How The ACA, Regulations, And Other Trends Are Reshaping The Medtech Industry
Med Device Online recently had the opportunity to talk with Claudio Bellini, COO of COSMED USA. Founded in 1980, COSMED is one of the largest cardiopulmonary and metabolic diagnostics manufacturers in the world. It equipment is used in clinical and research applications in hospitals, primary care facilities, universities, research centers, clinical trial organizations, and sports medicine centers, among others.
Over its nearly 35 years in business, COSMED has witnessed its fair share of changes in the healthcare landscape, providing Bellini with a unique point of view on the major trends shaping today’s — and tomorrow’s — medical technology industry. During our conversation, Bellini shared his thoughts on the impact of the Affordable Care Act, how the FDA compares to international regulators, the role of 3D printing, medical device connectivity, and a variety of other timely topics.
Medical Device Online (MDO): What impact do you foresee the Patient Protection and Affordable Care Act (ACA) having on the U.S. healthcare system and on medical device companies like COSMED?
Claudio Bellini: The ACA will implement many significant changes affecting the insurance and medical industries, as well as the delivery of healthcare to patients in the United States.
The common themes in all of ACA’s reforms are accountability, efficiency, and quality. These are the three cornerstones driving healthcare reform efforts in anticipation of the nearly 35 million uninsured that will enter the market under the ACA insurance mandate. We have in front of us truly transformative years in the healthcare industry.
The ACA will increase consolidation in the medical device industry and favor innovative companies. Those companies that focus on personal diagnostics and monitoring, preventative healthcare, medication maintenance, infection control and effective high-end therapeutic devices, and capital equipment will benefit. Reform will hurt smaller companies in low-end, commodity segments with undifferentiated levels of efficiency, who will be put under increasing price and profitability pressures by the new law.
Hospitals will see an increase in the volume of patients — and significantly more insured patients — but they will be required to improve quality of care and cost efficiency. Future providers’ revenues will have less to do with patient volumes and more to do with clinical outcomes. Providers that achieve good outcomes for their patients and keep costs in check stand to be rewarded with performance bonuses and shared savings. Those that do not can expect financial penalties that will affect revenues and tarnish their credit profile.
For example, the new pay for performance fee structures will reimburse, to a limited degree, according to the quality of care provided. For certain conditions there will be bundled payments across specialty and primary care providers and other healthcare professionals. Disproportionate Share Hospital (DSH) payments from Medicaid for care provided to the uninsured will be reduced, and providers will be exposed to penalties for re-admissions and hospital acquired conditions
One of the drivers of the ACA is its potential to make primary care providers more accessible. A stronger primary care system in the United States will improve the quality of healthcare services and slow the rate of health care spending. With stronger primary care, people will be more likely to receive recommended preventive care and timely care for medical problems before they become serious and more costly to treat. Healthcare reform also aims to expand and train the primary care workforce, improve provider reimbursement and patient incentives for primary care services, and support innovative approaches to delivering care.
There’s going to be a much greater emphasis on teamwork going forward with the ACA. Accountable care organizations (ACO), for instance, are structured so that there are incentives for hospitals, physicians, and nurses to work together in a more integrated way. By bundling payments, ACOs bring hospitals, specialists, and primary care organizations together, and reimbursements will have to be divided.
We also expect that the medical device sectors related to the screening and prevention of chronic diseases and the improvement of public health will grow more. ACA aims to promote healthier lifestyles for all Americans and to prevent disease and disability with the creation of the National Prevention, Health Promotion, and Public Health Council that will devise a national prevention strategy, backed by a $13 billion trust fund. Evidence-based clinical preventive services will be provided in most public and private health insurance policies without cost-sharing.
MDO: What improvements in the regulatory process must be made to ensure innovative new medical technologies reach U.S. patients more quickly?
