The Change in the Device Coverage Landscape

Dennis P. Scanlon, PhD: These things carry with them tremendous change in the marketplace. So, recently, UnitedHealthcare and Medtronic established an agreement that would transition most adult UnitedHealthcare enrollees to Medtronic devices. How has that decision affected the landscape? Are we moving toward, essentially, a situation where we’re going to have formularies for devices just like we have formularies for drugs?

Robert Gabbay, MD, PhD, FACP: Sadly, I think so. And “sadly” is my viewpoint. I think it’s somewhat inevitable, because there will be competition around price. The same kind of things happen in the pharmacy world. I don’t see why it won’t happen in the device world.

Dennis P. Scanlon, PhD: Is it really, “sadly,” or if we have things that are relatively homogenous, should we be making selections based on it?

Kenneth Snow, MD, MBA: Well, I think that is really what’s going to be the key element of this. There’s a long history of this in the pharmaceutical setting, where, if there’s 2 drugs out there (both of which have the same effectiveness and are more or less equivalent), a selective formulary that allows one item to be cheaper (which gets translated both for member cost and also for payer cost, which ultimately is premium) clearly can be of benefit without a detriment to care. But with devices, if there’s a difference between them, as Mary Ann was saying earlier, that becomes a much more complex issue. And so, by limiting the formulary on a device, is it really equivalent? Or have you limited out a particular device that maybe does add a benefit?

Dennis P. Scanlon, PhD: That goes back to your point, Dr Kaufman, about technology in the interface with individuals.

Neal Kaufman, MD: Depending on who the person is, it may be an unimportant difference. It also matters if you think about population health or personal health. Our goal is, as physicians, to help that person who’s in front of you. Our goal, as population health people, is to have the most people at the lowest cost, get the best outcomes. And those are going to conflict in almost all cases. How we, as a health system, ration (if you want to think of it that way), choice, and how we ration access to certain elements of a medical treatment, is what will keep us having an affordable, scalable, maintained health system. Or, one that’s completely out of control. I think it’s that delicate balance that I’ll stay out of trying to make.

Dennis P. Scanlon, PhD: Do we see payment models changing, too, to be more focused on outcomes? Really, it’s about, what result does one deliver? And we see that now in pharmaceutical and some other forms of payment as well.

Mary Ann Hodorowicz, RDN, MBA, CDE: Value-based payment.

Kenneth Snow, MD, MBA: Without a doubt. It is the direction that the payer industry is moving toward. It’s the direction that many pharmaceutical companies have already moved toward. And the device companies are looking that way as well. The idea of just paying for your treatment is one that was there in the past, but more and more, the question is, is there a value from your drug or from your device? Regardless of what it is, is it adding value in terms of either less expensive care or better care? It doesn’t have to be both.

Robert Gabbay, MD, PhD, FACP: And that’s, maybe, where one of the big controversies out there is—that we, traditionally in diabetes, only measured A1C (glycated hemoglobin) as a measure of

improvement. And I think there’s really, this big movement to move beyond A1C. So, if you reduce hypoglycemic episodes, that’s probably a good thing, and that should be a metric as well.