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Wanda Moebius
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October 5, 2015

AdvaMed Leadership Kicks-Off AdvaMed 2015 Conference

WASHINGTON, D.C. – AdvaMed Board Chairman Vincent A. Forlenza, chairman, CEO and president BD, and Stephen J. Ubl, president and CEO of AdvaMed (the Advanced Medical Technology Association) kicked-off AdvaMed 2015, the nation’s premier medical technology conference, with an update on several key policy issues and an overview of two new studies demonstrating the value of advanced medical technology to the health system, to patients and to the broader economy.

“Medical technology has contributed to the astounding advances in health care over the last several decades,” said Forlenza. “It has helped cut the duration of hospital stays by more than half, added five years to U.S. life expectancy and reduced fatalities from heart disease and stroke by more than half. Progress like this can and will continue if we have the right policies in place to incentivize medical innovation instead of deter it.”

Forlenza noted several policy changes that will help to improve the health care ecosystem, including the 21st Century Cures Act and legislation to repeal the medical device tax, both of which were passed by the House earlier this year. Legislation to modernize and renew the Trade Promotion Authority was also passed by Congress and signed into law. Many of these elements are included in the association’s “Innovation Agenda,” which focuses on five policy pillars that will revitalize the current strained policy environment for continued life-saving and cost-efficient medical technology innovation and advancement.

AdvaMed pointed to two studies released by the association today that demonstrate the value of medical technology. The first study, conducted by the research firm, Avalere Health, looked at the “top technology” hospitals as identified by U.S. News and World Report, and found that leading health systems in the U.S. were able to adopt the latest medical advances and provide technology-intensive care without having higher Medicare spending than other hospitals that used less technology. The study reported that when “top technology” hospitals are compared with a similar group of larger hospitals having more than 200 beds, Medicare spending for top technology hospitals is significantly lower than other large hospitals.

The second study demonstrates how the extraordinarily competitive nature of the medical technology industry has kept prices low. The study found that prices for medical devices and diagnostics have grown far more slowly than the Medical Consumer Price Index (MC-CPI) and even slower than the overall Consumer Price Index (CPI). Over the period from 1989 to 2013, medical device prices have increased at an average annual rate of only 0.9 percent, compared to 4.5 percent for the MC-CPI and 2.7 percent for the CPI.

In addition, the study demonstrated that, despite a flood of new life-saving and life-enhancing medical devices and diagnostics, medical technology makes up a relatively small and constant share of national health expenditures (NHE). Throughout the 25 year period (1989-2013) examined by the study, device spending as a share of total NHE increased only from 5.3 percent to 5.9 percent. Since 1992, the share of medical device spending as a percent of NHE has been nearly flat at about 6.0 percent. In 2013, the latest year that can be studied using Census Bureau data, spending on medical devices and in-vitro diagnostics totaled $171.8 billion, or 5.9 percent of total NHE.

The research was conducted by Roland “Guy” King, former chief actuary at the Health Care Financing Administration (now 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.

“The findings of these two studies clearly demonstrate the incredible value of the life-changing medical technologies our industry is continuously working to advance and innovate,” said Ubl. “In addition to being a key driver of medical advancements and improvements to the nation’s health care system, overall medical technology spending has remained consistently low. We look forward to sharing the results of these studies with policymakers to demonstrate the value medical technology brings to patients and the providers that care for them.”

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