MEDICAL DEVICES REIMBURSEMENT MARKET ANALYSIS

The global medical devices reimbursement market was valued at US$ 501.8 Mn in 2022 and is forecast to reach a value of US$ 970.7 Mn by 2030 at a CAGR of 8.6% between 2023 and 2030. The global medical devices reimbursement market is experiencing strong growth due to the increasing prevalence of chronic diseases and growing geriatric population worldwide. Moreover, increasing cost of healthcare and supportive government initiatives/programs are expected to boost the growth of the market. However, factors such as complex framework and limited coverage and reimbursement are expected to hamper the market growth.

Global Medical Devices Reimbursement Market: Regional Insights

Based on geography, the global medical devices reimbursement market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Among regions, North America is expected to gain highest share in the market during the forecast period owing to the rising prevalence of chronic diseases, growing geriatric population, increasing demand for medical devices, and increasing cost of healthcare in the region. For instance, rise in burden of chronic diseases is expected to increase or has increased the need/demand for affordable and quality healthcare. According to the U.S. Centers for Disease Control and Prevention (CDC), chronic diseases, such as cardiovascular diseases, cancer, and diabetes, are the leading causes of death and disability in the United States.

Europe and Asia Pacific are also expected to witness robust growth in the global medical devices reimbursement market due to the rise in burden of chronic diseases, growing geriatric population, increasing demand for affordable and quality healthcare, and increasing cost of healthcare in these regions. For instance, the Government of India has shifted its focus to rural healthcare, with a range of programmes aimed at making it more accessible and affordable. National Rural Health Mission help states and union territories in strengthening their healthcare systems to ensure universal access to equitable, affordable, and high-quality healthcare services.

Figure 1. Global Medical Devices Reimbursement Market Share (%), by Region, 2023

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Global Medical Devices Reimbursement Market Drivers:

High prevalence of chronic diseases to propel market growth

One of the key factors expected to augment growth of the global medical devices reimbursement market during the forecast period is the increasing prevalence of chronic diseases worldwide. Such a high burden of chronic diseases leads to an increase in demand for affordable and high-quality healthcare services, and it is expected to propel the market growth. According to the World Health Organization (WHO), non-communicable diseases (NCDs) kill over 41 million people each year, equivalent to 74% of all deaths worldwide. Cardiovascular diseases account for most NCD deaths, or 17.9 million people every year, followed by cancers (9.3 million), chronic respiratory diseases (4.1 million), and diabetes (2.0 million).

Growing geriatric population to drive market growth

Another factor which is driving the growth of the global medical devices reimbursement market is the rise in geriatric (aging) population around the world. For instance, aging population is prone to developing infections and associated complications, which in turn increased need for affordable healthcare services. According to the UN DESA’s (United Nations Department of Economic and Social Affairs) Population Division, 1 in 6 people in the world will be over the age 65 by 2050, up from 1 in 11 in 2019. In many regions, the population aged 65 will double by 2050, while global life expectancy beyond 65 will increase by 19 years.

Global Medical Devices Reimbursement Market Opportunities:

Increasing cost of healthcare is expected to provide significant growth opportunities for players in the global medical devices reimbursement market. For instance, persistent increase in health care costs is driving stakeholder interest in reimbursement. According the CMS (Centers for Medicare & Medicaid Services), national healthcare expenditure in the U.S. grew 2.7% to US$ 4.3 trillion in 2021, or US$ 12,914 per person, and accounted for 18.3% of Gross Domestic Product (GDP). Moreover, today, chronic disease affects 50% of the population, and its care consumes more than 85% of health care costs. This in turn is driving the market growth.

Favorable or supportive government initiatives or programs are expected to offer lucrative growth opportunities for players in the medical devices reimbursement market. The government plays a vital role in shaping all aspects of the healthcare sector. For instance, Affordable Care Act (ACA), implemented in the U.S., focuses on expanding health insurance coverage to individuals with low income. The ACA aims to improve the quality of healthcare services and reduce the cost of care. Moreover, in February 2020, the Indian government levied a 5% ad-valorem health tax on imports of a variety of medical, dental, surgical, and veterinary devices.

