Appraising the Value of Medical Device Innovation in South Korea: Multi-Criteria Decision Analysis Application for Reimbursement Coverage Decision-Making
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Since the year 2000, the reimbursement coverage and pricing rule for medical devices in South Ko- rea has been evolving gradually with the introduction of the ‘Value Appraisal Standard (VAS)’ sys- tem in March 2006 to recognize the premium value of innovative medical devices. Nevertheless, the VAS system has been criticized due to the lack of objectivity and its insufficient operability. Over the last decade, the quest for a more comprehensive, structured and transparent reimbursement coverage decision-making process has prompted research into alternative decision-making frameworks. In this regard, multi-criteria decision analysis (MCDA) arose and has gained more attention as an ap- proach to support healthcare decision-making involving multiple and conflicting criteria. In 2014 the task force initiated by both Ministry of Health and Welfare and Health Insurance Review and As- sessment Service and composed of various stakeholder representatives was formed to improve the re- imbursement coverage and pricing rule by leveraging international practices from foreign countries and to develop the most feasible pricing rule in the current healthcare policy environment. The task force studied the principles, processes and practices for reimbursement coverage and pricing of medi- cal devices in other countries and also deliberated MCDA for improved and fair recognition of the value of innovative medical devices. The consensus for the improved reimbursement coverage and pricing rule with MCDA was reached among the stakeholders and placed into official regulation effec- tive in January 2015. The MCDA application is expected to contribute to better innovation value rec- ognition and also transparent and reasonable operation in the decision-making process.
Abstract
Since the year 2000, the reimbursement coverage and pricing rule for medical devices in South Ko- rea has been evolving gradually with the introduction of the ‘Value Appraisal Standard (VAS)’ sys- tem in March 2006 to recognize the premium value of innovative medical devices. Nevertheless, the VAS system has been criticized due to the lack of objectivity and its insufficient operability. Over the last decade, the quest for a more comprehensive, structured and transparent reimbursement coverage decision-making process has prompted research into alternative decision-making frameworks. In this regard, multi-criteria decision analysis (MCDA) arose and has gained more attention as an ap- proach to support healthcare decision-making involving multiple and conflicting criteria. In 2014 the task force initiated by both Ministry of Health and Welfare and Health Insurance Review and As- sessment Service and composed of various stakeholder representatives was formed to improve the re- imbursement coverage and pricing rule by leveraging international practices from foreign countries and to develop the most feasible pricing rule in the current healthcare policy environment. The task force studied the principles, processes and practices for reimbursement coverage and pricing of medi- cal devices in other countries and also deliberated MCDA for improved and fair recognition of the value of innovative medical devices. The consensus for the improved reimbursement coverage and pricing rule with MCDA was reached among the stakeholders and placed into official regulation effec- tive in January 2015. The MCDA application is expected to contribute to better innovation value rec- ognition and also transparent and reasonable operation in the decision-making process.
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