Printer Friendly

Discovery channel: health insurers must decide whether to cover the steady stream of federally approved high-tech medical devices. (Life/Health: Medical Devices).

Last year, the U.S. Food and Drug Administration approved an average of nearly one new medical device a week and considered hundreds more. That work is a big help to the health-insurance industry but insurers still face many decisions about whether and how they will cover those devices.

Recent devices to win FDA approval include products for defibrillation aneurysm repair, hearing improvement, glucose monitoring, spinal-fusion in the lumbar area and shock-wave therapy on elbows. As of late February, the FDA was close to approving a drug-coated stent designed to prevent' arteries from reclogging. In August 2001, it approved for marketing a vitamin-sized capsule with a color video camera inside that sends images to doctors as it passes through the small intestine. The capsule is much less uncomfortable than a traditional endoscopy in that patients simply swallow it, but many health insurers remain undecided about covering the cost of that device as a diagnostic tool.

The FDA approval process is much looser for devices than for drugs, said Dr. Charles Cutler, chief medical officer for the American Association of Health Plans. But FDA approval is usually a necessary hurdle for any new device. Health insurers then determine whether they will pay for new products through their health plans. These decisions, however, are generally guidelines, with actual coverage decisions usually made on the advice of a patient's doctor and on a case-by-case basis.

The robust pace of newly developed devices, drugs and surgeries makes it difficult for AAHP member companies to keep up, said Cutler. Health plans also can come under pressure from media coverage that touts some new development as a cure even before enough information about it has been amassed, he said. AAHP represents more than 1,000 health plans in the United States covering close to 170 million people.

Health plans evaluate new devices based on medical literature that exists, and they do so generally without regard to costs, Cutler said. "Health plans are in the business of trying to help people, so they are not averse to costly procedures like heart transplants," he said. "We're always happy to see developments that are lifesaving, but they come at a cost, which is usually incremental, and the cost is passed on to customers through their premiums."

One way health insurers communicate coverage decisions is through policy bulletins. Aetna Inc., the fourth-largest health insurer in the United States, posts more than 600 coverage policy bulletins on its Web site According to the company these bulletins are developed to assist in administering plan benefits and do not constitute medical advice. "Treating providers are solely responsible for medical advice and treatment of members," the company said on the site. In 2002, the company considered about 300 new and revised policies, each dealing with one or more technologies, said Dr. Robert McDonough, medical director of the coverage policy unit.

Innovation's Brisk Pace

Though the velocity of technological development is high, many insurers are finding ways to keep up. "It's really not a challenge," said Dr. Razia Hashmi, vice president for coverage policy for Cigna Healthcare, the nation's third-largest health insurer. "When a new drug or device is approved, more often than not we're following its progress as it goes through the FDA process. Does it represent a new breakthrough treatment, or is it a me-too agent? We follow that along the way, so it's not a shock or surprise for us."

McDonough said new information technology has helped Aetna to evaluate new devices and drugs more quickly. Publications in electronic form are more easily searchable. For example, the National Library of Medicine's PubMed, an online search engine, allows for electronic searches and is a tool to identify the quality of literature available to support the use of a new medical technology, he said. The National Guideline Clearinghouse of the U.S. Agency for Healthcare Research and Quality provides a search capability on the Internet. Aetna also uses the Cochrane Review Abstracts, which are summaries of reviews by the Cochrane Collaboration, an international organization that aims to help people make well-informed decisions about health care by providing systematic reviews of the effects of health-care interventions. "So while the pace is increasing, you have access to an enormous amount of information very quickly through these new resources and electronic text searching," McDonough said.

Like Aetna, Cigna uses technology assessment services, including Cochrane, to effectively handle the volume of new products and procedures in a timely manner. An example Hashmi mentioned is Hayes Inc., which tracks new and emerging international health-care technologies and offers peer-reviewed evidence-based guidance in evaluating safety and efficacy of new treatments and technologies. Another such service is the Technology Evaluation Center of the Blue Cross and Blue Shield Association.

In addition to determining whether a device performs as advertised, Hashmi said Cigna wants to know whether it has an appropriate shelf life and whether there is a "critical mass of opinions" in the medical literature to support its use as a standard of care. She also said Cigna wants to assess the chances a device will harm a patient. "One of the criticisms of the FDA's rapid-approval process is that it does not follow a sufficient process over enough time to ensure a device does not have a harmful side effect," Hashmi said.

Strange as it may seem, there also is evidence that providing no real medical intervention may produce the same outcome as a new treatment. Hashmi cited a study in the New England Journal of Medicine that compared the results of arthroscopic surgery for knee pain to a placebo procedure in which doctors made a skin incision and manually manipulated the joint. Patients did not know which treatment they received. "The outcome, which shocked the field," Hashmi said, was that people who had the placebo procedure had the same range of results. "So when we compare new treatments, we want to know whether they work any better than a placebo or than the standard of care out there," she said.

