Medsider: Learn from Medtech and Healthtech Founders and CEOs - The Art of Medical Device Reimbursement

Episode Date: November 17, 2020

This interview is a continuation of a throwback mini-series I’ve been releasing over the past few weeks with some of my favorite Medsider guests.On this particular episode, I chatted with Randel Richner, a true expert in healthcare economics and reimbursement.  At the time of this interview, she was with Neocure Group, a company she founded and later sold to Intralign. Although this discussion is several years old and the audio quality isn’t ideal, Randel's insights are timeless. Here are some of the things we covered:A case study of how Randel helped save a medical device company from severe reimbursement implications.Randel’s unique “orchestra score” philosophy and how it aids in streamlining reimbursement strategies.The importance of defining the difference between how hospitals get paid and how physicians get paid.And what Randel means by the statement “comparative effectiveness is a code word for cost-effectiveness”.See more...

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welcome to MedSider, home for ambitious medical device and med tech upstarts. For those of you who are new to the program, this is a show where I interview interesting and dynamic people in the med tech and medical device arenas. And on today's call, we have Randall Richner. She is the founder of NeoCure Group, which is a consulting firm, special. specializing in health policy, reimbursement strategy, health economics, and global planning for biopharma and med tech companies. So welcome to the call, Rand. I appreciate you taking some time this morning. Great. Wonderful. Thank you, Scott. Okay, so I definitely want to get into what New Yorker is. I want to learn about your background as well, because I think it's very interesting.

But let's start out with maybe a recent case study of how you helped one of your clients, because I think that will give the audience a kind of a snapshot. or at least a peek into what you do at Neocure. Okay. A small cardiovascular company just called me about six months ago and showed me a policy that local coverage policy in the Northeast and asked me if it was going to essentially affect their technology, would they be at risk or of being carved out of the market with this local coverage policy?

there was a big player. There's essentially two or three players in the space, and the bigger cardiovascular company had essentially worked with the local carrier and carved out their indication in this small policy. So within a week, I had to work with this small company and say, indeed, this was a very serious problem. and rally the societies, physician groups, and others to write in immediately to the local carrier to say that carving out this one indication would have severe ramifications to the patients

and to treatment of, you know, with this technology wasn't available. So we fast forward two months, and fortunately because of that major effort, we were able to get that local policy changed to include the indication for this. But if they hadn't called, and this is showing, again, sort of some naivety about local coverage policies and monitoring and how important that is that one policy can lead to other policies, and you can essentially be shut right out of the market. So it was great that they called, and we tried to react to that, but, again, this is not how you want to work when you have a small company.

Right. So that was, but again, because of our connections and my long experience in the cardiovascular space, I was able to make some phone calls and get this done, but it was a real education for this small cardiovascular company. Okay, great. That's a really interesting story, and I don't want to really go into a lot of details, but I think that helps paint a little bit of a picture for the audience of what, you know, of what you do at NeoCure.

And so starting there, can you provide just a brief overview first of what you folks do at New Yorker? I know it's a lot, but just a brief overview, and then we'll get into a little bit about your background. We make sure that products are paid. We essentially follow the money. So whether it's in the U.S. or globally, it's important to understand the food chain, the dollars. So any technology at various points may have barriers or opportunities to payment. So we look at what those are based on the stakeholder, the physician, the hospitals, the payers, and those are the primary markets. So we look at all of those stakeholders and where they see value and essentially who gets paid what along that continuum.

So that requires a whole set of skills, especially in the U.S., given the complexity of our health care system, that you often find the monetary incentives are different depending upon, you know, the physician payment or the hospital payment, or whether or not there's value to the overall payer, which would be, you know, Medicare or the commercial payers in the U.S. So there's many nuances associated with all of that, and so I need to have a, a group of technical experts that know all of those various stakeholder payment systems in order to provide the right information to the technology. Sure.

Okay. I like your 10-second little elevator pitch at the very beginning when you said, we help med tech or medical device companies get paid. Yeah. And obviously it entails a lot more than that, but that's a great little intro, because that's the truth. that's really the truth so uh... yeah will often find that we i get somebody there

i love that i love medical technology uh... in inventors and they often will come to me with great ideas great technology and i can almost do like five second dating and say well that's a wonderful product but you're never going to get paid for it and uh... so that's the kind of advice that we give early on uh... as well as to investors as to what we think the payment systems will support or not for any of these

technologies, looking at it in a global fashion as well, recognizing that there are so many barriers and hurdles now in the U.S. that many of the technologies are starting in Europe, but we still take that into account and look at what it might mean to them when they try to market in the U.S. ultimately. Okay, okay. And that's interesting because I think from my standpoint and maybe from the standpoint of most of my audience, they think, okay, I've got this new device. Either it's not currently being offered in the space today or the other providers are not adequate enough. So, hey, this makes sense. But what you're saying is even though it may make sense or it may seem obvious, you know, what's the bigger question is, how are you going to get paid for that? you know, how are you going to get reimbursed through that? So that's, that's a kind of a paradigm shift, I guess, for, probably for me as well as most of my audience. So that's great. So let, I think that gives me a little bit better understanding of what New York, Neocure group is. But can you provide, provide us a little bit of a background to how you came up through the ranks and now, you know, as now the founder and president of Neocure?

