Medical Device

Overview

In the world of fee-for-service health care, most medical devices were sold to hospitals or other health care providers for use in the diagnosis or treatment of patients.  Except in the case of durable medical equipment, health insurers rarely pay for the devices separately, so the principal aim of the medical device maker was to provide a quality product at a price point that would still allow the purchaser to make money on the procedure in which the device was used.  The device maker had little need to concern itself with the other costs of the procedure, or with whether the procedure improved the patient’s quality of life.  VBC’s focus on reducing cost and improving the patient’s outcome presents device makers with new challenges and new opportunities.  Device makers increasingly are acquiring or creating consulting or management capabilities in order to offer customers a complete solution to the procedures in which their devices are used.  This section will report on the impact of VBC on the medical device business.