We all know our devices need to be purchased, used and reimbursed.

As R&D professionals, issues such as insurance coverage, codes, reimbursement, purchasing and payment are not always top of mind. To be competitive in today’s environment, it is absolutely critical for medical device design teams to have a deep understanding of how our devices get purchased and apply that knowledge when making design decisions.

Working with a good understanding of how our products will be evaluated increases the likelihood of our new devices being purchased and adopted by users.

In the past, medical devices were purchased on the recommendation of the physician. When they needed a new device they would engage with companies, evaluate the options and make a purchase decision based on personal preferences. This single stakeholder purchase path made design decisions very straightforward.

This is no longer the case with medical devices in today’s healthcare system.

Today, purchasing in hospitals is commonly directed by value analysis committees or VACs. Generally speaking, hospitals get the majority of their revenue from insurance reimbursement. These VACs are in place to ensure that the equipment, services and products their hospitals provide will meet their standards and be reimbursed by insurers (gotta get paid, right?).



Here are the four key areas hospital VAC’s evaluate when purchasing new products and the questions you and your team should be asking yourselves when developing new devices.


  1. Clinical Value
    • Is the product innovative and new?
    • Does the product improve usage?
    • Does the product create desirable outcomes?
    • Is the product safe for long term use?
    • Is there extensive evidence of clinical outcomes?
  2. Unmet need
    • Is there an absence of therapy for this condition?
    • Are other solutions difficult, uncomfortable or cumbersome to use?
    • Do other solutions produce inadequate results?
    • Are there ways to perform the therapy that reduce complexity?
    • Are there gaps in the care of this condition that could be solved?
  3. Disease Burden
    • What is the incidence and prevalence of the condition?
    • Is the condition severe?
    • Is the condition very difficult to manage?
    • Is there a high mortality rate associated with this condition?
    • Are there big healthcare cost implications with this disease that could be reduced?
  4. Economic Value
    • Does the price reflect the economic value of the product?
    • Does the product help me save more money over alternatives?
    • Is there a large budget impact?