Costs Not Considered

Cost is not an explicit factor in the groups headed by Hashmi and McDonough. McDonough said that his group does not conduct its own cost-effectiveness assessments, but rather makes decisions based on medical literature, results of scientific studies, FDA approvals and the opinions of medical professional societies. But he pointed out that when two available technologies are equally effective, Aetna's agreements with subscribers allow it to require the less costly technology. And with regard to the cost-effectiveness of primary preventive services such as screenings, Aetna follows the recommendations of the U.S. Preventive Services Task Force and other federal public health agencies such as the Centers for Disease Control, the National Institutes of Health and the National Cancer Institute. It also follows the recommendations of leading primary-care medical professional organizations, which consider cost-effectiveness.

Hashmi said her group does not make cost/benefit analyses, but rather evaluates technology purely on the basis of safety and efficacy. McDonough said market forces can sometimes play a role, but not explicitly. "Obviously, if there is pressure from physician groups or patients, that may prompt us to look more carefully at a policy, but the simple pressures in and of themselves aren't sufficient in the absence of adequate evidence for the council to change its opinions," he said.

Both Hashmi and McDonough said their teams often hear from product manufacturers that lobby for coverage of their products. Hashmi said her team delegates such contacts to a single person. "We want to maintain a nonbiased, purist approach to our process," she said. "When we need more information, we work through the designated contact. We may also go to a FDA meeting, which is open to the public."

"Manufacturers press us all the time to approve their products, especially since we put our approvals out onto the Internet," added McDonough. When that occurs, his team will consider new information and additional data, he said.

Insurer coverage policy as it ultimately affects the individual insured is determined by the contractual language of the health plan, and Cigna offers a variety of plans. Some plans offer all-inclusive benefits, Hashmi said. Standard-benefit plans do not cover experimental treatments.

In the Pipeline

The new devices going through the approval process elicited a range of opinions. McDonough said the drug-alluding stent manufactured by Johnson & Johnson is likely to be a slam clunk.

"The problem with standard stents is that they can induce fibrosis, scarring and inflammation within the stent," he said. "The stent could become blocked, and another procedure would be required. The new drug-coated stent appears to prevent the restenosis." The new technology would seem to make such minimally invasive procedures more attractive as alternatives to heart-bypass surgery McDonough said.

"If it turns out to be effective, people will be enthusiastic about it," said Cutler. "Angioplasty is less invasive and less risky than coronary bypass surgery. The question is whether the drug-alluding stent will extend the time a stent will keep an artery open."

Coverage approvals appear less certain for the capsule-endoscopy device, manufactured by Given Imaging Ltd., an Israeli company with North American headquarters in Norcross, Ga. Hashmi said the device appears to work, and it provides doctors access to the small bowel, which a regular endoscopy cannot reach. But there is some concern the device could cause complications by getting stuck, Hashmi said. "Our group said it's worth waiting a few months to learn more about the potential for complications," she said, adding that surgery could become necessary to remove a stuck capsule.

According to Cutler, the small intestine is not at much risk of disease. "For those at risk of small-intestine disease, the device is useful and might be valuable," he said. "The bad news is that there are a Lot of people with nondescript symptoms--irritable bowel syndrome--and they aren't at risk of serious complications." Cutler expressed concern that the capsule-endoscopy test could therefore become overused rather than targeted for a small group of people.

Hashmi gave another example of a device that works as advertised and is safe, but that the technology assessment teams approached with caution because they were concerned about potential harm. At least four manufacturers have produced devices that allow patients to test their blood at home if they're on blood thinners. "But all of the studies say the device is appropriate for motivated' patients educated in how to use it," she said. "So how do we figure out who is the motivated, educated patient? We concluded it's up to the doctor to decide who is right for this device."

Both Jane Johnson, director of ING Re's Medical and Managed Care Services, and McDonough expressed support for a new ventricular-assist device for patients with congestive heart failure. The FDA reports the product is made by the Thoratec Corp., Pleasanton, Calif. It is considered a destination therapy--one designed to last the rest of a patient's life--for patients who are not heart-transplant candidates. According to McDonough, the device appears able to extend the lives of some patients by two years or more, significantly longer than if they receive drug treatment but less than would a heart transplant. "We decided to cover it," he said. "We didn't take cost into consideration, but it's a fairly high cost per year of life saved."

RELATED ARTICLE: Devices Recently Approved by the FDA

This is a sampling of medical technology approved by the Food and Drug Administration.

* Karl Storz Autofluorescence System. Camera looks inside tubes of lungs to detect cancer with help of special light. Approved 12/12/2002.

* ALERT System. Accesses heart by means of catheter and stops atrial fibrillation with low-energy electrical shock. Approved 1112712002.

* HeartMate SNAP-VE LVAS. Helps main pumping chamber of heart to deliver blood throughout body. First such device approved for long-term treatment of severe heart failure. Approved 11/6/2002.

* Neuroform Microdelivery Stent System. Designed to prevent rupture of aneurism in brain. Approved 9/11/2002.

