A Maryland state appeals court this week upheld a state law prohibiting physicians from referring patients for MRI, CT, and radiation therapy services to providers in their own group practice.
The Maryland Court of Appeals, in Potomac Valley Orthopaedic Associates, et al. v. Maryland State Board of Physicians, et al. ruled that the board was entitled to interpret and apply the self-referral statute to its administers. The court also clarified that the law's "direct supervision" exception -- which is limited to referrals to "outside entities" -- requires that the referring physician be "personally present within the treatment area when the service is being performed" and must personally provide that service or directly supervise it.
A receptionist at Potomac Valley Orthopedic Associates said the physicians' group had no statement about the ruling, and would not say whether or not it would appeal.
However, the American College of Radiology cheered the court's decision, which it called a major victory for quality patient care and patient choice.
"Studies have shown that there is very little, if any, patient benefit to self-referral of advanced imaging and radiation therapy," said John A. Patti, MD, chair of the American College of Radiology board of chancellors. "Instead, the practice often results in significant unnecessary utilization of imaging, unwarranted radiation exposure, lower quality of care and increased cost that is ultimately passed on to patients.
Patti called the Maryland law "a model to which other states should look to," and he noted it has been under attack since it was enacted in 1993.
The court ruled that the Maryland General Assembly clearly intended to exclude MRIs and CTs from the "in-office ancillary services exception," and that lawmakers rejected four attempts since 2007 to weaken the statute.
Last year, the ACR unsuccessfully led an effort to put language in the federal Accountable Care Act that would eliminate the in-office ancillary services exception for advanced imaging and radiation therapy. However, ACA requires self-referring physicians to disclose their financial interest to patients and tell them about other facilities near them.
"The College continues to push for further legislative action that would discourage financially motivated self-referral and to educate lawmakers at all levels of government regarding sound imaging and radiation therapy policy," Patti said.
Potomac Valley Orthopaedic Associates, et al. v. Maryland State Board of Physicians, et al may be viewed here.
As Republicans in Congress prepare to dissect the Affordable Care Act, the Obama administration is stepping up its public relations campaign to point out the program's benefits for Medicare beneficiaries.
Health and Human Services Secretary Kathleen Sebelius said three million Medicare beneficiaries who fell into the "donut hole" prescription drug coverage gap in 2010 have been mailed a one-time, tax-free $250 rebate check.
"For too long, many seniors and people with disabilities have been forced to make impossible choices between paying for needed prescription medication and necessities like food and rent," Sebelius said in an HHS announcement. "The Affordable Care Act offers long overdue relief by lowering prescription drug costs each year until the donut hole is closed."
Eligible beneficiaries who fell into the donut hole in 2010 are continuing to receive rebate checks and HHS said ACA will reduce prescription drug costs for beneficiaries in the donut hole each year until it is closed in 2020. Starting in 2011, HHS said beneficiaries in the donut hole will receive a 50% discount on covered brand name medications while in the donut hole. Medicare will also begin paying 7% of the price for generic drugs during the coverage gap.
HHS is also promoting the ACA's financial provisions that it says will extend the life of the Medicare trust by another 12 years. Under the ACA, HHS said the average savings for traditional Medicare enrollees will amount to more than $3,500 over the next 10 years. Savings will be even higher – as much as $12,300 over the next 10 years – for seniors and people with disabilities who have high prescription drug costs. Total savings per beneficiary enrolled in traditional Medicare are estimated to be $86 in 2011, rising to $649 in 2020. For a beneficiary in the donut hole, estimated total savings increase from $553 in 2011 to $2,217 in 2020.
HHS said ACA also provides new Medicare benefits, safeguards, and incentives in 2011:
Original Medicare no longer charges out-of-pocket costs for the "Welcome to Medicare" physical exam and, for the first time since the Medicare program was created in 1965, Original Medicare now covers an annual physician wellness visit, also at no cost.
Most Medicare beneficiaries can now receive critical preventive services, including certain cancer screenings such as mammograms and colonoscopies, for free.
