Originally Published IVD Technology March 2005
INDUSTRY NEWS
AdvaMed initiative puts
more emphasis on IVDs
Richard Park
The diagnostics sector of AdvaMed (Washington, DC) has launched a five-year initiative to communicate the value of diagnostics and reshape the health policy landscape for diagnostics, especially in the area of reimbursement. After taking a hard look at the challenges on the horizon, AdvaMed’s senior management team and the sector realized that the association needed to raise awareness of the value of diagnostics among influential lawmakers, regulators, healthcare policymakers, and the general public. AdvaMed also concluded that while innovation in the diagnostics arena is rapid, regulation and reimbursement for new tests worldwide have not kept pace, threatening patient access and future innovation.
“Overall, Medicare reimbursement of clinical laboratory tests has not kept up with technology,” says Jeff Ezell, AdvaMed’s associate vice president, diagnostics. “Provisions in the Medicare Modernization Act of 2003 will ultimately help create a more transparent and predictable process for setting reimbursement rates for new clinical laboratory tests. However, there are still many systemic problems that must be addressed.”
AdvaMed formed the diagnostics sector in 1996 to address the unique regulatory and reimbursement concerns of its diagnostics member companies and to ensure that the sector effectively leverages the association’s many resources. During the past few years, the sector has been a leading force in policy development and a voice for the IVD industry.
AdvaMed’s senior management asked Ezell to coordinate all of the facets of the diagnostic sector’s five-year plan, including public relations, coalition building, and government affairs. According to Ezell, the first step in the process of creating a modern reimbursement system for diagnostics will be to build understanding among key stakeholders and decision makers about the value of diagnostic lab tests. He has already started reaching out to organizations in the lab community to see how labs and the IVD industry can work together to communicate the value that diagnostics provide to patients, the healthcare system, and society.
“Effectively illustrating this value will be critical in driving whatever specific policy solutions we put forward in the future and in fighting off attempts to further reduce reimbursement for clinical lab tests,” says Ezell.
Ezell says that the diagnostics sector and AdvaMed’s senior management decided to launch this initiative after taking a close examination at the long-term challenges ahead, and the future of the diagnostics industry with innovations in multiple areas encountering a reimbursement system that is 20 years old. They also looked at the short term and realized that a tight budget environment and concerns over healthcare costs could have a negative effect on health spending across the board. Ezell points out that those healthcare sectors that cannot effectively convince policymakers that investments in their areas are worth the cost and provide value to patients and the healthcare system will face reimbursement cuts.
“Look at how diagnostics fared in the last Congress: a five-year consumer price index freeze and a competitive bidding demonstration project for clinical lab tests,” says Ezell. “Obviously, a key to heading off more such measures is demonstrating the value of clinical lab tests.”
Ezell adds that the five-year plan is primarily focused on communicating value, developing reimbursement policies, and successfully advocating for them. However, the communicating value portion, if done effectively, will help AdvaMed advance its policies in other areas. The more policymakers understand diagnostic technologies and the value they provide, the easier it will be to help them understand the need for meaningful reforms that will speed patient access to such innovations.
In addition, in early 2004, the diagnostics sector commissioned the Lewin Group (Falls Church, VA), a healthcare and human services consulting firm, to prepare a report on the current status of the IVD industry. While AdvaMed officials declined to discuss any initial findings from the report, they expect the final report to be released this spring.
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