Transcript
English (auto-generated)
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Music]
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thank you very much for joining us for this webinar my name is Dan Trajman and
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I’m the CEO of NEIBC which stands for New England Israel Business Council we are
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not-for-profit organization with the primary mission of facilitating
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and managing the business relationship between Israel and Massachusetts
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before I start and introduce the speaker today I would
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like to introduce she has joined me in producing the
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series of the three webinars and she’s going to manage the QA session
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following the presentation if you have a question please use the chat button and
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the questions will be answered at the end of the presentation with that I would like to introduce the speaker
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today David Barone. David is a co-founder and a principal at Boston med tech advisors
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David has over 35 years experience in healthcare including management both
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Technical and operation strategic planning marketing and business development
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currency is focusing his activities on advising and assisting U.S and offshore Medical Technology
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organization ranging in size from startup to Fortune 500. the areas that he’s focusing in
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are opportunity analysis marketing strategy and Market development
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reimbursement strategies and business development and financing
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prior to co-founding bmta David Health senior management positions in a number
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of medical device companies and has founded financed and developed a number
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of healthcare companies David received his graduate degree in
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biomedical engineering and his MBA from Rensselaer Polytech Institute in New
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York and with that I would like to invite David to the podium David the
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party museums Dan thank you very much for the kind introduction I’m glad uh
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to join this webinar the title is a formal title for the webinar today is
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reimbursement as a driver of valuation the more important title is the next
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line it’s actually understanding why developing reimbursement strategy is a
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critical function for med tech companies before we start just few words about
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Boston Medtech Advisors. We started about 19 years ago we worked already with over
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400 companies in all areas of Medical Specialties this is a partial list which
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I won’t get into the details right now the more important thing is to understand that what we are doing
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because that will create the context for this discussion today we are supporting companies to introduce
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that are trying to introduce new companies uh that are introducing new technologies
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more important we also work with them on increasing the likelihood that the
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technology would be adopted and I’ll talk about this in a few minutes but to get adoption companies need to
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understand not only the technology and the regulatory part but you need to
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understand how the technology will fit in the marketplace they need to understand the drivers for adoption
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which include reimbursement clinical evidence uh workflow and so on and
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understand the barriers for adoption there are many factors that affect those things and they all intertwine
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after that brief introduction let’s jump right away to the agenda today which is a fairly long agenda I’ll touch on
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number of issues here one is I’ll talk a little bit about what I consider to be business realities or explain why
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reimbursement is even important for early stage companies then we’ll talk a
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little bit about codes and coverage with the very Basics then we’ll explain how
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money flows to providers in that market and then we’ll move to talk about uh the
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changing landscape of reimbursement in the U.S and following all of those
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discussions what does it all mean to companies that are developing new technologies and if we have time we’ll
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touch also a couple of case studies so business realities or why
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reimbursement is even important so every company is a developed technology developer business plan that
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has something that looks like the blue line essentially suggested at a certain
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point of time they introduce the technology and after a reasonable period
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of time the technology gained adoption and what is adoption adoption is a state where or a time where a subset of the
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market is using the technology on a regular basis it’s beyond being an adult
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used by providers the reality is that the vast majority of
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Technologies said are being introduced to the market never reached this blue
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line or something similar to this they are much closer to that green line the Technologies never reach adoption they
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remain episodic or even worse so it’s all small subset of Technologies
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less than 10 percent said gain market adoption and generally it takes them
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longer to do this than uh than have been anticipated early on
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so I often talk about what I consider to be the adoption paradox
