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Review Article

Value-Based Care: A Review of Key Challenges and Opportunities Relevant to Medical Technology Innovators

[+] Author and Article Information
Véronique Peiffer, Cynthia A. Yock, Paul G. Yock

Byers Center for Biodesign,
Stanford University,
Stanford, CA 94305

Jan B. Pietzsch

Wing Tech, Inc.,
Menlo Park, CA 94025;
Byers Center for Biodesign,
Stanford University,
Clark Center (E100) 318 Campus Drive,
Stanford, CA 94305
e-mail: pietzsch@stanford.edu

1Corresponding author.

Manuscript received August 22, 2018; final manuscript received January 28, 2019; published online March 6, 2019. Editor: William Durfee.

J. Med. Devices 13(2), 020801 (Mar 06, 2019) (6 pages) Paper No: MED-18-1140; doi: 10.1115/1.4042794 History: Received August 22, 2018; Revised January 28, 2019

Developed countries struggle with high healthcare spending, and cost is often cited as a barrier to the introduction of new patient care technologies. The core objective of this review article is to help familiarize medical technology innovators with trends in the health economic environment and the implications for the adoption of new technologies. We review and discuss this topic in language accessible to medical technology innovators. We assess macrolevel developments in healthcare spending and highlight measures already taken to control spending. We discuss practical implications for anyone involved in healthcare innovation. Two observations are central to this discussion: (1) the U.S. spends significantly more on healthcare per capita than any other developed country; (2) across developed countries, healthcare spending has risen steadily over the past two decades. Nevertheless, higher spending has not always led to improvements in health. As a result, innovators need to be prepared to navigate an outcomes-oriented and value-based environment that is being defined by the emerging requirements of various healthcare stakeholders. Practically, new products should aim to improve health outcomes at a cost deemed “good value” and/or reduce cost for one or multiple stakeholders. Opportunities also exist for tools that enable cost/outcomes tracking, which will help demonstrate value to providers, insurers, and patients.

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Figures

Grahic Jump Location
Fig. 1

National healthcare spending over time for top-10 spenders, expressed as a percentage of GDP [5]

Grahic Jump Location
Fig. 2

Drivers of healthcare spending

Grahic Jump Location
Fig. 3

Illustration of cost-effectiveness of a new healthcare product compared to standard of care. With the increase in cost between the two alternatives indicated on the Y-axis, and the increase in effectiveness on the X-axis, an innovation may be considered cost-effective if its cost and effectiveness fall in a section of the graph indicated with a tick mark.

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