Value-Based Care: A Review of Key Challenges and Opportunities Relevant to Medical Technology Innovators

Abstract

Developed countries struggle with high healthcare spending, and cost is often cited as a barrier to the introduction of new patient care technologies. The core objective of this review article is to help familiarize medical technology innovators with trends in the health economic environment and the implications for the adoption of new technologies. We review and discuss this topic in language accessible to medical technology innovators. We assess macrolevel developments in healthcare spending and highlight measures already taken to control spending. We discuss practical implications for anyone involved in healthcare innovation. Two observations are central to this discussion: (1) the U.S. spends significantly more on healthcare per capita than any other developed country; (2) across developed countries, healthcare spending has risen steadily over the past two decades. Nevertheless, higher spending has not always led to improvements in health. As a result, innovators need to be prepared to navigate an outcomes-oriented and value-based environment that is being defined by the emerging requirements of various healthcare stakeholders. Practically, new products should aim to improve health outcomes at a cost deemed “good value” and/or reduce cost for one or multiple stakeholders. Opportunities also exist for tools that enable cost/outcomes tracking, which will help demonstrate value to providers, insurers, and patients.