Budget impact model for medical device proves financial savings for health plans
This case study highlights how Baker Tilly helped a life sciences company secure national payer coverage of its medical device through the development of a budget impact model.
Client background
A medical device company with more than 200 patents, 500 clinical publications and a number of products featured in nearly 10 clinical guidelines was struggling to obtain medical coverage by national payers for pVAD, a minimally invasive percutaneous catheter-based device that is powered and controlled by its console and designed to provide partial circulatory support.
The business challenge
Although the client already achieved positive coverage from several local and employer plans, the client needed help bridging the conversation in a meaningful way with national payers in order to increase covered lives. The company also needed help informing and educating health plans about how the device’s technology improves health outcomes and its related financial impact.
The Baker Tilly approach
Baker Tilly developed a budget impact model (BIM) to assist the client with its discussions with key health plans as well as four peer-reviewed economic papers and posters for industry conferences based upon the BIM results. This model allowed for the selection of either one of the two patient diagnoses or a combined scenario, default membership counts, prevalence rates, penetration percentages and reimbursement rates with the ability to enter different values. Based upon these inputs, the BIM calculated the per member, per month (PMPM) ratios and total costs for each scenario.
Business impact
The business impact model showed that the technology would reduce major adverse events, including death along with reduced resource consumption. More specifically, the number of heart attacks and strokes of patients were reduced, which resulted in fewer re-admissions. Upon release of this data, the number of covered lives for the device increased. The denial activity was also minimized across the country (i.e., more than 90% of claims are now being paid). Finally, throughout the nearly 10-year period since engaging Baker Tilly to conduct extensive real world data (RWD) evidence generation activities, the clients publicly traded stock has increased by more than 20x at its peak.
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