New medical technologies—pharmaceuticals, medical devices, and procedures—often allow major improvements in the outcomes of medical care, but they are also widely believed to be a leading cause of increasing costs. Selective adoption of new technologies, the taking on of only those technologies for which the medical benefits exceed the costs to society of developing and using them, is a crucial element in the quest to control health care costs while preserving or enhancing the quality of care.
This report focuses on adoption of innovative medical technologies by managed care organizations (MCOs). The project had two primary objectives: (1) to understand current processes of MCOs for making coverage, medical-necessity, and payment decisions involving emerging medical technologies, and how device developers and manufacturers prepare for and participate in these processes; and (2) to identify ways that private, voluntary action by the managed-care and device industries individually or jointly might improve—for the benefit of society—the processes by which new medical technologies are developed, evaluated, and adopted or rejected for coverage.
Extensive information about MCO processes was collected through confidential, in-depth interviews with eight manufacturers of innovative medical devices and medical directors of nine California MCOs, five of which are affiliated with national MCOs. The preliminary findings from these interviews were presented at a meeting on October 7, 1999, at which representatives of manufacturers, MCOs, and the sponsoring organizations—the State of California's Goldstrike Partnership, the Economic Development Administration