Managed Care and the Evaluation and Adoption of Emerging Medical Technologies

by Steven Garber, M. Susan Ridgely, Roger Taylor, Robin C. Meili

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Abstract

New medical technologies — pharmaceuticals, medical devices, and procedures — often allow great improvements in the outcomes of medical care, but they are also widely believed to be a major cause of increasing costs. Selective adoption of new technologies is crucial in the quest to control health care costs while preserving or enhancing the quality of care. This report focuses on evaluation and adoption of innovative procedures and medical devices by managed care organizations (MCOs). The project had two primary objectives: (1) to understand current MCO processes for making coverage, medical-necessity, and payment decisions and how device developers and manufacturers prepare for and participate in these processes; and (2) to identify ways that private, voluntary action by the managed-care and medical-device industries might improve — for the benefit of society — these processes. The core data are from confidential interviews with eight companies that develop and manufacture medical devices and medical directors of nine MCOs. The findings should be of interest to medical-device developers and manufacturers, managed care organizations, public-policy makers, and researchers and analysts. A major impediment to socially appropriate adoption of emerging medical technologies is limited information about the performance of these technologies in day-to-day medical practice. The authors discuss prospects for improving four elements of information availability:

  1. Developing better information before market introduction
  2. Learning more from experience after market introduction
  3. Evaluating and synthesizing clinical information
  4. Disseminating information.

They also discuss several other issues that warrant consideration:

  • Aligning private incentives of MCOs and payers with social values
  • Enhancing MCO capabilities to evaluate technologies and make decisions
  • Improving decisions by physicians
  • Reducing use of inappropriate or obsolete technologies
  • Reducing costs of decisionmaking for manufacturers and MCOs
  • Improving manufacturer understanding of the market environment
  • helping MCOs and employers anticipate what is in the pipeline.

Table of Contents

  • Preface PDF

  • Summary PDF

  • Acknowledgments PDF

  • Chapter One

    Introduction PDF

  • Chapter Two

    Technology-Adoption Decisions by MCOs: An Overview PDF

  • Chapter Three

    How Device Manufacturers See the System PDF

  • Chapter Four

    How MCO Medical Directors See the System PDF

  • Chapter Five

    Advice for Manufacturers PDF

  • Chapter Six

    How Might Technology Adoption be Improved? PDF

  • Appendix A

    Project Description for Prospective Interview Respondents PDF

  • Appendix B

    Description of Interviews with Device Manufacturers PDF

  • Appendix C

    Description of Interviews with Managed Care Organizations PDF

  • References PDF

Research conducted by

The study was conducted within RAND Health.

This report is part of the RAND Corporation monograph report series. The monograph/report was a product of the RAND Corporation from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

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