Qualifying doctors and other healthcare professionals providing primary care to people on Medicare a 10% bonus for primary care services.
An innovation center that will research, develop, test, and expand innovative payment and delivery arrangements to improve the quality and reduce the cost of care provided to patient with Medicare, Medicaid or Children's Health Insurance Program coverage.
To prevent fraud, there will be more strenuous screenings for healthcare providers who want to participate in Medicare, Medicaid, or CHIP. In addition, enforcement officials will be able to see healthcare claims data from around the country in a searchable database, and criminal penalties for fraud will be strengthened.
The growth in the demand for healthcare workers -- though healthy when compared with the rest of the economy – slowed in the last two quarters of 2010, and likely will continue to expand at a tepid pace well into 2011, says David Cherner, managing partner with Health Workforce Solutions.
"Our results this quarter were a little disappointing given what we had seen earlier this year," said Cherner, who this month issued the HWS Labor Market Pulse Index, at a quarterly barometer of local market healthcare workforce fluctuations released.
"Like the broader economic data, the healthcare labor market began 2010 with some marked improvement over the prior year and the promise of great strength by Q4. Unfortunately that didn't materialize as many of us had hoped," Cherner said. "We are not likely to see more meaningful gains until later this year but those gains should be much more sustainable."
LMPI found that near-term demand for healthcare workers is growing fastest in Orlando and in Detroit in the second quarter, while the Las Vegas, New York City, and Houston markets ranked at the bottom of the 30 markets tracked. "There are select parts of the country that are still weak," Cherner says. "But on the whole, the healthcare labor market as measured by our composite index, continues to strengthen."
Cherner says the fourth quarter of 2010 showed the near-term demand for healthcare workers is the strongest in Tampa, Riverside/San Bernardino and Phoenix. The San Jose, Chicago and San Francisco Bay Area markets ranked at the bottom of the 30 markets tracked.
"We've have seen some stagnation in the fourth quarter in the index so that is two straight quarters. In the third quarter it went down about 13% and this quarter went down about 3%. There is no reason why the healthcare labor market is not going to continue to outperform other sectors. We just don't expect from what we have seen in the fourth quarter of 2011 that any meaningful improvements will happen until later in 2011, most likely the third or fourth quarter."
Cherner attributes the slowdown to continued layoffs by hospitals that are coping with reimbursement cuts from Medicare, declines in demand for elective surgeries, and the continuing waves of hospital and health system consolidations that are likely to continue into the near future.
"That being said, looking forward there are some bright spots," Cherner says. "Community health centers, a key component of healthcare delivery, are getting a tremendous amount of investment over the next five years that will likely fuel notable additional hiring across the country in 2011 and beyond. And on the hospital side, on the patient care services side, there is not much more for hospitals to cut without impacting quality. So, many of the cuts that will be made because of the decline in demand will be made in non-patient care personnel."
Among the LMPI findings for the fourth quarter of 2010:
After a relatively strong year compared to other sectors, the strength of the national healthcare labor market remained flat across a number of major metropolitan areas.
The LMPI composite index, a representative basket of the 30 largest markets, posted a 3% decline in the fourth quarter of 2010 from the 3rd quarter of 2010, after a 13% decline the prior quarter.
For the 4th quarter that ended Dec. 31, 14 markets of the 30 tracked by the LMPI showed signs of accelerated expansion -- compared with 10 markets in the third quarter.
It's important to remember that while things could be better in healthcare hiring, they could be a lot worse, too.
The Bureau of Labor Statisticsreported this month that hospitals created 50,100 jobs in 2010, nearly double the rate of job creation from 2009, and the entire healthcare sector - everything from allergists to X-ray technicians -- created 265,800 jobs for the year.
Overall, the healthcare sector employed 13.9 million people at the end of 2010, including 4.7 million jobs at hospitals, 6 million jobs in outpatient ambulatory services, and 2.3 million jobs in physicians' offices, BLS preliminary data show.