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which is the need for new technologies is increasing all the time but yet it is
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increasingly more difficult to gain clinical and market adoption so we have a schizophrenic approach here to the
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market the market needs Technologies but creates many barriers to adoption
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if you look at the Blue Line as a blue arrow it depicts the time to Market and
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the time to Market has increased over the years over the last 20 30 years
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somewhat time to Market is from the moment we start developing the Technologies until we get FDA approval
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to be on the market to do this we need to demonstrate safety and efficacy and because Technologies and applications
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are becoming more complex than demonstrating efficacy takes longer
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it’s a dramatic change is the time to adoption if we go back to the late 90s you can
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see that the time to adoption was short after time to Market if the
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technology worked and we had a sales force and we had some data that demonstrates that we get appropriate
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results or outcomes then people started to use it providers started to use its
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hospitals clinicians Physicians and so on and then gradually we have seen more and more barriers or more and more
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elements that require to meet adoptions being introduced reimbursement is obviously a big part of
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it and not only is it the barrier to reimbursement has been introduced about
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20 25 30 years ago but the bar for gaining reimbursement the requirements
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are getting larger and larger outcome data if we needed to demonstrate
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some limited data now we need to demonstrate multiple studies on larger populations followed for
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longer period of time before clinicians are ready to use them and it’s not only to have reimbursement and to demonstrate
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outcome we now more and more providers want to see comparative assessment data to see how our technology is compared to
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other methods especially considered to be those considered to be the gold standard or the established practices
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another way to to look at the dynamic of the market is the famous more
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chart that shows that companies products can
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introduce Market initially they appeal to the innovators or to the early adopters but at a certain point of time
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they hit a Chasm and in our business in the healthcare business the chasm is
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really uh represented or to overcome the chasm we
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need to have significant amount of clinical evidence and we need to have reimbursement for
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the vast majority of the Technologies in order to reach the main Market
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so the longer time to adoption has considerable business implications it delays the revenues it means that we
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need to have more more funding grounds uh the valuations are negatively
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impacted in the earlier rounds because investors knows that we’ll need much more money and it will take longer
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Business Development initiatives the strategics and so on are sitting on the dot on the sidelines uh until we can
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demonstrate some market adoption and during that process we have
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increased risk of new competitors and new methods new technologies introduced to the market and uh
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replacing what is that that we are offering
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so reimbursement uh is the key to market adoption
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and the question is what does it mean to have reimbursement it means number of
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things the technology or procedure is covered by payers the coverage not only that they provide
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coverage but the coverage is sufficiently Broad it it’s applicable to
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sufficient number of patients it’s not overly narrow and the payment offered by or agreed to
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buy payers is appropriate which means it has to cover the cost of the Physicians the hospitals the whole provider chain
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the Distributors and the manufacturers everyone has to get a piece or is receiving a piece of
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that payment it is important to recognize that
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favorable reimbursement doesn’t guarantee utilization of the technology there are
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many many products and services that have very good reimbursement and no one
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is using them but the opposite uh we have to recognize
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the lack of reimbursement generally will impact utilization and will impact it
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adversely
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so let’s jump to codes and coverage so
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actually the word reimbursement is an informal terminology
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the formal terms that are being used in the industry are codes coverage and
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payments the codes really identifiers or procedures and devices it just a way to
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uh to represent in a number of digits
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typically five digits what is that said we have done as providers
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the codes are Universal the entire industry all pairs all providers are using the same set of codes
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coverage defines the terms of conditions for payment
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each payer generates a coverage policy for every procedure
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so now we are moving from Universal to non-universal activities
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the payments is how much is actually being paid by the health plan and that
