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Pricing and Reimbursement Strategies for Diagnostics

The reimbursement for diagnostics is the key requirement for both the diagnostic providers and the payers because while 5-7% of the hospital cost is incurred on diagnostics, they are used for around 70% of the healthcare decisions. Developing an optimum price especially with respect to emerging diagnostic technologies such as molecular diagnostics has been very challenging as evidence-based pricing does not suffice for such technologies. This complicates the scenario for early movers in diagnostics. However, there has been an on-going issue even with respect to existing technologies, as the companies have an immense need to re-consider their pricing strategies to deal with cost and demand versus reimbursement issues. Hence, it is very crucial to identify novel pricing strategies to maintain a fair plane among all the stakeholders. Key features of this report ' ' Regulatory structure for U.S. and Europe' ' Existing pricing strategies for healthcare diagnostic equipments' Novel pricing strategies for healthcare diagnostic equipments' Strategic recommendations for existing and first mover healthcare diagnostic equipments' Indicative prices and reimbursement amounts for healthcare diagnostic equipmentsScope of this report ' 'Understand the existing structure for reimbursements for healthcare diagnostic equipments developed markets' Understand the existing pricing for healthcare diagnostic equipments for developed markets ' Understand the role of various factors impacting price of the healthcare diagnostic equipments' Understand the evolution of pricing strategies in recent times within healthcare diagnostic equipments' Helps in determining the complete understanding of changing times within pricing with respect to reimbursementsKey Market Issues ' The healthcare diagnostic industry is currently facing the issue of lack of reimbursements for various procedures which are extremely critical to patient diagnosis' This lack of reimbursements has started to affect the market negatively and the major markets in developed economies are seeing a negative to flat growth rate ' Various end users are using this opportunity to push the prices of the healthcare diagnostic products further down, which can lead to decrease in the size of the industry ' Various countries in Europe have their own reimbursement structure and policies with respect to various procedures. This is creating lot of bureacratic and pricing hurdles for the Original Equipment Manufacturers (OEMs) of these products.' Various governments in Europe are changing their reimbursement policies with respect to new products launched within the healthcare diagnostic industry.Key findings from this report ' A procedure might have a higher chance of getting insurance coverage, if it reduces the overall healthcare cost.' The recent reduction made by the CMS in the reimbursement amount for non-facility units is expected to impact the diagnostic devices market especially in the form of lack of innovation. ' The reimbursement structure is restraining the growth of innovative technologies such as molecular diagnostics. ' An OEM's pricing is fundamentally based on its desired Return-on-Investment and the overall cost of manufacturing its equipment.' Fair Value Pricing and Risk Sharing Pricing are the new methods of pricing within healthcare diagnosticsKey questions answered ' What is the existing reimbursement structure within the major markets in healthcare diagnostics'' What are existing pricing strategies employed by healthcare diagnostic Original Equipment Manufacturers (OEMs)'' What is the impact of current reimbursement policies over the pricing of healthcare diagnostic equipment pricing'' How do the OEMs of healthcare diagnostic equipments price their products considering reimbursement policies across the world'' What are the possible drawbacks of recent changes in reimbursement policies across the globe'
Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Pricing and Reimbursement Strategies for Diagnostics

  • 1. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Pricing and Reimbursement Strategies for DiagnosticsPublished on June 2010 Report SummaryThe reimbursement for diagnostics is the key requirement for both the diagnostic providers and the payers because while 5-7% of thehospital cost is incurred on diagnostics, they are used for around 70% of the healthcare decisions. Developing an optimum priceespecially with respect to emerging diagnostic technologies such as molecular diagnostics has been very challenging asevidence-based pricing does not suffice for such technologies. This complicates the scenario for early movers in diagnostics.However, there has been an on-going issue even with respect to existing technologies, as the companies have an immense need tore-consider their pricing strategies to deal with cost and demand versus reimbursement issues. Hence, it is very crucial to identifynovel pricing strategies to