November 12, 2012
A new study states that medical device prices have risen at a compounded 1% over a twenty-one year period. The study states that prices have risen at under half the rate of overall prices in the economy, and less than a fifth of prices for other medical goods and services.
The research was conducted by Roland “Guy” King, former chief actuary at the Health Care Financing Administration (HCFA, now known as the Centers for Medicare & Medicaid Services) and Gerald Donahoe, a former U.S. Commerce Department economist and an expert on economic accounting, on behalf of AdvaMed.
With $156 billion spent in 2010 alone on medical devices, it’s quite incredible that the end users are in fact receiving increasing value for money year-on-year.
But what is driving this increasing value?
Clearly supply chains and manufacturing per se have become more efficient over the past two decades. We would suggest that automation has also played a significant part. By reducing direct costs of manufacture, producers are able to place products into the market at increasingly competitive prices. Not to mention the improvements in quality and associated patient-benefit.
The study makes interesting reading. A copy can be downloaded here.