Bellini: Currently, the FDA review process is almost twice as long as that of its European counterpart, the European Medicines Agency (EMA), for devices not requiring clinical data. And it is almost three times as long for devices that do require clinical data. To compete with regulatory bodies outside the United States, the approval process must be made more predictable, consistent, and timely, while continuing to assure that products are safe and effective.
MDO: How does COSMED stays ahead of changes in the regulatory landscape?
Bellini: We are engaged in two main technology areas: metabolic, for cardiopulmonary and indirect calorimetry testing devices, and air displacement, for body composition testing devices. We develop and manufacture our air displacement products in California and our metabolic products in Rome.
In each research center, we have a regulatory team that follows the specific requirements for their technology. We act globally but with teams specifically focused by technology. In this way, we are able to gain access to information that helps us stay up to date on the latest changes to standards, current industry trends, and forward-looking resources that can help us prepare for what lies ahead.
MDO: What emerging trends in the healthcare industry are having the biggest effect on the design of medical devices?
Bellini: In general, the demand for medical products and medical devices is expected to rise as the insured population grows and demands more services, and as the growing population of elderly patients inside the system uses a larger portion of those resources. This second number is significant for the health care industry, because the elderly use a disproportionate amount of health resources.
More specifically, we have identified three emerging trends that we are working to address at COSMED: connectivity and data sharing, prevention diagnostics, and hospital efficiency. We recently launched three new products to address each of these respective trends.
To address the connectivity and data sharing trend, we developed the OMNIA software platform, which seamlessly integrates all our instruments. The platform is based on the latest Microsoft environment. It is web, touch screen, and tablet ready, and offers the capability to wirelessly transmit test data, equipping COSMED instruments to be used via mobile device technology both in the clinical (diagnostic) and research environment.
The K5 mobile cardiopulmonary exercise testing system meets the trend of prevention diagnostics. This next-generation wireless system for cardiopulmonary gas exchange analysis features multiple testing modalities, integrated GPS, barometric altitude sensing, and a three-axis accelerometer. Its advanced technology, compact design, light weight, and portability (completely wearable) allows for measurement of physiological response without exercise limitations.
And on the hospital efficiency front, the QUARK RMR ICU indirect calorimeter allows measurement of energy requirements in mechanically assisted patients. This solution is compatible with many ventilators in the market (connection through the exhalation port) and allows accurate measurement of energy requirements of patients in intensive care units. Automatic bias flow detection allows a constant calibration of analyzers and flow meters, and the use of disposable filters reduces sterilization requirements to a minimum.
MDO: Which medical sectors have the most potential for growth over the next five years?
Bellini: Medical devices that can have an impact on reducing re-admissions, decreasing hospital acquired conditions, and screening and preventing chronic diseases will experience the most growth. Technologies that will facilitate teamwork and communication (software/devices) will also benefit in this healthcare environment.
For example, products that are less invasive, allow for connectivity or remote care, decrease time spent in hospitals, or reduce readmissions and recovery times will help reduce the overall cost of medical care, and thus will prosper in the futures
With ACA’s focus on preventive medicine, the increasing demand for quality clinical outcomes, and the expanding need for connectivity, we see new opportunities opening in wireless patient testing, patient monitoring, and health management.
MDO: Does COSMED employ 3D printing in its product design process? How do you see the technology affecting the development of future medical devices?
Bellini: 3D printing is a very fascinating area. There are probably possibilities for the technology that we don’t even understand right now. There are already attempts to create biomedical implants using 3D printing — much more sophisticated applications than ours, which I consider more “industrial design.”
At COSMED, we use 3D printing to create new shapes and structures and new combinations of materials for our products. We reduced our prototype costs as much as tenfold through 3D printing, ultimately translating into shorter time to market and better industrial design. For example, our new K5 mobile cardiopulmonary exercise testing instrument has been developed in large part using 3D printing to create new shapes, structures, and combinations of materials.
I think we are still learning how to fully benefit from 3D technology, and we can definitely do more with it in product development and probably also in manufacturing.