JnJ-iBOT-wheelchairFacing soaring costs and an aging population, Medicare is looking to control costs ($333 billion in 2005) by tightening reimbursement on the $87 billion per year
medical device industry by requiring companies to prove that new products
have greater benefits and are worth higher payments than older ones. From this Miami Herald story:

In the past two years, the agency has turned down requests for
reimbursement for products including Johnson & Johnson's artificial
spine disk and Medtronic's continuous glucose monitor for diabetics.
Medicare is also cutting payments for treatments it had agreed to pay
for in the past, ranging from General Electric's X-ray machines to St.
Jude Medical's pacemakers.

Medicare spending is forecast to more than double to $677 billion in seven years as the huge
baby-boom generation reaches retirement age and the new
drug-reimbursement program takes effect. As a result, medical devices like $500 wheel chair seat cushions and $26,100 stair-climbing wheel chairs are slated for the reimbursement rejection file.

''Should we pay for anything that any physician wants to provide to any
patient?'' asks Steve Phurrough, director of coverage and analysis at
the Centers for Medicare & Medicaid Services in Washington. "I think
the answer to that is no.''

In the future, reimbursed medical devices must demonstrate improved efficacy, safety, and outcomes that result in a reduction in the cost of care. In the past, requests from health care providers played a much bigger role in deciding to reimburse for a particular medical device - now it's "show me the data."

The significance of this policy change is underscored by Medicare's market clout - 30% of hospital care and almost two-thirds of medical equipment in people's homes. Private payors frequently follow Medicare's reimbursement lead, so things cut from Medicare will not likely receive reimbursement from other payors.

Pictured right is the stair-climbing iBOT wheel chair.