We spoke to the Principal Health Economic Analyst at Medtronic Advanced Energy about the impact of the Affordable Care Act, the rising value of HEOR evidence, and the benefits of developing customer engagement apps in-house.
Can you tell us a little about Medtronic Advanced Energy?
We are one of the business units of Medtronic, under the umbrella of surgical technologies, and we were acquired as two start-ups about four years ago.
What’s your role at the company?
I’m the principal health economic analyst, or health economist. I joined Medtronic Advanced Energy about a year ago, and I run all of the health economic research, mostly running retrospective database studies, but also doing some modeling using publications.
Do you find that your kind of health economic research is more in demand in the field?
Yes, definitely. It looks like that’s the way the market is shifting in the U.S., towards value-based healthcare.
We’re still not at the same point that European countries are in terms of health economic modeling and submissions to HTAs, but Medicare is shifting, especially in one of our largest markets now, orthopedics.
They’re changing the payment structure for hospitals on that, and we’re trying to stay ahead of the curve in terms of having information that’s not just clinical, but also economic in nature.
What other industry trends have you noticed in your area of business?
In the surgery market, the changes I just described are at the top of my mind. There’s an initiative in the U.S. right now called the Bundled Payments program, which means that all care is provided under the same payment, from the day of admission through up to 90 days out, and the hospital is responsible for paying for all of that.
This creates a huge shift in terms of how hospitals are thinking about the value they’re providing during surgery. It’s not siloed to just the O.R. anymore, it goes out well beyond that. This really does require a whole new analysis of how healthcare costs are streaming through the system.
Are these changes connected with the Affordable Care Act? What has the impact of that been?
Yes, that’s part of what spurred these changes in hospital orthopedics. The three main pillars were to expand insurance coverage for everyone, improve quality and reduce costs. Those second two are really why we’re focusing on what we are: showing how we can provide a better clinical outcome at a reasonable cost. Now we have to be cost justifying everything, where before, especially in medical devices, it was more about showing the utility of the device.
Has this also created a more fragmented landscape of payers?
Not necessarily more, but it’s expanded the role of Medicaid in some states. That has shifted things a bit, and the ageing of the population has also put more pressure on Medicare. This is a major focus for Congress, and it’s raising the question of how we can pay for the future of healthcare, given the trajectory we’re on now.
What kinds of payer engagement app are you developing on BaseCase?
We use BaseCase to create interactive budget impact analysis apps for the U.S. market. We have one that is reimbursement focused, which pulls Medicare reimbursement information by hospital, so the rep is able to go in and select by region, state and then down to the hospital level what the reimbursement will be for some of our core procedure areas. That’s something that we expect to be used for targeting more than anything else.
By targeting, do you mean targeting a specific payer?
Targeting specific accounts. So for example the reps might be working in one region and spending a lot of time talking to a surgeon in a particular hospital, and this tool lets them see if that’s the best way to invest their time.
They can use it to see if there is another hospital in that region where our value message might be more effective. This might be for example if they have higher complication rates, it might be that they have a higher volume of cases, maybe they have relatively better reimbursement. It looks at the whole picture of how the hospital is doing from a quality standpoint and then also a payment standpoint.
So, before BaseCase, how did you create these tools?
Before BaseCase we really had nothing. Most of the materials that went to the field were one-page handouts or white papers. I know that one of our marketing managers several years ago hired a contractor to create an iPad app, but it wasn’t really used that much and it was very expensive to do.
That’s where we really sold the team on BaseCase, because we have ownership of the content and it’s flexible, so if we need to modify it because it’s not being used enough, we can do that much more easily that if you are using vendors.
What was the attraction of the software for you?
It was really the ability to create as many apps as we wanted, in-house. The field team’s pretty excited about it; they have their iPads with them all the time anyway, and the apps make some of these clinical studies more approachable for them. They don’t like necessarily reading through a whole health economics study, but if they can just swipe through the app, it’s easier, more useful.
Have you had a lot of feedback from key account managers?
We just rolled out apps for our two main products - Aquamantys and PlasmaBlade - to regional business directors. They were all very excited about it and enthusiastic about taking the apps out into the field.
Are you involved with the development of apps yourself? What has your experience been like?
Yes, I’m using it at the moment, and I’m training our new analyst on the software also. It’s been very easy, the drag and drop format is very intuitive. If I do have more technical questions I can email the support team.
I think the software is great, it’s really solved some problems for us. Being a small division of Medtronic, we just don’t have the budget to contract everything out, and it’s been really helpful to do everything in-house.