maintain a fair plane among all the stakeholders.Key features of this report Regulatory structure for U.S. and Europe Existing pricing strategies for healthcare diagnostic equipments Novel pricing strategies for healthcare diagnostic equipments Strategic recommendations for existing and first mover healthcare diagnostic equipments Indicative prices and reimbursement amounts for healthcare diagnostic equipmentsScope of this report Understand the existing structure for reimbursements for healthcare diagnostic equipments developed markets Understand the existing pricing for healthcare diagnostic equipments for developed markets Understand the role of various factors impacting price of the healthcare diagnostic equipments Understand the evolution of pricing strategies in recent times within healthcare diagnostic equipments Helps in determining the complete understanding of changing times within pricing with respect to reimbursementsKey Market Issues The healthcare diagnostic industry is currently facing the issue of lack of reimbursements for various procedures which are extremelycritical to patient diagnosis This lack of reimbursements has started to affect the market negatively and the major markets in developed economies are seeing anegative to flat growth rate Various end users are using this opportunity to push the prices of the healthcare diagnostic products further down, which can lead todecrease in the size of the industry Various countries in Europe have their own reimbursement structure and policies with respect to various procedures. This is creatinglot of bureacratic and pricing hurdles for the Original Equipment Manufacturers (OEMs) of these products. Various governments in Europe are changing their reimbursement policies with respect to new products launched within thehealthcare diagnostic industry.Key findings from this reportPricing and Reimbursement Strategies for Diagnostics (From Slideshare) Page 1/7
  • 2. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email! A procedure might have a higher chance of getting insurance coverage, if it reduces the overall healthcare cost. The recent reduction made by the CMS in the reimbursement amount for non-facility units is expected to impact the diagnosticdevices market especially in the form of lack of innovation. The reimbursement structure is restraining the growth of innovative technologies such as molecular diagnostics. An OEMs pricing is fundamentally based on its desired Return-on-Investment and the overall cost of manufacturing its equipment. Fair Value Pricing and Risk Sharing Pricing are the new methods of pricing within healthcare diagnosticsKey questions answered What is the existing reimbursement structure within the major markets in healthcare diagnostics What are existing pricing strategies employed by healthcare diagnostic Original Equipment Manufacturers (OEMs) What is the impact of current reimbursement policies over the pricing of healthcare diagnostic equipment pricing How do the OEMs of healthcare diagnostic equipments price their products considering reimbursement policies across the world What are the possible drawbacks of recent changes in reimbursement policies across the globe Table of ContentTABLE OF CONTENTSPricing and reimbursement strategies for diagnosticsExecutive Summary 10Market overview 10Key findings 11Analyzing best-fit strategies for novel pricing and reimbursement 13Strategic recommendations 14Chapter 1 Introduction 16Summary 16Key take aways 16Report description 16Stakeholders 17Chapter 2 Market overview 20Summary 20US regulations for medical devices & diagnostics 21United States Department of Health and Human Services (HHS) 22United States Public Health Services (PHS) 22National Institutes of Health (NIH) 22Agency for Healthcare Research and Quality 22Indian Health Services 22Substance Abuse and Mental Health Administration 23Centre for Disease Control and Prevention 23Food and Drug Administration 23US reimbursement structure 28US reimbursement payors 29Public health insurance 29Pricing and Reimbursement Strategies for Diagnostics (From Slideshare) Page 2/7
  • 3. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Medicare 29Medicaid 29Other public systems 30Private health insurance 30Employer-sponsored insurance 30Administration 31Financing 31Private non-group (individual market) 31Overview 31Administration 31Financing 31US reimbursement procedures 32Benefit eligibility 32Billing process 34Coding systems 34Pricing processes 35Guidelines for coverage decision-making 36US diagnostic imaging reimbursement structure 37Medicare perspective 37European healthcare reimbursement structure 38European healthcare regulatory structure 38German healthcare system 40Impact of regulations on pricing and reimbursement 43French healthcare system 44Impact of regulations on pricing and reimbursement 48UK healthcare system 49Impact of regulations on pricing and reimbursement 52Italian healthcare system 53Impact of regulations on pricing and reimbursement 55Spanish healthcare system 55Impact of