For December, the healthcare sector recorded 35,700 payroll additions, including 8,000 hospital jobs. However, ambulatory healthcare services continues to be the major driver of healthcare job creation, with 20,600 payroll additions in December, and 160,200 payroll additions recorded in 2010, BLS preliminary data show.
So, we're not quite where we want to be, but it's not that bad, considering where we have been.
The Federal Trade Commission has approved the affiliation of Hartford HealthCare and Central Connecticut Health Alliance, the parent company of The Hospital of Central Connecticut, the two health systems have announced.
“Combining the resources of CCHA and HHC is really one plus one equals three; the two organizations together are greater than the sum of our parts,” said Elliot Joseph, president/CEO of Hartford HealthCare. “Patients will benefit from the wider continuum of care and better coordination of care that a healthcare system offers, communities will benefit from a broader range of services, and staff will benefit from greater professional opportunities.”
Clarence J. Silva, president/CEO of The Hospital of Central Connecticut and CCHA, called the affiliation “the culmination of a successful 20-year relationship between Hartford Hospital and The Hospital of Central Connecticut. We have a long-standing relationship between our hospitals and health care systems. Together, we know we are making a positive difference for the people of our state.”
CCHA was formed in 1995 by Bradley Memorial Hospital and New Britain General Hospital, and now includes The Hospital of Central Connecticut, a 414-bed, acute-care teaching hospital, Alliance Occupational Health, Central Connecticut Senior Health Services, Central Connecticut Physical Medicine and Central Connecticut VNA.
The two hospital leaders said the affiliation allows them to improve best practices, introduce new technology, improve access to primary and secondary care, and increase efficiencies and lower costs through IT sharing and volume purchasing.
“What does this mean for the patient? It means they have easier access to stronger hospitals and a continuum of care – from primary care, to specialty care, to hospital services, to rehabilitation and long-term care, to home care,” Joseph said. “As a healthcare system, we want to be the patient’s partner for a lifetime of care and the community’s partner in providing services for the health and well-being of community members.”
The affiliation also will improve patient access to critical and complex care, including Hartford Hospital’s Level 1 Trauma Center, LIFE STAR transport services, and transplant services. The two hospitals plan to create a unified electronic medical records system, which will enable doctors’ offices throughout Hartford HealthCare to communicate directly with one another.
The United States will spend at least $158 billion to treat cancer in 2020 – an increase of 27% over 2010, and expensive new tools for diagnoses, treatment, and follow-up could bump the price up to $207 billion, according to a new study by the National Institutes of Health.
The NIH projections, published online this week in the Journal of the National Cancer Institute, were based on the most recent data available on cancer incidence, survival, and costs of care. In 2010, medical costs associated with cancer were projected to reach $127.6 billion, with the highest costs associated with breast cancer ($16.5 billion), colorectal cancer ($14 billion), lymphoma ($12 billion), lung cancer ($12 billion) and prostate cancer ($12 billion).
If cancer incidence and survival rates and costs remain stable and the United States population ages at the rate predicted by the U.S. Census Bureau, direct cancer care expenditures would reach $158 billion in 2020, the report said.
“Rising healthcare costs pose a challenge for policy makers charged with allocating future resources on cancer research, treatment, and prevention,” said study author Angela Mariotto, from NCI’s Surveillance Research Program. “Because it is difficult to anticipate future developments of cancer control technologies and their impact on the burden of cancer, we evaluated a variety of possible scenarios."
Researchers also did additional analyses to account for changes in cancer incidence and survival rates and for the likelihood that cancer care costs will increase as new technologies and treatments are developed.
Assuming a 2% annual increase in medical costs in the initial and final phases of care – which would mirror recent trends – the projected 2020 costs increased to $173 billion. Estimating a 5% annual increase in these costs raised the projection to $207 billion. These figures do not include other types of costs, such as lost productivity, which add to the overall financial burden of cancer.
