To the MedTech industry: don’t stick to old-fashioned business models when talking about the value of your technologies

  • Posted on 14.04.2011

To the MedTech industry: don’t stick to old-fashioned business models when talking about the value of your technologies

Prof. Rosanna Tarricone

Rosanna Tarricone

Director Master of International Health Care Management, Economics and Policy


Medicine became evidence-based a long time ago and rightfully so. So why is it that policy decisions are, still today, far from evidence-based in Europe? Why are healthcare managers and decision makers still relying upon short-term cost containment objectives when it comes to access, regulation and evaluation of new technologies?

The above are not my observations but rather the newest findings of EHTI researchers who have investigated how procurement of innovative technologies is processed around Europe. In short, this research finds that all too often procurement is focused on price and cost, with almost no consideration for the value that technologies can bring to patients and caregivers, to health systems and to EU economies at large.

The focus of policymakers – who keep struggling with shrinking budgets  – on cost-containment prevents new technologies from realising their full potentials, seeing as how they on the one hand have to meet increasing patient needs while on the other hand they have to keep costs down.  So who will rise to the challenge and show policymakers why their current way of thinking will not produce the desired results in the long run?

EHTI – the European Health Technology Institute for Socio-Economic Research, will…

EHTI’s research can best be described as “actionable research”: using rigorous methods and empirical data to provide concrete recommendations. But research only becomes truly actionable if it is picked-up and used by the stakeholders at whom it is primarily targeted. And this is where industry has a role to play. Industry should work together with all other stakeholders to reach a more balanced assessment of the value of a medical technology whereby not only cost is taken into account, but also more patient and society focused factors such as quality of life, return to productivity, economic benefits etc…

Nowadays, procurement is becoming a centralised competence in almost all European countries and EHTI research has found medical professionals are rarely actively involved in this process. To avoid lifesaving medical technologies being considered commodities, procurement staff would thus have to obtain the same level of medical expertise as doctors have. This is obviously impossible. Therefore, industry should collaborate with procurement staff and warn them for the dangerous pitfalls of current decision-making processes which are centred around cost-containment. Are decision makers aware of the fact that cost-savings in a hospital can incur costs somewhere else in the healthcare system?

Policymakers and their staff are Key Opinion Leaders, we just need to make sure they realise this! Therefore, industry needs to change the way it communicates. If research indicates that short-term savings for one party often incur costs for other parties down the line, then industry must identify these other parties and talk to them, make them aware of how on party’s decision will financially impact them. Spill-overs and negative externalities are the first to be studied in health economics but rarely considered in healthcare management. Well, EHTI is doing just that and will keep demonstrating how single choices can have multiple effects.

– Prof. Rosanna Tarricone, Executive Director, EHTI

The European Health Technology Institute for Socio-Economic Research is an independent research institute aimed at developing data and evidence on the social and economic value of medical technology and its impact on the economy and welfare of European countries.

The Research Institute is composed of prestigious European universities (Università Bocconi and the London School of Economics), policy-makers and industry.

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