Healthcare Business News

CRT-P pacemaker prices drop 12% as hospitals step up bargaining pressure

By Jaimy Lee
Posted: May 12, 2014 - 1:15 pm ET

The average price paid by hospitals for cardiac implantable resynchronization pacemakers has dropped 12% over the last year, according to the most recent Modern Healthcare/ECRI Institute Technology Price Index.

The index looks at monthly and annual price data for about 30 supply and capital items purchased by hospitals and other healthcare providers, based on three-month rolling averages.

CRT-P pacemakers, which are newer versions, cost about $6,250 on average, while the average price of older implantable pacemakers is roughly $4,000. The price of the older pacemaker models was flat year over year.

The drop in price for CRT-P pacemakers may be due, in part, to cost-cutting programs that hospitals are implementing to lower the overall costs of medical supplies, especially so-called physician preference items, usually costly implantable devices such as pacemakers and stents.

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“It's an area that hospitals are targeting for cost reduction,” said Tim Browne, director of ECRI's PriceGuide service. “It's always been a higher cost item in the supply world.”

It's unclear why the prices of CRT-P pacemakers are dropping at a different pace than traditional pacemakers, Browne noted.

Five manufacturers sell pacemakers in the U.S.—Biotronik International, Boston Scientific Corp., St. Jude Medical, Medtronic, and Sorin Group.

These companies have likely been facing price pressure for their devices in recent years because hospitals have started to implement cost-cutting strategies that target the costs of the most expensive devices they purchase. Hospitals always have negotiated prices but in recent years have been driving harder bargains as they face declining reimbursements and lower patient volumes affecting their revenue.

While pacemakers have been on the market for 50 years, newer models, such as Medtronic's MRI-compatible pacemaker, continue to generate interest from hospitals. It was approved by the Food and Drug Administration in 2011 and was the only pacemaker of its kind approved in the U.S. until Biotronik's version received approval in May. These pacemakers cost between $3,200 and $7,500.

Correction: This story initially incorrectly described the number of companies that have received approval for MRI-compatible pacemakers. Biotronik received approval for its MRI-compatible pacemaker in May.

Follow Jaimy Lee on Twitter: @MHjlee

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