Right. Well, originally I was a nurse, so I have the background of knowing how technology works on patients. So that gives me a unique perspective. So I did that for many years and then went on to the pharmaceutical industry where I was very interested in terms of patient outcomes with drugs and essentially worked with a variety of different pharmaceutical companies, worked overseas, worked in Europe, on showing how drugs were cost-effective or important to governments. You know, in the beginning, I actually worked with the authors of NICE and looked at what comparative effectiveness meant or cost-effectiveness meant to the UK in developing those guidelines that, you know, are now referenced all the time for technology and drugs.

So I did that for several years, but got very bored with just studying asthma or just studying, you know, one particular disease area, and found out about Boston Scientific in 1997, which I thought was fantastic in terms of understanding the impact of new technologies quickly and how it was replacing standard therapy, and it was very exciting as a researcher to be able to look at those opportunities and advantages of, of impact on value and payment. So it was a great experience at BSC because they had so many novel products that were really changing care. And so within that role, I built a infrastructure in the company on a global basis that really thought about what the outcomes were on patients. So we built the data capabilities, the health economic care.

capabilities, the reimbursement and payment capabilities as well as the government advocacy group that all are necessary for achieving a success in payment for a technology. So we built that internally and we're essentially an internal consulting firm to the company. At the end of 2006, I decided to go off. on my own and have almost replicated that with neocure where we have a group of people that I trust and appreciate because most of them have backgrounds in companies and understand how important it is to develop a strategy that's based on a return on investment to the company so we understand that we know all of the components

of getting that done and it's it not one person has the expertise to be able to shepherd something through. You need to have a whole range of skill sets, data analytics and health economics, and the key area that's critical, though, is understanding the payment systems and what that means for achieving a success for your product. Make sure it's got the right payment attributes that will get it to, get it to, through the system so that you can sell to the hospital or that so the physician gets paid sufficiently for doing the procedure or that the payer recognizes that if they adopt something

that might be more expensive that it pays off in the long run because of the impact it has on patient adverse events or in improvement in health. Okay. So with that in mind, our neocures, you know, includes experts in all of those different areas. Okay. And you mentioned that some of your team, or maybe most of your team, has experience kind of in the corporate world. So how big of a difference does that make when you're consulting and you're working with your clients now? Well, I find that if you look over the reimbursement firms that have, this is the reimbursement.

firms across the u s i mean they generally uh... have a they're usually brought up as consultants and they understand certain aspects of of what it means to develop a product from birth to to commercialization sure and uh... they they don't understand you know that whole continuum all the issues that you have with r and d the interplay between fda and your regulatory strategy and how that's so intimately linked to premium payment.

And so having the corporate experience, I know what it takes to do all of that and how important it is to have that group of perspectives from clinical, regulatory, and marketing and reimbursement to have all of that together is critical for the success. So I often find consulting firms that specialize in reimbursement really don't understand all of those intricacies and interplay between those specialties and specialties and how it needs to be orchestrated. So I often give the example that with Neocure, what we have is we build essentially an orchestra

score and we know that we have to bring in the percussion at certain times or the strings that we know that we have to bring in, you know, that it's important at the early stages to be very, to have a full understanding of the research and development of the product and what kinds and where it's, you know, how it's going to be used in the body and where and how that's so important because ultimately how you get paid matters about how it's actually introduced into the body and how it may or may not be used in the body. And so all of that matters, again, in terms of your regulatory strategy, too, whether or not you have the right predicate device, because often the predicate device is referenced in terms of

payment. So there's a real disconnect between what I see in terms of the reimbursement firms that give advice that don't understand that relationship as well as my team does. Okay. And so you call that the orchestra score? Yes, it's an orchestra score. And just jotting down some notes. That's unique. I wanted to make sure I had that correctly. Right. And, you know, and again, our reimbursement strategy, quote unquote, reimbursement strategy includes a combination of building evidence, meaning working with the clinical group to establish what kind of outcomes are necessary to collect within the trials, to

looking at how, again, the physician gets paid, which means that you have to have what's called the CPT strategy. and that has to be started early, early on before commercialization. And some of the elements that are necessary for getting the physician paid and getting the CPT code also include gathering evidence. So that also has to happen early on. But then we also have the issue of the hospitals, and they have a very unique understanding of payment

and whether it's delivered or the procedure is done in the inpatient versus the outpatient versus the ambulatory care setting versus the physicians off. Any of those sites of service all have different payment incentives, and the hospital could lose money on the technology where the physician might make money, and so you have to understand that early on as well. So we, and then the, the physician, final thing that's very critical is whether they're going to be primarily Medicare patients versus commercial page.

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