Medical Devices Reimbursement Market

Market Overview

The global market for Medical Devices Reimbursement was valued at USD 408.4 billion in 2020 and is expected to reach USD 970.89 billion in 2030 expanding at a compound annual growth rate (CAGR) of 10.1% from 2022 to 2030.

The term "medical devices reimbursement" refers to the payment that is made by private insurers to healthcare providers in order to compensate such providers for the costs that were incurred as a result of the use of medical devices. In most cases, the patient's medical costs, including the cost of using medical devices, are paid for by the patient's health insurer or by the government. There are a number of variables that are driving the market, including technological developments in Electronic Medical Records (EMR), an increase in the number of instances of chronic illnesses, and an increasing requirement for reimbursement. The amount that will be reimbursed is determined using one of two approaches: full reimbursement of individual medical devices, or payment based on the outcome of the entire medical treatment during which a medical device was utilised.

Market Dynamics

Medical Devices Reimbursement Market Drivers

• Increasing knowledge about health insurance

The market for the reimbursement of medical equipment is expanding as a direct result of increasing consumer knowledge regarding health insurance coverage, particularly in emerging nations. The increasing cost of healthcare, in conjunction with favourable government policies, is increasing the number of individuals who select for pay services. This will enhance the worldwide market for medical device reimbursement throughout the period covered by the projection.

According to the World Health Organization (WHO), by the year 2020, major chronic conditions like cancer, diabetes, respiratory disorders, cardiovascular diseases, and other life-threatening diseases are expected to account for nearly 73% of all deaths and approximately 60% of the global disease burden. In addition, it is projected that around 79 percent of fatalities caused by these illnesses occur in nations that are still considered to be in a state of development.

Chronic obstructive pulmonary disease (COPD), cardiovascular disease, stroke, and cancer are the top four causes of mortality in the United States. These disorders may be avoided, and if caught early on, treatment will not only be less expensive but also more effective. These disorders add an additional expense of around USD 7,900 per individual. The economic burden of cardiovascular conditions is expected to worsen in the coming years, which will fuel market growth. According to an article that was published by ScienceDaily, the cost of cardiovascular diseases will exceed USD 1 trillion by 2035 for the United States, and the number of Americans who will have these diseases will rise to 131.2 million (45 percent). This indicates that the economic burden of cardiovascular conditions will increase in the coming years.

Medical Devices Reimbursement Market Restraints

• Existence of governing bodies and agencies

It is anticipated that the existence of many regulatory bodies would stifle the expansion of the market for medical device reimbursement, which will ultimately result in a more time-consuming process for the licencing of medical devices.

The time-consuming application and review procedure for medical device reimbursement is another factor that is preventing the market for medical devices from expanding.

Segmental Analysis

The Market for Medical Devices Reimbursement Market is segmented into the following categories: Payer, Healthcare Setting and region.

Based on Payer the market is divided into the following: Public cand Private. In the year 2020, the private sector of medical device reimbursement accounted for the biggest revenue share of 65.1%. The existence of a significant number of private firms in the market may be credited with the expansion of the category. [Cause and effect] Over the course of the time under consideration, it is anticipated that the segment will maintain its leadership position. In addition, the growing incidence of cancer and diabetes as well as the rising need for improved treatment are further factors that will contribute to the expansion of this market throughout the course of the projected year. In addition, the evaluation criteria that are now in place for reimbursement take into account the cost of utilising a device or carrying out a treatment, but they do not take into account the value of the technology that is being utilised. Because of the lower average reimbursement value, many public healthcare settings do not have access to medical equipment that utilise cutting-edge technology.

There are many important factors that are contributing to the expansion of the public medical device reimbursement segment. Chief among these are the expanding use of public payers in both developing and developed markets, as well as the rising rate of innovation in the production of new medical devices. In 2017, the NHS provided treatment to more than 8.5 million patients who did not require immediate attention, and over 135,000 individuals got long-term care through the NHS. It is anticipated that the market would expand due to the growth in the proportion of elderly people in the population as well as the prevalence of chronic diseases.

Based on Healthcare setting the market is divided into the following: Hospitals and Outpatient Facilities. In 2020, the hospital sector represented for 53.4 percent of the market's total revenue, making it the dominant player in the industry. It is projected that the segment would continue to have a dominant position during the projection period. Further fueling the sector's growth are demographic shifts that see an increase in the proportion of elderly people in the population as well as the incidence of chronic illnesses. The rising incidence of chronic illnesses is one of the primary factors propelling the demand for medical device reimbursement in institutional settings such as hospitals. Numerous research-based innovations in medical technology are tested out first at public hospitals before being made available to commercial institutions for purchase. The private healthcare settings are responsible for maintaining a buying budget, some of which is comprised of the excess money collected directly from patients. As a consequence of this, they have a greater availability of cutting-edge medical equipment.

It is predicted that the outpatient facilities category would see the highest CAGR of 11.4% during the projection period due to increased expenditures in R&D as well as the growing frequency of chronic illnesses. Additionally, the increasing demand for medications and the development of more efficient methods for their manufacture are expected to further push the sector.

Regional Analysis

With a revenue share of 50.0 percent in 2020, North America led the market for medical device reimbursement and is predicted to continue to do so for the duration of the forecast. Over the projection period, it is expected that rising rates of a number of severe illnesses would boost the market. In addition, when compared to other areas, the region's reimbursement mechanism is the most sophisticated. Committees update the list of devices every two years to include the newest goods in the reimbursement scheme.

The need for medical device reimbursement is projected to rise as regulatory landscapes change and pressure on the healthcare sector to save costs grows. Due to this during the course of the projected period, the market is anticipated to increase. The market in Europe is anticipated to be driven by an increase in medical device demand and healthcare facilities.

The National Association of Statutory Health Insurance Funds (GKV) is the biggest payer institution in Germany, which has about 100 statutory health insurers. However, the Techniker Krankenkasse (TK) is the biggest health insurance financing organisation in Germany based on the number of covered people; in 2020, it offered insurance to around 10 million people. Additionally, private health insurance firms are essential in reimbursing the cost of medical equipment. Numerous private health insurers provide coverage to about 9 million Germans.

Due to rising healthcare costs, an increase in the frequency of chronic diseases, and rising resource demand in emerging nations like China, Japan, South Korea, and India, Asia Pacific is expected to have considerable expansion throughout the projection period. To simplify and create a highly effective healthcare management system, these nations are embracing the policies used by the U.S. and European nations.

South Korea is quickly rising to the top of the global rankings for medical device reimbursement services. Medical devices reimbursement market growth is anticipated to be aided by rising demand for high value pharmaceutical and biologic, medical device, and temperature-sensitive shipments. High-end medical equipment are imported from the EU, Japan, and the US, which together account for 60.0% of the market's demand and where the US holds the highest share. To maintain regulatory compliance and get medical device certification, businesses exporting medical technology equipment to South Korea must designate a representative or importer.

Recent Developments

Magellan Health, Inc. was purchased by Centene Corporation in January 2021 for $95 per share in cash, giving the business a $2.2 billion market value. The expansion of the firms will be aided by this purchase.

Medical Devices Reimbursement Market Segmentation

By Payer

• Public
• Private

By Healthcare Setting

• Hospitals
• Outpatient Facilities

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East