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The Price of Medical Technology: The Industry Perspective. David H. Nexon Senior Executive Vice President. November 04, 2008. About AdvaMed. World’s largest medical technology association 1,600+ member companies and subsidiaries. Members produce 90% of sales in domestic market,
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The Price of Medical Technology: The Industry Perspective David H. Nexon Senior Executive Vice President November 04, 2008
About AdvaMed • World’s largest medical technology association • 1,600+ member companies and subsidiaries • Members produce 90% of sales in domestic market, • 50% of sales in global market • 70%+ of member companies have less than • $30 million in annual revenue • 65 staff with global expertise, bi-partisan backgrounds • 45 member Board of Directors including 5 from smaller companies
Technology: the Economic Value Source: William D. Nordhaus, “The Health of Nations: The Contribution of Improved Health to Living Standards,” in Kevin M. Murphy and Robert H. Topel, Measuring the Gains from Medical Research: An Economic Approach, University of Chicago Press, 2003.
Technology: the Human Value Change In Selected Health Indicators 1980-2000[1] • Life expectancy increased 3.2 years • Disability among the elderly declined 25% (and is saving Medicare $73 billion annually) [2] • Mortality from heart attack was cut by 50% • Mortality from stroke was cut by one-third • Mortality from breast cancer has been cut 20% [1] Medtap, The Value of Investment in Health, 2002. [2] Kenneth G. Manton, et al., Journal of Aging Health, 2007; 19; 359.
Medical Devices: A Relatively Low and Constant Share of National Healthcare Expenditure Source: Roland “Guy” King, Estimates of Medical Device Spending in the United States, AdvaMed 2007
Medical Devices: A Price Competitive Industry Source: Roland “Guy” King, Estimates of Medical Device Spending in the United States, AdvaMed 2007
Hospital price increases have outpaced device price increases General medical and surgical hospitals Surgical appliance and supplies manufacturing Surgical and medical instrument manufacturing Electromedical apparatus manufacturing Source: US Department of Labor, Bureau of Labor Statistics, PPI Industry Data 2003 earliest year available for General and medical surgical hospitals
Medical Technology is Not Driving Hospital Costs Source: The Lewin Group analysis of American Hospital Association Annual Survey data, 1998 – 2003, for community hospitals; Centers for Medicare and Medicaid Services, Office of the Actuary; Medical Expenditure Panel Survey
Costs of Goods and Services Purchased: Key Components Medical Technology is Not Driving Hospital Costs Wages & Salaries/Employee Benefits – 37.7% Costs of Goods and Services Purchased 52% ($67 B) Prescription Drugs – 3.1% Professional Fees – 2.9% Prof. Liability Insurance – 0.3% All Other – 8.0% Source: The Lewin Group analysis of American Hospital Association Annual Survey data, 1998 – 2003, for community hospitals; Centers for Medicare and Medicaid Services, Office of the Actuary; Medical Expenditure Panel Survey