Global Medical Devices Reimbursement Market Trends:

Digitalization in healthcare is a recent trend

Reimbursement pathways for digital health solutions are evolving at different speeds in different markets. For instance, in Europe, the Government of Germany, Sweden, and the United Kingdom are promoting the digitization of care and have standardized reimbursement pathways. Germany introduced Digital Healthcare Act in December 2019, which enables physicians prescribe digital health applications to patients and for them to seek reimbursement from healthcare insurers for these apps that meet certain criteria issued by the government. This trend is expected to continue over the forecast period, driving the growth of the market.

The outbreak of COVID-19 is another trend

The COVID-19 outbreak has led to an increase in demand for homecare services and/or products, which in turn has had a positive impact on reimbursement coverage for remote monitoring devices, home infusion devices, wearable devices, durable medical devices, and others. Moreover, in the U.S., private insurances witnessed around 4,000% increase in telehealth claims following COVID- 19 outbreak. The high demand for telehealth services is also expected to have positive impact the market growth. This trend is also expected to continue during the forecast period.

Global Medical Devices Reimbursement Market Restraints:

Complex framework to hinder growth of the market

One of the key factors expected to hamper the growth of the global medical devices reimbursement market is the complex framework. The healthcare reimbursement system is highly complex, and the main limitation is that the rules governing it change very often. Moreover, reimbursement rules also vary across countries. Reimbursement rates, in most countries, applicable for a medical device or procedure type are cost based, while in some countries, they are value based. It would be a good idea to become familiar with reimbursement policies ahead of time.

Limited coverage and reimbursement to hamper market growth

Another factor which is hampering the growth of the global medical devices reimbursement market is the limited coverage and reimbursement. Patients’ access to medical devices may be restricted by the limited coverage and reimbursement policies of some insurance companies and government programs. For instance, if a medical device falls into the fee-for-service or Tw-DRGs, NHI fully covers the cost of the medical device; however, if the medical devices fall into balanced-billing, NHI covers only part of the price, and the consumer pays the remaining amount.

Figure 2. Global Medical Devices Reimbursement Market Share (%), by Payers, 2023

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Global Medical Devices Reimbursement Market Segmentation:

The global medical devices reimbursement market report is segmented into Payers, Healthcare Setting, and Region.

Based on Payers, the market is segmented into Public and Private. Out of which, Public Segment is expected to dominate the medical devices reimbursement market during the forecast period and this is attributed to the growing need for cost-effective operations and rising prevalence of chronic diseases across the globe.

Private Segment is also expected to witness significant growth in the near future and this is owing to the large number of private players in the market.

Based on Healthcare Setting, the market is segmented into Hospitals, Outpatient Facilities, and Others. Out of which, Hospitals Segment is expected to dominate the market over the forecast period and this is attributed to the growing prevalence of chronic diseases and increasing demand for medical device reimbursement in large-scale settings, such as hospitals.

Outpatient Facilities Segment is also expected to witness significant growth in the near future and this is due to rise in burden of chronic diseases, increasing investments in R&D, and growing need for medicines and their cost-efficient production.

Global Medical Devices Reimbursement Market: Key Developments

In November 2022, RQM+ announced the launch of reimbursement division. RQM+ now provides comprehensive reimbursement services in addition to regulatory, quality, clinical and laboratory services – supporting market access throughout the entire product lifecycle for medical devices and diagnostics.

In May 2022, the French National Authority for Health provided certain recommendations for adding reimbursement on medical devices such as diagnostic imaging devices, cardiovascular and peripheral vascular devices, and interventional radiology devices.

In April 2021, Aditya Birla Health Insurance Company Ltd. launched a multi-platform campaign ‘#ABHIKaro’. The campaign promotes the idea of ‘Chuno Insurance Jo De Zyada’ (choose an insurance that gives so much more!) to prod the viewers to choose an insurance cover that goes beyond satisfying the bare minimum needs.

Global Medical Devices Reimbursement Market: Key Companies Insights

The global medical devices reimbursement market is highly competitive. This is attributed to the increasing prevalence of chronic diseases and increasing demand for medical devices, as a result, players in the market are focusing on launching novel products in the market.

Some of the key players in the global medical devices reimbursement market are BNP Paribas, CVS Health, Aviva, Allianz, Humana, Cigna, Aetna, Wellcare Health Plans Inc., UnitedHealth Group Inc., and Nippon Life Insurance Company, among others.

*Definition: Medical devices reimbursement is defined as the payment a private insurer pays to healthcare providers for costs the provider incurred while using medical devices.