Medical devices are small part of total healthcare expenditures

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Among the major findings of a 21-year analysis by the Advanced Medical Technology Association (AdvaMed), researchers found that medical devices made up a relatively small share of U.S. health expenditures, representing only 5.9 percent of the total in 2009.

In their June report, entitled "Estimates of Medical Device Spending in the U.S.," the authors studied medical devices and diagnostics; the contribution of related product costs to national health expenditures; and overall trends of the products compared to other medical products and the consumer price index. As a percentage of national health expenditures, medical device spending has risen only slightly from 1989 to 2009, climbing from 5.3 percent to 5.9 percent over that period. National health expenditures totaled $2.48 trillion in 2009, while medical device spending totaled $146.9 billion. The researchers stated that medical device spending remained virtually constant since 1992.

During the 21-year period, medical device prices increased at an average annual rate of 1 percent, compared to the consumer price index increase of 2.8 percent, the medical care consumer price index increase of 4.7 percent and the medical care services consumer price index increase of 5 percent, the authors found.

Meanwhile, among the major factors that contributed to changes in medical practice, the study authors reported the development of new procedures; improvements in existing procedures; increases in the number of procedures performed because of increased safety; development of new pharmaceutical products; and the development and use of new and improved medical devices and diagnostics.

“Medical devices and diagnostics are central to medical practices, but spending on advanced medical technology is consistently a small and slow growing portion of national health expenditures,” said Ann-Marie Lynch, AdvaMed’s executive vice president of payment and healthcare delivery policy. “The highly priced competitive nature of the industry also is striking. Unlike most other areas of medicine, the prices of medical devices have actually been growing more slowly, not only compared to medical consumer price index, but also as compared to consumer price index as a whole."

Click here to view the entire report.