To project national cancer expenditures, the researchers combined cancer prevalence, the current number of people living with cancer, with average annual costs of care by age (less than 65 or 65 and older). According to those estimates, there were 13.8 million cancer survivors alive in 2010, 58% of whom were age 65 or older. If cancer incidence and survival rates remain stable, the number of cancer survivors in 2020 will increase by 31%, to about 18.1 million. Because of the aging of the U.S. population, the researchers expect the largest increase in cancer survivors over the next 10 years to be among Americans age 65 and older.
"The rising costs of cancer care illustrate how important it is for us to advance the science of cancer prevention and treatment to ensure that we’re using the most effective approaches,” said Robert Croyle, director of the Division of Cancer Control and Population Sciences at the National Cancer Institute. “This is especially important for elderly cancer patients with other complex health problems."
To develop their cost projections, the study used average medical costs for the different phases of cancer care: the first year after diagnosis, the last year of life, and the time in between. For all types of cancer, per-person costs of care were highest in the final year of life.
Per-person costs associated with the first year after a cancer diagnosis were more varied, with cancers of the brain, pancreas, ovaries, esophagus and stomach having the highest initial costs and melanoma, prostate and breast cancers having the lowest initial-year costs.
These new projections are higher than previously published estimates of direct cancer expenditures, largely because the researchers used the most recent data available — including Medicare claims data through 2006, which include payments for newer, more expensive, targeted therapies which attack specific cancer cells and often have fewer side effects than other types of cancer treatments. In addition, by analyzing costs according to phase of care, which revealed the higher costs of care associated with the first year of treatment and last year of life (for those who die from their disease), the researchers were able to generate more precise estimates of the cost of care.
The researchers used 2005 incidence and mortality data from NCI's Surveillance, Epidemiology and End Results program to estimate cancer prevalence for 2010 and 2020.
St. Jude Medical Inc. will pay $16 million to resolve whistleblower allegations that it illegally used post-market studies and a registry to pay kickbacks to physicians who used the device maker's pacemakers and defibrillators, the Justice Department said Friday.
St. Jude used the studies and registry to increase device sales by paying certain physicians up to $2,000 per patient to select St. Jude pacemakers and implantable cardioverter defibrillators for their patients, or to lure them away from competitors, DOJ said.
"Medical device and pharmaceutical companies can use post-market studies legitimately to obtain information about how their products work in the field, but they cannot use those studies, and the honoraria associated with them, to induce physicians to select their products," said Carmen Ortiz, U.S. Attorney for the District of Massachusetts, which led the investigation.
"Cardiologists and electrophysiologists should make their decisions on which pacemaker or defibrillator to implant in a patient based on their independent medical judgment, not based on how much the manufacturer is paying them to implant the device," Ortiz said.
This action was initiated by a whistleblower action under the False Claims Act by Charles Donigian, who will get $2.6 million of the recovery money.
St. Paul, MN-based St. Jude issued a statement on its Web site acknowledging the settlement, but admitted no wrongdoing.
"We are pleased to have reached a settlement agreement with the DOJ that fully resolves the post-market study matter in Boston. The company maintains that its post-market studies and registries are legitimate clinical studies designed to gather important scientific data and St. Jude Medical does not admit liability or wrongdoing by entering into this agreement. The company entered into a settlement agreement to avoid the potential costs and risks associated with litigation. This settlement brings the previously reported post-market study investigation to a close. As part of this settlement, the company will make a payment of $16 million to the DOJ. St. Jude Medical affirms that the resolution of this matter has no material impact on the company's financial position or operations."
The major healthcare sector lobbying groups that played a role in crafting and helping pass the landmark healthcare reform law last year offered a muted response to Wednesday's Republican-led effort to repeal the law in the House.
The House repeal, which passed 245-189 on a largely partisan vote, is seen as a symbolic gesture from Republicans who made repealing the law a centerpiece of November 2010 elections that brought them into the majority. However, Democrats still control the Senate and they won't consider the bill; President Obama has vowed to veto any repeal bill that hits his desk.
In fact, by midday Thursday, the repeal vote was all but forgotten and House Republicans moved on to pass a resolution 253-175 – again largely on partisan lines – ordering four committees to create alternatives to the Accountable Care Act.