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one is even less consistent because it’s not only pair specific it’s very often
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also provider specific payers will negotiate with the payers how much they are going to pay for different services
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codes there are lots of codes and the different sets of codes and I’m not even
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going to cover everything I’m just going to talk about the major categories of
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codes terms that probably most of you or all of you have heard before starting
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with the ICD ICD codes standing for international classification of diseases they are as
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you can see about 70 000 codes that describe different diagnoses essentially
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conditions or medical conditions of patients and about seventy thousands
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type of procedures being done the ICD-10 are published by the world
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health organizations they are used in all insurance claims every insurance claims have to describe the appropriate
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ICD-10 which suggests what is that said what is the reason we
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provided a service or gave a product to a patient
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the ICD-10 by itself doesn’t Define payment and doesn’t Define coverage it’s
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just a description of a procedure or a diagnosis
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dear jeans they’ll use codes set of codes that are used for inpatient care
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in United States the Stanford diagnostic related groups
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there are over 700 groups
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the drgs are actually standardized or defined standardized prospective
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payments prospective means a priority the hospital knows how much they’ll
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receive for caring for a patients based on the
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principal diagnosis of the patient the procedures the principal procedures that
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is provided to the patient the surgery ICU Etc and the set and the
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comorbidities of that patient so it’s a complex very complex formulas but the
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important thing is to know that the drg the payments to hospitals are not based
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on the actual cost of treating a patient but on an average cost for that
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drg the other important I think understand
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is the Energy payments cover all charges associated with an inpatient stay
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everything with the exception of payments for Physicians results that are
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here from non-us uh companies
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this is different the drg is very common now in many of the European countries and in other countries around the world
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but in most countries The Physician payments are included as part of the drg that’s not the case in United States
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the other set of codes Healthcare common procedure coding system renounced
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hectics when we want to abbreviate it those codes describe there are multiple
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groups of hectics codes but generally they describe items supplies products
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and non-physician services that are not covered by payments for other services
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so if uh
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if an x-ray or if a medication is provided to a patient inside while he is
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in the hospital uh then that uh medication is part is
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covered through the drg if it’s provided to a patient outside the hospital then
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it would be covered based on the hypix code assigned that medication thick pics
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code are maintained by Medicare but they are used by the entire industry the
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updated very often quarterly and as I mentioned there are different groups of codes this is just a partial list that
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you have there for supplies durable medical equipments uh drugs Lab Services
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Etc there are all kinds there are about 15 different code groups
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CPT very important they’re used to report medical Surgical
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and diagnostic procedures and services provided by physicians or as a qualified Healthcare Providers whether those
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services are provided for inpatient or for an outpatient once a physician or a qualified
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healthcare provider provides a service they use to CPT to describe that service
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there are over 10 000 CPT codes there are many American Medical Association
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again used by the entire industry
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recent initiatives for new codes include remote monitoring and therapeutic services Digital Services AI based
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Technologies software only devices Etc so the AMA went to DC
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developments requests for codes in new categories of products based on new
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technologies to try to put all of those things to create a structure for those
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codes there are
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two primary categories for category of for CPT codes is a category 1 and
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category three I’m skipping category two because it’s insignificant
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category one is the primary CPT code so this is a
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permanent codes obtaining a category one
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requires the applicants to meet significant requirements including this
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is not a complete list but including there need to be multiple Publications published papers describing the use of
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that technology at the time of the application they need to be already an active user user base
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with a technology in the US and there need to be a support of the
