This chapter reviews the potential use of cost-effectiveness (CE) analysis in health and health insurance management. The goal is to assure the supply of all medical services with positive benefits greater than cost and none with benefits less than cost. This method is sometimes unpopular in the US because it limits use of care with positive benefits but very high costs; however, the great majority of treatments studied are cost-effective by the usual standards for the dollar value of health improvements. It is shown than cost-sharing can make a service cost-effective. The relevance of the incremental cost-effectiveness ratio (ICER) model for the use of CE analysis by insurers is questioned.

This chapter simplifies the complex multi-payer healthcare reimbursement market and explains how to position your product for successful reimbursement. The best time to bring reimbursement planning into the product development process is discussed here. The U.S. healthcare system is used as a baseline and the healthcare systems of other countries are reviewed briefly. Reimbursement for devices and administered drugs is based on many factors, and this chapter shows the steps a biomedical product company can take to maximize revenues in the US Healthcare system. The basics of reimbursement – coverage, coding, and payment – are explained in simple terms with diagrams. Case studies help show how individual companies have addressed the reimbursement process for novel breakthrough technologies.