So, with little to gain by issuing public opinions on the divisive and controversial vote, and with lawmakers still considering major changes to the existing healthcare legislation, healthcare lobbyists said little, if anything, and prepared for the next battle.
The American Hospital Association, for example, declined to comment on the repeal vote.
American Medical Association President Cecil B. Wilson offered perhaps the firmest defense of the law when he said in a statement: "The AMA does not support repeal of the Affordable Care Act because it includes expanded health coverage, insurance market reforms and initiatives to promote wellness, which are in line with AMA policy objectives."
By Thursday, the AMA was back on the Hill, lobbying for tort reform, which is expected to get a more sympathetic hearing now that Republicans control the House Judiciary Committee.
Robert Zirkelbach, spokesman for America's Health Insurance Plans, didn't pick a side on the vote when he said: "We continue to believe that changes are needed to the health care reform law in order to minimize coverage disruptions and cost increases for families and employers."
Instead, Zirkelbach reiterated AHIP's ongoing concerns about the Affordable Care Act. "While the new law will bring more people into the system, major provisions will raise costs and disrupt the coverage people have today, including: new taxes on small businesses health insurance; age rating restrictions that will cause premiums to skyrocket for younger workers; and massive Medicare Advantage cuts that will result in higher premiums, reduced benefits, and fewer choices for seniors." Zirkelbach said AHIP would "continue to work with members of Congress from both parties to address these issues."
Wes Metheny, senior vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA) didn't even mention the vote in a lengthy press release.
"A core principle that continues to guide our advocacy efforts is that all Americans should have access to high-quality and affordable health care coverage, services and treatments – a notion that has historically enjoyed broad bipartisan support. Additionally, we believe it is critically important that public policies foster future medical discovery and innovation and promote U.S.-based biopharmaceutical jobs," Metheny said.
The average per capita cost of healthcare services covered by commercial health plans and Medicare programs rose 6.27% in the 12 months ending in November 2010, but the rate of growth continues to decelerate, Standard & Poor's said Thursday.
The S&P Healthcare Economic Indices monthly estimate for November showed that medical inflation slowed 0.41% when compared with the 6.68% growth reported for the 12-month period ending in October 2010 – a deceleration trend that's been in place since May, said David M. Blitzer, chairman of the Index Committee at Standard & Poor's. "We are continuing to see a downward trend in the annual growth rates across all indices," Blitzer said.
Healthcare cost increases continue well above the rate of inflation in the larger economy, which grew 1.1% for the 12-month period ending in November as measured by the Consumer Price Index. Most of that growth was fueled by energy costs, the Bureau of Labor Statistics reports.
Blitzer speculated that some of the reduced rate of growth in healthcare costs may be attributed to the recession and the slow recovery. "People are being tight with their money and that includes spending on healthcare," he said. "Some healthcare is discretionary, some is not. Some is sort of adjustable in that you may be able to resolve the problem cheaper but not as effectively."
Although the growth in the rate of healthcare costs has slowed since May, Blitzer said that's not necessarily a permanent trend.
"It's encouraging but I don't think it's earth shattering. We see movements every month and the 12 month changes go up and down," he said. "There is nothing in this report that says that healthcare costs are only going to go up with the rate of inflation. Healthcare continues to account for more and more of the economy. It'd be nice if we could stabilize that and spend the money for other things."
The November S&P indices also found that:
Claim costs associated with hospital and professional services for patients covered undercommercial health plans rose 7.79% over the year ending in November, down from 8.19% for the year ending in October 2010.
Medicare claim costs for the same services rose 3.74% from the previous year --the lowest annual growth rate for Medicare claims costs since June 2007, when the rate of growth was 3.55%. In the year ending October 2010, Medicare claims costs rose 4.18%.
"Since May 2010, most of the indices annual growth rates have declined month-to-month," Blitzer said. "Commercial and Medicare indices showed annual deceleration of 0.40% and 0.45%, respectively, compared to October. Likewise, the hospital and professional services indices annual rates decelerated by approximately 0.40% each in November compared to the previous month."