* GlucoWatch G2 Biographer. A glucose-monitoring device worn on the wrist that supplements finger-stick blood measurements by pulling fluid through skin. Helps to better manage diabetes. Approved for children 8/26/2002.

* RetroX Transcutaneous Air Conduction Hearing Aid System. Attached behind the ear, it leaves ear canal open. Approved 8/20/2002.

* Siemens SONOCUR Basic. Designed to relieve pain due to tennis elbow by directing low-energy pulses of sound at the area. Approved 7/19/2002.

* InFUSE Bone Graft/LT-CAGE Lumbar Tapered Fusion Device. Uses genetically engineered protein to help build bone tissue while fusing vertebrae in lower spine to treat degenerative disc disease. Approved 7/2/2002.

* AFFINITY Cage System. A system of special screws and surgical tools to stabilize the neck and relieve pressure on spinal nerves. Approved 6/13/2002.


Reducing Objections.

Despite an insurer's careful deliberations over what to cover, health plan members may object or appeal when they learn a treatment is not covered or that the plan will not pay for them individually. ING Re's ROSE Program, developed in 1984, provides recommendations to its reinsurance clients on how to handle such situations.

The goals of ROSE (Reinsurance Outcomes and Service Experts) are to help reinsurance clients control their risks, decrease costs, and manage potentially catastrophic cases, said Jane Johnson, director of medical and managed-care services in Minneapolis. The program has nine staff members.

Each insurer's decision-making process is different from another's, but the ROSE program identifies elements that should be a part of every process. "The biggest thing we stress is that an insurer have a consistent process because courts will look in detail and depth at what the process is, what the plan has paid in the past, and whether it has paid for one member but denied another," said Johnson. "It also must have a clear benefit language. If it is not clear, the courts will side with the patient."

A big part of the challenge for health insurers is to write clear benefit language because it is difficult to foresee medical treatments that change so rapidly, Johnson said. One strategy a health plan may employ is to link its benefits to approvals by a federal agency, such as the Food and Drug Administration, or to the Centers for Medicare and Medicaid Services, which gets reports from the Center for Health Care Technology before setting Medicare coverage. When doubt still exists, she recommends following the lead of any national boards, the American Medical Association, the American College of Surgeons, or other reputable organizations, and as much as possible to link coverage to prevailing standards of care. To help assess the appropriateness of a proposed procedure for a specific patient, she suggested soliciting external expert opinion by a three-member expert review panel.

Medical advice on the Internet and commercials on television have made the climate even more challenging for health insurers because they arm patients with more information that may or may not be accurate or relevant. Johnson said a good way to handle requests generated by these sources is to provide doctors with research from more credible sources on whether a treatment is effective in order to have the best chance for a good health outcome.

The ROSE program itself uses the Hayes Medical Technology Directory, which reviews the medical literature and provides abstract summaries of clinical trials, medical consensus, and bibliographies. ING Re's contract with Hayes Inc. allows it to share these reports with its client companies on potential reinsurance cases. Other resources for technology assessment are the Emergency Care Research Institute, an independent, nonprofit organization, and the Blue Cross and Blue Shield Association's Technology Evaluation Center.

If two treatments are likely to yield the same outcome, health plans will usually choose the less expensive, said Johnson. But ROSE steers clear of making specific recommendations, especially regarding costs vs. benefits. "We try to stay out of that," said Johnson. "Our role is not to make recommendations, but to provide information so the health plans can make their own determinations."

Such decisions can be tough. As much as health plans may try to stick to scientific considerations, they are still subject to market pressures from providers, employers and public perception in general. "They certainly fear litigation, bad press and loss of employer groups," Johnson said. "The other thing is that many states--and even the federal government--pass laws mandating coverage for many new technologies."

Mandates don't always work out well. One that didn't forces health plans to cover bone-marrow transplantation in breast-cancer patients. Johnson said trials have subsequently shown it to be no more effective than standard-dose chemotherapy.
COPYRIGHT 2003 A.M. Best Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Comment:Discovery channel: health insurers must decide whether to cover the steady stream of federally approved high-tech medical devices. (Life/Health: Medical Devices).
Author:Panko, Ron
Publication:Best's Review
Geographic Code:1USA
Date:Apr 1, 2003
Previous Article:Knowing the competition: in the highly competitive insurance industry, we cannot afford to be negligent in analyzing our competitors....
Next Article:The right sale: insurers address suitability concerns as sales of long-term-care products grow. (Life/Health: Long-Term Care).

Related Articles
Safety Measures.
Critical mass: critical illness coverage holds promise for insurers, but not without support from producers. (Life/Health: Critical Illness).
2002: insurers deal with a new crisis, old issues. (Industry Strategies).
Epidemic proportions: insurers are modeling the potential liability posed by infectious diseases. (Industry Strategies: Infectious Disease).
Supreme Court wades into ERISA's 'Serbonian bog' again.
Hot buttons: candidates' opposing views on key issues mean high stakes for insurers in the 2004 election.
Healthy wish list.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |