News & Commentary

Device Prices Higher For U.S. Hospitals

Hospitals in the United States generally pay more for cardiac stents and cardiac rhythm management devices (pacemakers and cardioverter defibrillators) than do their counterparts in European countries and, in the case of Germany, much more, according to a study in Health Affairs.

The study, published in the October issue of the journal, looked at what hospitals paid for these medical devices in the United States, United Kingdom, Germany, France, and Italy. The biggest difference was between American and German hospitals.

For example, the average price for a dual-chamber pacemaker in Germany was $1,400 in 2014; in the U.S. it was $4,200. The mean price for a drug-eluting cardiac stent was $340 in Germany and $1,400 in the U.S.

Authors Martin Wenzl and Elias Mossialos of the London School of Economics examined data from 2006 to 2014 from a large hospital panel survey to draw their conclusions for the study, one of which illustrated how prices changed. For instance, the $340 cited above that German hospitals paid for a drug-eluting stent in 2014 represented a significant drop-off from the $1,440 the devices cost German hospitals in 2006.

In fact, the prices for drug-eluting stents declined during the study period for all the countries, except for France, where they remain stable. The prices for cardiac defibrillators remained stable in all the countries. The study also found significant variation among hospitals in each country except for France. Wenzl and Mossialos suggest that the effectiveness of the devices was not the only factor influencing prices: “Prices of most device categories also varied between E.U. countries, despite the absence of formal trade barriers in the E.U. single market. Variation in prices of similar and identical devices suggests that factors other than their comparative effectiveness determine prices.”

Manufacturers may be determining prices partly by gauging what buyers are willing to pay, the authors state. It’s a way to increase profits.

Policy changes should be considered, the authors contend. Those could include rules that affect the level of competition and market power of manufacturers, use of technology assessment to dole out payments, and the volume of procedures performed at hospitals.