Blitzer said growth rates for services covered by Medicare are approaching new lows. "The Medicare composite posted an annual growth rate of +3.74% in the 12-months ending in November. The lowest rate was +3.47% in December 2006," he said. "Looking even closer at the sub-indices, we see that the annual growth rates for Medicare services provided at hospitals has, in fact, hit the lowest rate in the six-year history for these data, +2.71%."
The S&P indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.
Healthcare workplace bias complaints jumped 21.7% in fiscal 2010, a record pace that outstripped the also unprecedented 15.9% rate of growth for bias complaints in the overall workforce, the U.S. Equal Employment Opportunity Commission said.
Overall, EEOC fielded a record 99,992 private sector workplace discrimination charge filings in fiscal 2010, which ended Sept. 30. Healthcare workplace complaints represented about 7.4% of all complaints filed in 2010, and grew from 6,078 charge filings in 2009, to 7,403 filings in 2010. Hospitals saw the number of complaints filed rise from 2,484 in fiscal 2009, to 2,945 in fiscal 2010, an increase of 18.6%, EEOC said.
EEOC attributed the surge in charge filings to multiple factors, including economic conditions, increased diversity, demographic shifts in the labor force, employees’ greater awareness of the law,
improvements in EEOC’s intake practices and customer service, and greater accessibility to the public.
In the healthcare workforce, race was cited in 2,934 (39.6%) of bias claims, followed by 2,642 (35.7%) claims of “retaliation.” Disability bias was alleged in 2,074 (28%) complaints, sex bias was alleged in 1,812 (24.5%) of complaints, age bias was alleged in 1,560 (21.1%) of complaints, and national origin bias was alleged in 794 complaints (10.7%). Violations of Title VII of the Civil Rights Act were alleged in 5,278 (71.3%) of all bias complaints filed in the healthcare sector.
In the overall workforce, and for the first time since the EEOC became operational in 1965, retaliation under all statutes (36,258) surpassed race (35,890) as the most frequently filed charge, while allegations based on religion (3,790), disability (25,165) and age (23,264) increased.
EEOC data for the overall workforce in fiscal 2010 showed its mediation program ended the year with a record 9,370 resolutions, 10% more than fiscal 2009, with more than $142 million in monetary benefits. At the end of fiscal 2010, EEOC was conducting 465 investigations, involving more than 2,000 charges. EEOC resolved 7,213 requests for hearings in the federal sector, secured more than $63 million for plaintiffs, and resolved more than 4,600 federal sector appeals -- 400 more than in fiscal 2009.
Even with the record-setting pace of new complaints, EEOC said it has reduced rate of growth of its backlog of cases. EEOC ended fiscal 2010 with 86,338 pending charges -- an increase of 570 charges, less than 1%. Between fiscal years 2008 and 2009, EEOC's pending inventory increased 15.9%.
“We are pleased to see that our rebuilding efforts are having an impact on how efficiently and effectively the commission enforces the civil rights laws protecting the nation’s workers,” said EEOC Chair
Jacqueline A. Berrien. “Discrimination continues to be a substantial problem for too many job seekers and workers, and we must continue to build our capacity to enforce the laws that ensure that workplaces are free of unlawful bias.”
In fiscal 2010, EEOC filed 250 lawsuits, resolved 285 lawsuits, and resolved 104,999 private sector charges, and secured more than $404 million in from employers -- the most money ever recovered by EEOC through the administrative process.
All major categories of charge filings in the private sector -- which include charges filed against state
and local governments – increased, including alleged discrimination under Title VII; the Equal Pay Act; the Age Discrimination in Employment Act; the Americans with Disabilities Act; and the Genetic Information Nondiscrimination Act, EEOC said.
China, India, and Brazil are gaining ground in their ability to make the latest medical technology innovations, and may surpass developed countries in innovative healthcare delivery over the next decade, according to a PcW report published this week.
