Reimbursement Change Calls for Quality IVD

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To control the rising healthcare cost, China has established a prospective payment system (PPS) to reimburse hospitals for the treatment of patients; from diagnosis to full recovery. The PPS is based on a predetermined payment system, of a disease type, regardless of all the services provided to cure the patient. As of February 1, 2018, about 70% of provinces in China have implemented the new reimbursement policy and over 110 groups of ailments and diseases have been classified into this diagnosis-based plan.

The loss of revenue is to be shared by medical device manufacturers, distributors and healthcare providers. On the other hand, the demand for quality medical devices and the increasing need for IVDs will be on the rise and making up for some of the revenue losses.

The new reimbursement system, while providing better healthcare outcome, will put financial pressure on healthcare providers. Public hospitals in particular are under tremendous pressure to provide better care, upgrade their medical devices for more efficiency, and decrease impatient hospitalization stays. Additionally, public hospitals face increasing competition from private hospitals that are viewed as better care providers. All these factors will push public hospital leaderships to rapidly phase out medical devices and IVDs with lower quality and productivity.

With strong government support and robust influx of private capital these two areas are experiencing rapid growth; IVDs in hemodialysis and cancer screening. Additionally, one could expect stand-alone third-party testing centers to enter the space.

 

About China Med Device, LLC

China Med Device, LLC provides turn-key solutions for western medical device/IVD companies to enter China with regulation and commercialization services. Our CFDA regulatory services cover strategy, premarket submission, clinical evaluation, CRO, post market compliance as well as legal agent representation. Our commercial services cover market assessment research, reimbursement, partnership, distribution qualification and management. We have an office in Beijing, Suzhou and Boston. Our management team have 100+ years of combined experience in medical device and IVD and had been involved with 1,000+ CFDA certificates, 200+ western companies’ entry.