The Changing Economics of Medical Technology (1991) / Chapter Skim
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9. Medical Device Innovation and Public Policy in the European Economic Community
9. Medical Device Innovation and Public Policy in the European Economic Community
Pages 141-154
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From page 141... ...
This is the perspective from which the first two sections of this paper review the public policy in this area, the interested parties in policy formulation, and their reactions in different circumstances. The third section reviews the characteristics of European health care systems and the nature of the European medical devices market, and the fourth section examines the potential influences on policy in the European context, using illustrations from different countries.
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From page 142... ...
If resources are drawn into the health sector to develop more medical technology, this may simply switch resources from other sectors of the economy, resulting in transfers of benefit without necessarily producing a net gain (Figure 9.2~. To produce a net gain in social value, medical device innovation must either improve the cost effectiveness of health care by providing increased changes in quality of life per dollar spent or produce equally effective technology at lower cost.
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From page 143... ...
1 INCREASE HEALTH SECTOR BUDGET Also, it must be shown that innovation in the medical device industry is a more effective way of increasing quality of life and productive efficiency than innovation in other sectors of the economy. Parties of Interest The interest groups involved in medical device innovation can be grouped into three categories: manufacturers, health care providers, and government policy makers.
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From page 144... ...
The overuse of expensive diagnostic testing procedures is an example. The policy response might be to fix reimbursement rates below the cost of using inappropriate technology in an attempt to delay diffusion of the more expensive methods.
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From page 145... ...
The third case involves a technically feasible and socially acceptable technology, area (a) , for the use of which public health care funders are reluctant to reimburse and private demand is insufficient to produce economic viability.
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From page 146... ...
in the United Kingdom, where tighter restrictions on public funds available for acquisition of the new technology severely affected its marketability and the apparently less dramatic nature of the innovation reduced public interest in raising charitable funds for its purchase. Whereas the responses of government and industry to the existing situation will focus on increasing the marketability and cost effectiveness of technology, both parties will be pursuing long-term policies to alter the domains of Figure 9.4.
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From page 147... ...
The essential feature of the organization of these systems is that payment to individual health care institutions, such as hospitals and individual doctors, is not related directly to the number of patients treated.2 In the United Kingdom and Ireland a small proportion of funding comes from user charges, but the bulk comes from national taxation. Although the administration of the system is decentralized through regional and district structures, the national budgetary system gives the central government very strong control over total spending on health care.
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From page 148... ...
THE EUROPEAN MEDICAL DEVICE MARKET The European market for medical devices is characterized by a high level of intercountry trade; a strong overseas presence, particularly by United States companies; and a concentration of production in many submarkets with a small number of large multinational companies producing a large proportion of the output. It was estimated in 1985 that Europe represented 25 percent of the world market for medical devices, which was worth around 30 billion dollars.
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From page 149... ...
In the development of the lithotripter in West Germany, the Dornier Company received research grants totaling 8.9 million German marks over an 8-year period from the Ministry for Research and Technology. Because of the expected cost effectiveness of the equipment in comparison with surgical techniques for the treatment of kidney stones,
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From page 150... ...
Products from approved companies can then be marketed to the U.K. Health Service (provided they meet conventional international electrical safety standards)
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From page 151... ...
This has the advantage of applying to all users of the devices in both private and public sectors. Even in West Germany the continued rise in health care costs has led to restrictions on the approved applications of techniques such as MRI and more careful consideration of the level of reimbursement (18~.
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From page 152... ...
The development of the Community's role in industrial policy carries further implications for the medical device industry, which is dominated by multinational companies. The ability of national governments to control such companies is declining, but an active community anti-trust policy could have a stronger influence.
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From page 153... ...
An overview of the systems and regulations concerning medical technology and the diffusion of six technologies. In Stocking B (ed)
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From page 154... ...
1989- Year for big decisions in the active implantable medical devices directive. Clinica 1988;383: 12.
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