PwC's Medical Technology Innovation Scorecard: The race for global leadershipfound thatgrowth in these emerging market economies isattracting innovation resources and activity, allowing these countries to take the lead in developing a new generation of small, faster, more affordable medical devices.
"A confluence of social, demographic, economic and technology changes is altering the dynamics of the medical technology field," said PwC analyst Mike Swanick. "As a result, ecosystems that promote medical technology innovation – with supportive elements such as access to financing, scientific knowledge and patient interaction – are being established around the world, These changes are creating opportunities for companies – and entire nations – that are able to adapt to a rapidly evolving environment."
The PwC report assessed the capacity of nine countries to adapt to the changing nature of innovation: Brazil, China, France, Germany, India, Israel, Japan, the United Kingdom and the United States.
While there has been anecdotal evidence that the center of innovation is moving away from the United States, PwC says its report quantifies five factors, using 86 different metrics, to evaluate how well each nation promotes the advance of innovation, looking at the past five years and projecting change over the next decade to 2020.
The Innovation Scorecard ranks the overall capacity of each country on a scale of 1 to 9 with 9 being the highest score. A top-line view of the report finding reveals:
The U.S. currently holds its position as the global leader in medical technology innovation, and because of decades of innovation dominance, it continues to show the greatest capacity for medical technology innovation. The U.S. currently has a total score of 7.1.
The scores of the other developed nations (United Kingdom, Germany, Japan, and France) fall in a band of 4.8 to 5.4. Germany and the United Kingdom demonstrate the strongest support for innovation, and Japan the weakest.
Israel ranks near the level of the European nations, a reflection of its strong capacity to foster innovation.
China, with its economic growth engine, scores 3.4, ranking it higher than India and Brazil, each of which scored 2.7.
Looking to the future, the United States is expected to continue to lead in medical technology innovation, but also will lose ground to other countries during the next decade. The innovation scorecard also projects relative declines for Japan, Israel, France, the UK and Germany. By contrast, China, India and Brazil are likely to see gains during the coming decade.
China, which has shown the largest improvement in its medical technology innovation capacity during the past five years, is expected to continue to outpace other countries and reach near parity with the developed nations of Europe by 2020, PwC said.
PwC analyst Simon Friend said that if developed counties do not step up investment in innovation, over the next decade new markets will surpass developed countries in innovative healthcare delivery. "Stimuli for new technologies [are] being built through the education system and we will see businesses focusing on new markets for new ideas and expanding sales bases," Friend said.
The innovation scorecard examined where each of the nine countries evaluated stands in relation to five "pillars" that make the United States a leader in medical technology innovation: Financial incentives such as reimbursements for adoption of new technologies; resources for innovation, such as academic medical centers; a supportive regulatory system; demanding and price-insensitive patients; and a supportive investment community of venture capitalists and other investors, PwC said.
The scorecard showed that the innovation ecosystem itself is changing as the nature of medical technology innovation evolves. Some of this transformation is being driven by changes in the United States, such as more expensive, less-predictable regulatory approvals, an increased focus on value and cost-effective solutions in healthcare and increasingly international investments in research and development.
Other dynamics are the result of changes abroad, including increasing investment in local academic medical centers; investment in research programs; the return of foreign-educated scientists and doctors to their homelands; advancement of mobile health technologies that expand access to care; and a focus on the lean, frugal and reverse innovation necessary to deliver faster, better, cheaper and more effective healthcare solutions in these markets, PwC says.
As a result, medical technology companies increasingly are seeking clinical data, new-product registration and first revenue in markets outside the United States that are becoming more attractive and supportive of new innovation. Medical technology innovators already are going first to market in Europe and, by 2020, likely will move into emerging countries before entering the United States, PwC says.
Despite the size of the markets in China, India and Brazil, their global leadership in medical technology innovation is not preordained. Factors related to intellectual property protection, difficulty of doing business in some emerging countries and weak local supplier networks could make these markets less attractive, despite their size, and could hinder these nations' efforts to assume innovation leadership. PwC said.