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respective professional societies the important thing to understand is
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while a category one is issued reimbursement is not guaranteed but it’s
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more likely by most payers because there are so many requirements for getting the code in most cases it will also satisfy
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not always but in most cases it will satisfy the requirements of the pairs
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Category 3 was assigned or was formulated in order
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to help companies introduce products and start developing reimbursement before
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they meet the requirements for category one so it’s typically assigned to emerge
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Technologies they are defined as temporary codes they can be used up to five years unless you
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ever played earlier by category one code so the expectation is that category 3 would be there in the beginning and once
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the company or the sponsor can meet the requirements for a category one then
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category then the Category 3 is deleted and category one takes over
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category three uh provides a mechanism for reimbursement
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but even if it’s reimbursed it will generally be limited coverage and the
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reason is that there’s limited evidence at that point of time pairs are more careful whether they want to cover it or
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not yet most new technologies today start with categories three
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uh it takes generally years to get to its requirements for category one so
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meanwhile most companies point out found out that they are benefiting by having a category Street to start with
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I’m not going to go through all this chart by developing a category one is a
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long process it takes about two years from the start to end if everything goes
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well Category 3 if you just look at this chart Category 3 essentially is only the
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top third it’s a process for Category 3 and category 1 initially are very
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similar the requirements are different but the process is similar but once we
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are done with the upper with a gray block blocks on the top a category three
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could be issued category one at that point will take at least another year
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coverage
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code doesn’t imply coverage two different things also FDA approval
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doesn’t guarantee coverage by payers some people are surprised once you get FDA approval to find out that pairs
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expect FDA approval but it’s required and completely insufficient to issue
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reimbursement to to initiate reimbursement the reason is that if
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[Music] tended to allow the marketing of the22:57
product heirs say you can Market it but that doesn’t mean necessarily that we
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should pay for this we have to decide whether to cover the device or the respective procedure
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respectively FDA approvals request demonstration of safety and efficacy
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it’s a very objective uh based on scientific data
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payers coverage decisions assess clinical outcomes it’s a very subjective
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process and it’s essentially interpretation of the Clint of the strengths of the clinical information
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how do we know it’s very subjective we present I mentioned before the coverage every payer will determine their own
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coverage policy we can present the same evidence to three different pairs and
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one pair will decide to cover the new technology another pair will decide
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absolutely not to convert or consider it to be still experimental from zero point
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of not from regulatory point of view and the third payer will decide to cover but
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very very narrowly maybe after everything else has failed
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here as a player we’ll talk about Medicare versus all the rest Medicare
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coverage decisions are governed by law by Statute and the statute states that
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reasonable and necessary for that Medicare has to cover everything that is
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defined as reasonable and necessary for the diagnosis or treatment of illness or
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injury it’s a very broad definition and like every laws there are lots of regulations
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and interpretations that have been developed over the years by CMS to try and explain what that
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means or Define other their interpretation of the law and that keeps changing all the times
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the important element here is to understand that the law doesn’t allow Medicare to consider the
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economics of the product in their decision their decision has to be based
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on this reasonable and necessary definition at least not formally
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because as the head of the coverage group within Medicare one time
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he said David you know we’re in Washington we have Chinese walls between
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us and the people that deal with the money but in Washington
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everyone else other than Medicare said their own criteria for coverage
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and generally say look at or try to assess whether the new technology or the
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new procedure improves Health outcomes and how is the new technology or the new
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procedure vis-a-vis established alternatives
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everyone else but Medicare will consider and thus consider the clinical elements
