The Issue
The prices that hospitals and other purchasers pay for medical devices are negotiated with manufacturers and commonly kept confidential. Past research shows that prices vary significantly for similar implantable medical devices, suggesting the potential for cost savings. Six percent of health care spending in the United States, and 7 percent in the European Union, goes toward medical devices.
To learn more, Commonwealth Fund–supported researchers compared the prices that large hospitals in the U.S. and four E.U. countries — France, Germany, Italy, and the United Kingdom — reported paying for cardiac implants between 2006 and 2014. The study, published in Health Affairs, specifically focused on two types of implants: cardiac stents and cardiac rhythm management devices. All European prices were converted to U.S. dollars.
$1,000 additional mean amount that U.S. hospitals paid for a drug-eluting stent compared to German hospitals between 2006 and 2014.
What the Study Found
- The prices that U.S. hospitals paid for cardiac implants were generally higher than what E.U. hospitals paid. German hospitals typically paid the least.
- Some U.S. prices were six times as high as German prices. For instance, the mean price of a dual-chamber pacemaker in 2014 was $1,400 in Germany, but $4,200 in the U.S. That same year, the mean price for a drug-eluting cardiac stent (which releases medication) was $340 in Germany versus $1,400 in the U.S.
- Mean prices varied significantly among E.U. countries. Prices of stents and pacemakers were higher in Italy and France than in the U.K. and Germany.
- Prices of both drug-eluting and metal cardiac stents declined during the study period in four of the five countries. However, prices of cardiac defibrillator devices remained more stable.
- Prices varied significantly among the individual hospitals within each country, except in France. The volume of devices purchased by hospitals was only weakly correlated to price.
The Big Picture
The variation in prices paid for similar and identical cardiac implants suggests that device effectiveness is not the only factor influencing price setting. Price variation cannot be explained solely by differences in regulatory requirements: prices varied among E.U. countries, which operate in a single harmonious market with no trade barriers. In-country price differences suggest that various aspects of the purchasing relationship between hospitals and manufacturers may be contributing to the difference seen. Past research has pointed to factors such as physician preference for using certain devices. Competition and other market factors may also play a role. Additional research is needed to pinpoint mechanisms that policymakers and others can use to help control device prices.
The Bottom Line
The prices that large hospitals in the United States and European Union pay for cardiac implant devices varies significantly across countries and among hospitals within the same countries.
