Commercial Health Insurance Ventures into Medical Devices: Challenges and Future Trends

NBD Reporter: Tu Yinghao NBD Editor: Liao Dan

On July 28, by MediTrust Health, China ReinsuranceLife Insurance, the tripartite commercial health insurance cooperation project for the "fully implantable analgesic pump" involving Medtronic officially launched, "National Business Daily" (Blog,Weibo)》Reporters learned that this isInsuranceIndustry Tests the Waters in Commercial SectorHealth InsuranceAnother attempt to link medical device payment, this innovativeInsurance ProductThe coverage is included in the upgraded benefits of ZhongAn Insurance's flagship product, thereby making it the industry's first commercial insurance policy for medical devices.

“Compared with pharmaceutical coverage, the medical device supply chain is considerably complex, and there are practical operational challenges in implementing related payment mechanisms and establishing connections with medical institutions,” Yang Su, General Manager of the Health Insurance Business Division at MediTrust Health, told reporters from 《National Business Daily》 in an interview. He noted that, moreover, compared with drugs, the market faces greater difficulties in understanding medical devices. In terms of the linkage between insurance and medical devices,Insurance ClausesThe design, along with related calculations and data accumulation, are all significant challenges.

In rigidRequirementsGiven this context, will medical devices become a major new trend in the upgrading of health insurance products in the future? Yang Su noted that, starting with commercial health insurance, it is anticipated that after a period of market validation, the relevant coverage benefits will soon be incorporated into inclusive insurance and urban health insurance plans.

Insurance Enables Advanced Medical Devices to Benefit More Patients

Chinese clinical oncology data indicate that in 2017, over 10 million people globally were diagnosed with annually,# Cancer, In 2020, this figure increased to 15 million, with 70%–80% of patients with advanced-stage cancer suffering from moderate to severe pain. In China, in 2020, the number of new malignant tumor cases exceeded 4.57 million, among which the incidence of pain in newly diagnosed cancer patients was approximately 25%, while in patients with late-stage disease it reached 60%–80% (indicating that over 2.7 million late-stage cancer patients in China suffer from pain annually). Furthermore, the exacerbation of pain severely compromises patients' quality of life, causing significant inconvenience and imposing a substantial burden on both patients and their families.

Some literature reports indicate that effective pain relief can help patients better combat cancer and may potentially extend survival. According to the introduction, Intrathecal Drug Delivery (TDD) therapy, commonly known as a "fully implantable analgesic pump," utilizes an implanted drug infusion pump to precisely deliver medication to the target site to achieve analgesia. Following pump implantation, only 1/300 of the oral dosage is required to achieve superior analgesic efficacy, thereby minimizing drug-related side effects to the greatest extent possible.

“This innovative commercial health insurance product has achieved a breakthrough in the field of pain management services.”China LifeHu Xiao, Deputy General Manager of a reinsurance company, cited an example: "If childbirth pain is rated at level 8, cancer pain reaches level 10, with most advanced cancer patients enduring suffering that is unbearable for the average person. 'The analgesic pump developed through this collaboration, via intrathecal administration, can reduce patients' pain perception by 50% to 70%.' In his view, incorporating the analgesic pump into commercial insurance coverage fills the gap in health insurance regarding pain management, truly addresses patients' unmet needs, and enhances their quality of life. While driving innovation, it also imbues commercial insurance with the warmth of humanistic care."

A diversified payment system will undoubtedly alleviate the financial burden on patients. Director, Neuromodulation Business, Greater China, Medtronic`Chen Jian`Rong stated: “Through the tireless efforts of all parties, we are delighted to witness the launch of China’s first insurance product for fully implantable analgesic pumps. This marks the initial establishment of a diversified payment system, enabling patients to access cutting-edge pain management therapies and medical services more conveniently, and contributing to the Healthy China initiative and the accessibility of high-quality medical resources. We hope this innovative insurance product will bring warmth to those in need, helping every patient alleviate pain, restore health, and prolong life.”

Compared to pharmaceuticals, medical devices present greater operational challenges.

“The rapid development of the health insurance market is fundamentally driven by the robust demand from the general public for innovation in insurance products.” In Hu Xiao’s view, as consumers’ awareness of coverage and the industry’s service capabilities continue to strengthen, the consumer base for health insurance is steadily expanding. Product preferences are evolving toward long-term, protection-oriented, and comprehensive offerings. This sustained consumer demand continuously drives the insurance sector and insurers to implement supply-side reforms, while also raising increasingly diverse requirements regarding coverage benefits, service scopes, and other aspects of insurance products.

In recent years, against the backdrop of the entire insurance industry advocating that "insurance should focus on protection" and "return to its core function of providing coverage," protection-oriented products, represented by health insurance, have developed rapidly. Since 2018, when the National Healthcare Security Administration (NHSA) included 17 anti-cancer drugs in the national medical insurance catalogue, specialty drug insurance has emerged as a phenomenal health insurance product, sweeping across the market. Unlike traditional insurance products that directly provide expense reimbursement,Medical Insurance， specialty drug insurance transforms it into pharmaceutical services provided to customers. Within these services, on one hand, it refers to providing the drugs themselves, and on the other hand, it also encompasses medication guidance, medication monitoring, drug delivery, and so forth.

*National Business Daily* reporters noted that, initially, specialty drug insurance typically served asCritical Illness# Insurance and MillionMedical InsuranceAs a supplementary upgrade, independently marketed products are also available in the market. Following the rapid rollout of the “Hui Min Bao” project across China in 2020, the innovative model of “specialty drug insurance + city-specific customization” has been implemented in multiple cities, enhancing local residents’ access to medications, alleviating the financial burden of medical expenses, and contributing to the improvement of the local multi-tiered medical security system.

According to Yang Su's prediction, starting with commercial health insurance and following a period of market validation, the relevant coverage benefits will soon be incorporated into inclusive insurance and urban health insurance. He also pointed out that medical device-related products encompass medical devices, pharmaceutical service platforms, and pharmaceutical.InternetA product of multi-party collaboration between the company and reinsurance companies, it represents another endeavor in industrial integration and innovation following the specialty drug insurance.

“Currently, commercial insurance pays relatively little attention to the medical device sector, and we hope it will play a greater role in the future,” Yang Su stated. Taking proton and heavy ion therapy as an example, while it remains a relatively niche treatment modality in oncology, it has already become a standard coverage component in million-yuan medical insurance policies. He also pointed out that although million-yuan medical insurance offers relatively comprehensive coverage, its post-treatment reimbursement model provides limited guidance or regulation for patient behavior. Through the launch of medical device products, related services can be gradually made more explicit and standardized in the future.

Cover image source: 699pic