compare that to intensive care unit charges that contributed 17.6 percent, whereas room and board expenses for a semiprivate room was 11.3 percent. Imaging such as CT scans and other advanced technological services, which many thought were the main factors behind increased inpatient hospital costs contributed just 4.9 percent.