regulations on pricing and reimbursement 58European diagnostic imaging reimbursement structure 58Pricing and reimbursement: pharmaceutical vs. diagnostics 58Level of pricing transparency for diagnostic devices 60Chapter 3 Key findings 64Summary 64Introduction 65Impact analysis: role of pricing in risk minimization 65Payors (health insurance companies) perspective 68Diagnostic providers perspective 69Identifying critical issues in the pricing and reimbursement of diagnostics 71Decline in the reimbursement for non-facility units in US 71Evolving molecular diagnostics causing further complications 72Factors affecting price of healthcare diagnostic products 73Competition: 75Company Profile in the local market: 78Government: 79Reimbursements 80Pricing and Reimbursement Strategies for Diagnostics (From Slideshare) Page 3/7
  • 4. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Chapter 4 Analyzing best-fit strategies for novel P&R issues 84Summary 84Introduction 85Pricing strategy 85Price management and reassessment of pricing throughout the product lifecycle 87Existing product technologies 89New product (first mover diagnostic) technologies 90Payor engagement strategy 90Introduction of separate business unit for pricing and reimbursement 92Novel pricing for existing and first mover diagnostic technologies to overcome reimbursement issues 93Fair value pricing 94Risk based pricing 94Outsourcing pricing & reimbursement strategies 96Universal pricing 97Free pricing 97Strategic recommendations 98Innovations to demand a price premium 98Case study Average selling price of mammography units 98Reduced time to market to generate faster ROI 100Technologies addressing unmet clinical needs to benefit diagnostics providers 100Chapter 5 Appendix 104Index 125List of FiguresFigure 2.1: US healthcare regulatory organizational chart 21Figure 2.2: US FDA organizational chart 24Figure 2.3: CDRH Organization Chart 25Figure 2.4: US healthcare reimbursement and financing structure 28Figure 2.5: Healthcare structure in Germany 40Figure 2.6: Healthcare structure in France 44Figure 2.7: Healthcare structure in the UK 49Figure 2.8: Healthcare structure in Italy 53Figure 2.9: Healthcare structure in Spain 55Figure 3.10: Reimbursement mechanism 67Figure 3.11: Different cases for reimbursement approvals 69Figure 3.12: Factors affecting pricing in a healthcare diagnostic OEM 73Figure 3.13: Pricing work flow in a healthcare diagnostic OEM 74Figure 3.14: Pricing equation 75Figure 3.15: Product lifecycle for a diagnostic product 76Figure 4.16: Value-based pricing & reimbursement 86Figure 4.17: Product lifecycle (PLC) for a diagnostic product 88Figure 4.18: Price recommendations at Product Lifecycle (PLC) stages 89Figure 5.19: Mammography: Average selling price ($)for U.S., 2005-10 99List of TablesTable 2.1: Payment & coverage in pharma 59Table 3.2: Reduction in US. medical procedure reimbursement 71Table 6.3: Indicative prices for in vitro diagnostic equipment US 104Pricing and Reimbursement Strategies for Diagnostics (From Slideshare) Page 4/7
  • 5. Find Industry reports, Company profilesReportLinker and Market Statistics >> Get this Report Now by email!Table 6.4: Indicative reimbursement for in vitro diagnostic tests US 105Table 6.5: Indicative reimbursement for in vitro diagnostic tests US (contd. 1) 106Table 6.6: Indicative reimbursement for in vitro diagnostic tests US (contd. 2) 107Table 6.7: Indicative reimbursement for in vitro diagnostic tests US (contd. 3) 108Table 6.8: Indicative reimbursement for in vitro diagnostic tests US (contd. 4) 109Table 6.9: Indicative reimbursement for in vitro diagnostic tests US (contd. 5) 110Table 6.10: Indicative reimbursement for in vitro diagnostic tests US (contd. 6) 111Table 6.11: Indicative reimbursement for in vitro diagnostic tests US (contd. 7) 112Table 6.12: Indicative reimbursement for in vitro diagnostic tests US (contd. 8) 113Table 6.13: Indicative reimbursement for toxicology/DAU (Drugs of Abuse) tests 114Table 6.14: Indicative reimbursement for toxicology/DAU (Drugs of Abuse) tests 115Table 6.15: Indicative reimbursement for toxicology/DAU (Drugs of Abuse) tests 116Table 6.16: Indicative reimbursement for toxicology/DAU (Drugs of Abuse) tests 117Table 6.17: Indicative reimbursement for point of care tests 118Table 6.18: Indicative reimbursement for Microalbumin and Creatinine tests 119Table 6.19: Indicative Reimbursement for various kind of Hemoglobin tests 120Table 6.20: Indicative prices for in vivo diagnostic equipment ($) US 120Table 6.21: Indicative reimbursement for in-vivo diagnostic tests US 121Table 6.22: Medicare reimbursement for mammography services 122Table 6.23: Medicare reimbursement for mammography services 123Table 6.24: 2005 Medicare payment for magnetic resonance imaging of the joints of the extremities 123Table 6.25: 2007 Medicare reimbursement for SPECT/CT for selected tumor imaging and localization 124Pricing and Reimbursement Strategies for Diagnostics (From Slideshare) Page 5/7
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