In a new report, the RAND Corporation has identified 10 policy steps the federal government should take in order to achieve the double aim of medical technology innovation — better care at lower costs.
Five of the policy recommendations stem from the oft-daunting Food and Drug Administration approval process and the significant amount of money companies have to spend to create a product that may ultimately be rejected by the FDA. To help spur innovation at the research and development level, RAND recommends the following to reduce the risks and costs of innovation:
1. Enable more creativity in funding basic science. RAND is suggesting not necessarily more grant funding from the National Institutes of Health, but a shift in funding toward pure research and "high risk, high reward" research to get to the breakthroughs that could lead to the development of new medical technology.
2. Offer prizes for inventions. A financial incentive for inventing a drug or device that meets certain criteria, even a small one, could help fuel the creation of products already close to invention.
3. Buy out patents. Establishing a precedent for purchasing a select number of patents would both incentivize the creation of innovative products as well as ensure the new products were available at a reasonable cost to encourage wider use.
4. Establish a public-interest investment fund. Because the market does not always reward the products that are in the public's best interest, the creation of a fund to invest in these inventions would help bring these to reality.
5. Expedite FDA reviews and approvals. Lengthy FDA review processes ensure patient safety but also keep new products from generating revenue for years. Expanding the types of products that qualify for a "fast-tracked" FDA review could reduce the financial risk of inventing these products.
The other five policy recommendations revolve around ways the federal government can increase the market rewards of innovation:
6. Reform Medicare payment policies. Bundled payments and value-based reimbursements encourage healthcare providers to find medical technology that lowers cost while improving care, increasing these products' worth in the market and encouraging their invention.
7. Reform Medicare coverage policies. By not providing Medicare coverage for the use of expensive drugs and devices for off-label uses, the government would create a need for lower cost, specialized alternatives.
8. Coordinate FDA approval and CMS coverage processes. Coordinating these two processes would speed a product's entry to market and further reduce companies' financial risks of innovation.
9. Increase demand for products that decrease spending. An increase in cost-sharing arrangements, such as the Medicare Shared Savings Program, could, like value-based payments, increase providers' demand for products that help them reduce healthcare costs.
10. Produce more and more-timely technology assessments. Reviewing current technology on the market could help providers and payers get a better sense of the uses of available products and decide which to incorporate at their facilities.
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