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and the economics of the procedure at the same time but when they publish their decisions
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they’ll never talk about economics if they don’t want to decide to cover something because of the economics
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they’ll always find that the clinical evidence is insufficient
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so how’s the money flowing to providers first few numbers
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United States spends about four and a half trillion dollars on Health Care
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each year that translates to almost fourteen thousand dollars per person every single person in United States
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uh but the numbers are not consistent obviously they change by age they change
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by medical situation and they change by geography Utah for example is the lowest
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Healthcare Market in United States and the average cost in Utah is a little bit
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more than half of the national average so obviously there are states that are much more expensive than these numbers
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are using than this the Thirteen thousand dollars who is spending the money
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uh federal government state and local governments spend a little bit less than
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half of the money and everyone else businesses individuals any other sources
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private sources spend a little bit more than 50 percent of that money
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so if we take a very high level view of how insurance is structured in the
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United States they are in the middle there is a public insurance which is Government Federal
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Government or local state governments their private instruments on the left
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side and there is a group of uninsured in United States which is hovering
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around 10 percent of the operations
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so the three different categories the largest three categories one is Medicare Medicare is a federal program so that
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means it’s paid its match by Washington DC it’s standardized for everyone that
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is covered by Medicare and those are everyone that is over almost everyone in the United States it is over 65 years
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old and those are younger but it would be permanent disabled they can be covered
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by Medicare at the younger age overall Medicare covers a little bit less than
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20 percent of the population about 40 percent are now covered through
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plants called Medicare Advantage which is essentially rather than Medicare covered directly the patients Medicare
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Advantage or Plans offered by commercial payers to Medicare beneficiaries but rather
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than the patients or the beneficiaries paying the premium Medicare essentially
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takes the monies that they allocate for that individual and tell the commercial
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period will pay you and you cover that individual the advantage the
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Medicare Advantage plans have to cover everything that Medicare is
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covering but they have the latitude to cover additional things if they want to
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so Medicare Medicare Advantage actually is growing fairly rapidly uh it probably
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would be within number of years it would be the majority of the patients the government is pushing real hard to
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Transit transition patients to Medicare Advantage plans Medicaid or plans administered by States
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so there are 50 Medicaid plans in United States each state has its own plan
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they’re intended to cover the lower income population who is who is entitled to be covered is
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defined by each state and each state also Define what they cover for those
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people there’s a special program for children uh that don’t meet the general criteria
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for Medicaid but are not covered by their parents insurance for one reason or another for
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example maybe their parents don’t have insurance so the government the local government or the states will cover the
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children overall Medicaid covers about 25 percent
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of the population it’s very sizable portion and all the rest are commercial and
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private insurance plans the majority of them are funded by employers at least
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the majority of the insurance is funded by insurance and others that don’t work
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in a place that provides health insurance they need to get their own
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self uh self-insurance and as I mentioned about 10 of the
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population uh ten percent of the people in the United States don’t have any insurance
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so you have here another more detailed breakdown of who pays uh you see that uh
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Medicare and Medicare the numbers here are not consistent they are taken from different sources but I’ll focus on the
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right curve which is important it it demonstrates it’s what what was
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happening in healthcare in United States if you look at the period for 1960 and
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1986 teacher Healthcare in United States
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moved from essentially tripled every 10 years and since the 90s which was when
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Managed Care was introduced in United States and today they almost over 95 percent of the population in United
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States is covered by one version of a managed plan managed
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healthcare plan one of the tribes one of the categories say slowed down the increase cost or the
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increased expenditures but they are still jumping up fairly quickly and you can
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see that from the link is the posture costs essentially have
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doubled every 10 years how is the money being spent
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there are lots of different facilities there are community-based healthcareers there is acute care hospitals there is
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long-term care post-acute care uh you know and there are many more types
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of providers that even shown in this little short but generally speaking hospital
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care hospitals are receiving about 30 percent or consuming 30 percent a little
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bit more than 30 percent of all the health care expenditures in United States over you know about almost a
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trillion and a half dollar Professional Services those are all the physician offices and related home care
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you can just go through the list and see
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this multitude of payment systems multitude of considerations
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lots of providers positions being paid separately than
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hospitals etc etc makes the whole system very complex and as was quoted by Dr Ezekiel
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Emanuel who was one of the architects of so-called Obamacare Affordable Care Act
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that became that was legislated about 12 years ago he said the American
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Healthcare System is a patchwork of different Arrangements very confusing to navigate and that’s a very very modest
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understatement describing what’s happening in United States
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just a word about how manufacturers of medical products being paid in most
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cases they don’t Bill insurance companies so it goes through distributors or sell directly to any one
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of the providers could be hospitals it could be nursing homes it could be Physician Offices
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etc those people use a product and then Bill insurance
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plans the insurance plan
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provides them they submit claims they receive money from the insurance and
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part of that money is then flowing back to the manufacturers
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is reimbursement environment finally changing in United States maybe and maybe instead of writing maybe should
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right now likely so first again few numbers United States
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spent over 18 percent of its GDP gross domestic product essentially almost
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one-fifth of the economy is devoted to health care in United States and you can
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see the increase here over the years it continued to go up and up and up in spite of all the effort to curtail this
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curve just for comparison the second highest or the second most expensive Healthcare
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Market in the world is Germany and they spend less than 12 percent
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and the average for oecd is less than 10 percent is about nine and a half percent
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is for example is spending about seven and a half percent less than half of
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what United States is spending not only is it United States spent a lot on
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health care which is really a macro economic Factor but it translates to
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every individuals in United every individual in United States if you look at the inflation over 20 years period uh
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you can see what happens to uh to health care expenses versus other sectors in
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the in in the in the industry or in the market I’m sorry uh food apparels we
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know that electronic software is going down or the unit cost is going down well
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it helps continue to go up and that translates to everybody’s
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pocket even when people are insured sorry about that if you look at the chart below you can
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see what happens over a 10-year period uh to uh overall inflation that doesn’t include
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obviously is the last year but overall inflation during that period of time was 17 over a 10-year
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period uh workers earnings essentially were slightly better than the inflation
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they were able to move ahead a little bit but if you look at the out-of-pocket expenses for
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in United States you see that they increase about almost 10 times then the
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growth in earnings so what’s happening is is Healthcare becomes more and more and more expensive
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it’s a the insurance companies
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more of the two individuals so even though the
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average expenditures for everyone in the United States is over thirteen thousand dollars per year most people that
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require Medical Services will spend number of thousands of dollars a year
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out of pocket
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so what does the current or the old payment structures uh
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they’re all based on volume essentially pay for every service that is being done
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providing most of the structures provide incentives for
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uh for Physicians and hospitals and other caregivers to provide more and
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more care essentially there are if we look at the structures
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you have fee for service they are fixed price you know we’re going to pay you X like drg there are some still Cost Plus
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you know it costs you a hundred dollars will pay 105 dollars or will pay you on
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a per day basis all of those saying all of those structures reimburses providers for what they’re
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doing but they don’t provide any incentive for the providers to be efficient with what they’re doing
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they’re actually being penalized by being efficient or there are capitation
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structures essentially will pay you x amount of dollars to manage certain
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population and you have to manage that population with the monies that we are giving you
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it’s essentially an incentive to do less but there’s no incentive to maintain
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quality actually there is incentive uh inherent incentive to reduce quality uh
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in order to save money so there is a shift
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that has started about 10 years ago and is evolving it started it’s in process
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but it will take many more years to move through and and be fully implemented and
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this is a shift from volume based payments to value-based payments and if
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we look at what the CMS has defined as they said we are moving to a system that
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rewards value over volume and they expected that paying for Value
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will Foster Innovation as providers look for ways to compete by providing the
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highest quality Care at the lowest cost and almost every company that we are
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talking to at these days said you know what we whatever we are providing right now whatever we’re developing is
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intended to improve care and do it at a lower cost almost everything
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so developers of Technologies are catching up to this uh to this drive
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what is the value based payments value is measured by Patients health outcomes
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per dollar spent now we can measure cost it’s not trivial
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but it’s relatively easy to measure cost how much is being spent on caring for a
41:35
patient it’s much more difficult to measure quality this out measuring
41:40
quality we cannot Define value so the industry is coming with many definitions
41:47
of quality or quality improvements and for different services for different
41:53
patients for different disease States they’re using different measures
41:58
so the important thing is to apply measures in order to be able to create
42:04
value as a result of all the shifts there are
42:10
many programs plans initiatives that are being developed this slide just lists
42:15
some of those names there are lots and lots of different acronyms for those things but some of the more famous
42:23
programs and initiatives or accountable care organizations value-based purchasing programs
42:30
reduce payments or no payment payments for hospitals for acquired conditions
42:36
think that patients patient enters a hospital because they had pneumonia and
42:42
while he was in the hospital got also pressure ulcers in in the past hospitals were
42:50
paid also for the pressure ulcer because it was a different condition today if it was acquired while the patient in the
42:56
hospital there is no additional payment it requires a hospital to really take care of patients
43:03
Hospital readmission Reduction Program before it was a revolving door in a way
43:08
a patient was discharged from the hospital there was an incentive because of the drg payments it was a strong
43:16
incentives a strong incentive to discharge the patient the patient as early as possible if the patient is not
43:24
ready to be discharged or is not managed properly after being discharged is more
43:29
likely to return to the hospital until a few years ago hospitals didn’t care
43:35
because when the patient was readmitted again he was discharged after having
43:42
a chronic heart failure and he was he had over uh his accumulated fluid that
43:49
had to be removed from the lungs [Applause] he was discharged and then if he came
43:56
back two weeks after that was a similar problem hospital for the hospital was
44:01
another drg payment now the pairs are telling the hospitals now if the patient
44:06
is returning within 30 days then you’re not going to be paid again
44:11
consider it to be the same admission so the landscape is changing
44:21
in the past all the payments were volume based on
44:27
most of the payments and today as I mentioned they are value-based FIFA service is replaced by bundled care
44:35
we are paying not for every element but for the entire episode pairs assume Financial Risk and
44:42
before and now Pairs and providers share risks Financial risks and as a result of
44:49
all of this if before hospitals let Physicians surgeons select the devices
44:55
that they want to use now it’s always a system decision there’s no one physician
45:01
that can decide what is that that is going to use their
45:06
everyone is involved in that decision so what does exit we need to do as a
45:13
developer as a developer technologist as I mentioned before reimbursement affects lots of different things and
45:21
really the the success of the Enterprise go to market strategy is impacted by the lack or the availability of
45:27
reimbursement and the scope of coverage cells are difficult to ramp up until reimbursement is established marketing
45:35
Partners strategics and acquiries hold off getting involved until market adoption is demonstrated
45:42
and in the process investors want to know early on what it will take in terms
45:47
of time and funds to obtain reimbursement
45:54
so companies that are developing Technologies need to assess
46:00
What will what is the likelihood of developing reimbursement at what it will
46:05
take and there are many factors that have to be assessed you’re seeing here some of the key ones are we making
46:11
changes to the medical practice who will be the users where will the service be
46:17
used what will actually be reimbursed and who is going to pay and those
46:26
considerations as well as other considerations are all important you cannot really figure out what should be
46:32
your what is the status of your reimbursement without understanding all these factors
46:43
so the first question that everyone has to ask is when we introduce the new
46:48
technology can we use the current close and the coverage policies for this technology
46:55
if yes great if not then we need to understand early on the optional
47:01
strategies and develop the roadmap that will lead us to reimbursement and why do we need to develop this roadmap early on
47:09
it’s because reimbursement plan will affect all other Key activities that are
47:15
happening even before we reach the market it can affect the actual product
47:20
configuration absolutely the regulatory absolutely the
47:26
clinical studies in the clinical evidence that we need to demonstrate and how we approach the market all of those
47:33
things are going to be affected by that roadmap and if we don’t have the roadmap we don’t know if our product is designed
47:40
properly we don’t know if we are pursuing the optimal regulatory clearance we don’t know if we are
47:47
performing the optimal clinical studies
47:53
Etc so failure we we asked we are being
47:58
asked all the time when should we start reviewing reimbursement every startup company asks this question
48:04
and as I just said a failure to understand early in the project life
48:09
cycles and roadmap to reimbursement has implications yesterday in the past it
48:15
was actually not a big deal not dealing with this right away but today it’s absolutely a business malpractice and
48:22
the sooner a company develops a roadmap to reimbursement the better this company is going to be
48:31
so just a couple of case studies quickly two studies uh two companies that we
48:36
were heavily involved with both are publicly traded one was publicly traded and so a
48:44
lot of the information here has been published first company is item or Medicals they
48:49
developed a very Innovative technology for performing sleep studies at home uh
48:56
some things that is different than any other technology technological watch pad
49:02
um and initially it was very Innovative and as such was not covered by anybody
49:09
we worked with that with a company to First create an initial market for this
49:16
within provider systems instead of relying on reimbursement from
49:23
third party insurance plans and we focused on the VA and Kaiser Permanente that enabled us to establish the First
49:31
Market I mentioned before the go to market strategy is uh is always affected
49:36
by reimbursement that’s an example we start to gain adoption in those
49:45
Healthcare Systems we approach CMS before we had CPT codes before because
49:50
we didn’t meet all the requirements for CPT codes and we convinced them it took
49:57
about a year to issue coverage for Medicare beneficiaries prior to CPT
50:02
codes there is a mechanism to do that or there is a pathway to do this in
50:08
specific situations in Medicare went along with this they issued a hitbox code or G-Code
50:16
which is in law of CPT code which was gradually adopted also by commercial
50:22
payers and that helped us to expand as the pairs adapted the code and started
50:29
to issue coverage for the watchpad that enabled to expand the market for the
50:34
watchbed subsequently CPT codes were issued
50:39
and the coverage expanded that enables the company which was
50:44
had minimal presence in the marketplace to start building the market accelerate the growth the reached about 50 million
50:52
dollars in run rate revenues demonstrating continuous growth of about
50:58
30 percent over a number of years and that led about a year and a half ago two
51:04
years to acquisition by Zoll medical boston-based company for half a billion dollars
51:13
second company very Innovative company called novocure they developed a totally
51:18
new treatment modality for malignant tumors solid tumors it’s based on
51:25
applying low intensity electrical electrical fields that are applied
51:30
continuously into the tumor the first application was brain cancer glioblastoma
51:38
and they’re in the process of pursuing additional tumors in the abdominal in
51:44
the chest there are many studies that are undergoing right now this company came to us to understand
51:51
how the price of technology that is totally different for this application for cancer and how to structure
51:58
reimbursements for something of that nature and in that case we decided the company
52:05
to do something that is very untypical certainly in the cancer field and
52:13
becomes the provider of the therapy resin Silver devices to oncology clinics or to hospitals
52:19
there are multiple reasons for this I won’t get into all the rationale at this
52:26
point but a company adapted that
52:32
strategy which was 180 degrees from what
52:37
they plan to do originally subsequent to this they’re able to
52:43
receive a code for the equipment including the clinical support for the
52:48
equipment they’re being reimbursed it’s an ongoing use of the product essentially from the
52:56
moment the patients start using it until the the perished actually uh they are
53:04
receiving the companies receiving over ten thousand dollars per month for each patient uh so even though the only uh
53:12
the the only approved uh application for them at this stage is brain cancer which
53:19
is one of the smaller cancers they generates revenues of uh over half a
53:25
billion dollar in their valuation it’s their publicly traded company is about it’s over eight billion dollars now
53:34
so with this uh I’m ready to take questions
53:39
thank you so much uh David uh it’s a very heavy topic and it was uh always
53:45
fascinating to to hear that um we have very uh only two questions
53:51
uh one is very general are we going to send these slides and recording and the
53:56
answer is yes price is asking uh what insurance plan
54:01
do hmos and idns usually accept whether private or other
54:07
that’s for you David so
54:13
HMO the terminology here is problematic so HMO is a type of plan offered by
54:21
almost all insurance companies it’s their HMO PPL uh there’s again there is
54:28
a soup alphabetic soup of acronyms for different plants every insurance company will have multiple plans one of them or
54:35
some of them will be HMO it’s essentially the way they structure as a plan uh in most cases patients can
54:42
go only to limited panel of providers so the right question or the right the way
54:50
to address or to answer this if understand corrects the question is
54:55
providers that are part of the panel of a specific HMO can build for the
55:02
services that they provide to the patient that have that HMO plan
55:07
if a patient goes to a physician that is not part of that panel they have to pay
55:15
separately it’s a the plan will not cover it
55:20
uh idea and stands for integrated delivery Network and again there are different forms of integrated delivery
55:27
networks but if we look at the largest one and the famous One Kaiser Permanente generally speaking idn stands the idea
55:36
of idn is that they are both the insurance and the provider so it’s it’s a close economic systems
55:44
they don’t submit claims to Medicare or to Blue Cross they I if I’m a member of
55:52
Kaiser I’m paying to Kaiser and receive all my health care through Kaiser
56:03
Yona did that answer your question
56:08
yes thank you thank you that was great thank you you’re not if you want to further
56:15
discuss it uh more specifically I’m happy today we could do it offline
56:20
it was very good talk also the last question uh from Christine uh
56:28
Rohan and she’s asking in your experience will providers adopt novel Technologies for Qi purposes and
56:35
reimburse adjunctive to clinical care ahead of FDA reimbursement
56:41
the head of FDA reimbursement the head of FDA reimbursement so I what what is what is the
56:48
application what is the technology used for uh Christine please go ahead and unmute
56:54
yeah it’s uh improved risk prediction for postpartum hemorrhage so it’s used alongside the current
57:00
surveys so generally speaking the answer is no when
57:09
a technology doesn’t have FDA approval it cannot be on the market if it does it’s not on the markets and pairs are
57:15
not going to use it there are some exceptions Medicare for example has
57:21
ability in some cases to reimburse the cost of Technologies for products used
57:28
in clinical studies so that’s the exception
57:35
that’s for technologies that require FDA approval it’s different there are
57:41
technologies that don’t require FDA approval and that’s different steps different situations so I’m not sure
57:46
exactly what is that that you are doing or planning to offer but again I’m more
57:52
than happy to discuss it offline all right thank you
57:59
thanks Dad there’s no more questions um thank you so much fascinating is
58:04
always to meet you all and to listen to you just uh thank David and uh thank
58:11
everybody for joining us have a great day
58:17
bye guys thanks everybody thank you bye-bye thanks everyone [Music]
58:32
thank you
58:38
[Music]English (auto-generated)
