Statement of Advanced Medical Technology Association

AdvaMed is pleased to present this testimony on behalf of the world’s leading medical technology innovators and the patients we serve. AdvaMed represents over 800 of the world’s leading medical technology innovators and manufacturers of medical devices, diagnostic products and medical information systems. Our members are devoted to helping patients lead longer, healthier and more productive lives through the development of new lifesaving and life-enhancing technologies.

AdvaMed shares the concerns of the Members of Congress, the Administration and millions of working Americans about the number of people in our country lacking access to affordable health insurance today. Our nation enjoys the best health care system in the world, and everyone should have full access to it. While today’s market-based system provides insurance coverage to the majority of Americans, and along with it access to most of the latest, breakthrough technologies, some 43 million Americans are currently uninsured.

To bridge the current gaps in insurance coverage, AdvaMed has consistently supported maintaining tax incentives to encourage companies to offer health benefits to their employees, as well as expanding tax incentives to allow individuals to more affordably purchase coverage. As supporters of market-based health care and competition, AdvaMed also believes consumers should have a wide choice of health plans and coverage options that allow them to select those that best fit their needs.

To expand the number of choices available, AdvaMed supports the creation of Individual Membership Associations or Association Health Plans to allow groups to leverage size for more affordable health options, as well as the expansion of Medical Savings Accounts, which have already helped address the insurance needs of a select group of previously uninsured Americans. To address the many problems facing individuals with uninsurable medical conditions, AdvaMed also supports efforts to encourage states to offer "risk pools" that help them access insurance that will meet their complex and costly health care needs.

America is on the cusp of a revolution in medical technology. Through advances in technology we can detect diseases earlier when they are easier and less costly to treat, provide more effective and less invasive treatment options, reduce recovery times and enable people to return to work much more quickly. Insurance coverage and adoption of medical advances is crucial not only for the health of America’s insured workers, but also helps lower overall health care costs.

Medical technology has advanced to the point where it is fundamentally transforming our health care system in ways that improve quality and reduce costs. For example:

• Three types of laparoscopic surgery have generated approximately $1.9 billion annually in increased productivity by enabling people to return to work more quickly, according to a study by DRI-McGraw Hill.
• Angioplasty and other minimally invasive heart procedures, for example, have greatly reduced the need for riskier, more expensive heart bypass procedures. An angioplasty procedure costs $20,960 on average, compared to $49,160 for open-heart surgery. Surgeons can complete an angioplasty procedure in 90 minutes compared to 2-4 hours for open bypass surgery. Patients can leave the hospital in one day instead of 5-6 days, and recovery only takes one week rather than 4-6 weeks for bypass.
• Total knee replacement produces an average one-time health care cost savings of $50,000 per patient; a savings of $11.5 billion in 1994 alone, according to the American Academy of Orthopedic Surgeon (AAOS).

A recent article in the Washington Post highlights another of the many advances transforming health care delivery: a health care information system that alerts doctors at Brigham and Women’s hospital to potentially dangerous medical decisions. The system has cut the medication error rate at Brigham by 86% compared to 10 years ago.

Information systems like these can dramatically improve the safety and efficiency of health care delivery and help reduce health care costs. Automation in the insurance industry alone could save an estimated $20 billion. That is why both the President’s Information Technology Advisory Committee and the Institute of Medicine in its recent report on health care quality have stressed the need for a new health information infrastructure.

Steady declines in mortality rates, medical procedure times, hospital stays and patient recovery times all illustrate the emergence of the New Health Economy. Gains in workforce productivity and accelerating declines in disability rates point to this shift as well.

In order to reap these benefits, advanced medical technologies must be rapidly assimilated into the health care system. The Institute of Medicine’s recent report, "Crossing the Quality Chasm," underscored this point, stating: "Narrowing the quality chasm will make it possible to bring the benefits of medical science and technology to all Americans in every community…and this in turn will mean less pain and suffering, less disability, greater longevity, and a more productive workforce."

In a recent statement on the Medicare Trustees’ Report, Treasury Secretary and Medicare Trustee Paul O’Neill cited this IOM report in highlighting "tremendous potential for improvements in the health care sector." AdvaMed shares this concern, as well as Secretary O’Neill’s understanding of the importance of adopting new technologies and medical practices that can transform the health care sector by improving quality and reducing costs. As Chairman of Alcoa, O’Neill championed the adoption of so-called "disruptive" technologies as the solution to rising health care costs. In a recent Forbes article, O’Neill stated: "It is possible to improve the health and medical care value equation by as much as 50%."

Again, AdvaMed applauds Congress for addressing the many needs of the uninsured in America. We look forward to working with the Congress and the Administration on efforts to help increase access to affordable coverage, as well as improve the quality, efficiency and cost effectiveness of the health care system through innovative medical technology.