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Wanda Moebius
October 28, 2013

New Study: Device Use Does Not Drive Hospital Charge Variation

WASHINGTON, D.C. – The Advanced Medical Technology Association (AdvaMed) today released a new study on hospital charges that shows medical devices are not the cause of wide variations among hospitals in the amounts they charge for similar admissions.

“The medical technology value proposition is the best bargain in health care today, with intense competition helping to keep prices low. This new study affirms that medical devices are not driving variations in hospital charges,” said Stephen J. Ubl, president and CEO of AdvaMed.

The study divides FY 2012 Medicare hospital claims data into two groups, comparing variation in hospital charges for device-intensive admissions with the variation in hospital charges for non-device-intensive admissions. In the study, device-intensive admissions included hip and knee replacements, stents, pacemakers and defibrillators. The study’s findings reveal that the variation was significantly greater – 22 percent greater – for admissions that were not device intensive.

“Based on this analysis, we conclude that the variation in device prices paid by hospitals was not a cause of the wide variation in hospital charges,” the study states.

“This study clearly refutes the claims of those who have pointed to medical technology as the root cause of variations in hospital charges,” said Ubl.

“The results also dovetail with other recent data showing that devices are not driving health care price increases. In fact, data show that for the last two decades medical technology has made up a consistently small and stable 6 percent of national health expenditures and that medtech prices have risen at less than half the rate of inflation and one-fifth the rate of all other medical products and services,” Ubl said.

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AdvaMed member companies produce the medical devices, diagnostic products and health information systems that are transforming health care through earlier disease detection, less invasive procedures and more effective treatments. AdvaMed members range from the largest to the smallest medical technology innovators and companies.