Drive, Disruption and Delivery: Strategic Perspectives from a Non-Linear Mind
From Reimbursement to Resource Allocation: How the Rules for Med Tech Adoption are Being Rewritten
For years, the medical technology playbook looked deceptively linear: generate evidence, secure coverage, obtain coding, establish payment, and adoption would follow. These elements still matter. But the sequence no longer explains what healthcare items and services get used, where, by whom, and at what speed. Today, the system is doing something more consequential than reimbursing care. It is allocating scarce resources: evidentiary flexibility, provider attention, administrative ease, site-of-service access and economic tolerance.
That shift is easiest to see within the prior authorization process. Utilization management used to be framed as an irritant of managed care, largely associated with commercial and Medicare Advantage plans. It is now better understood as infrastructure. In 2024, Medicare Advantage insurers made 52.8 million prior authorization determinations. The Centers for Medicare and Medicaid Services (CMS) WISeR model is testing technology-enhanced prior authorization and pre-payment review for select services in the Medicare Fee-for-Service program in certain geographic regions. In other words, access is increasingly governed not just by policy language, but by real-time adjudication.
This is why coding can no longer be treated as a technical afterthought. In the type of constrained system we are facing today, coding is part of how innovation becomes legible. It determines how a technology is described, where it fits, what it is compared against, and whether its value is visible or obscured. A poor code pathway can package away value, misstate resource use, or force a novel technology into an old economic logic. That problem is especially acute in software-enabled and AI-driven med tech, where regulatory identity is maturing faster than reimbursement identity. When the coding blueprint is weak or ill-fitting, reimbursement may still exist on paper, but the technology often remains economically blurry. And in a constrained system, blurry tends to be expensive, and expensive tends to be unwelcome.
Payment is changing as well, but many companies are making an incorrect assumption about where it is headed. Rate sufficiency still matters. Yet payment policy increasingly functions as a signal of what the system is prepared to absorb. For example, CMS finalized new hospital price transparency requirements in the 2026 hospital outpatient rules, and the Agency is collecting Medicare Advantage negotiated charge data that may help inform Medicare facility payment rates. Transparency matters when it assists people in understanding what is changing, why it is important, and how to respond. In this case, transparency reflects a broader move toward using market data, utilization data, and operational data to shape future payment logic.
The provider side of the market is reinforcing the same trend. In 2025, hospital workforce costs rose 5.6%, total hospital expenses grew 7.5%, supply expenses increased 9.9%, and drug expenses increased 13.6%, according to the American Hospital Association. At the same time, the Kaiser Family Foundation found that one or two health systems controlled the inpatient market in 47% of metropolitan areas (2024). In this environment, adoption decisions are less often made by clinical champions or reimbursement teams. They are shaped by health systems under cost pressure, operating in concentrated markets, deciding where to spend labor, capital, committee time, and workflow attention.
This gets to the deeper meaning we find in this moment. The U.S. healthcare system is getting tougher on innovation. Additionally, it is becoming more explicit about uncertainty, more digital in how it governs access, more selective about where care is delivered, and more disciplined about which technologies merit economic accommodation. Temporary pathways, conditional coverage, prior authorization application programming interfaces (APIs), transparency datasets, and increasingly concentrated provider markets are all manifestations of the same instinct: not to reject innovation outright, but to ration the conditions under which innovation is allowed to scale.
For medtech companies, investors and strategics, the conclusion is clear. Prevailing in this market requires more than clinical validity and regulatory success. It requires designing technologies and launch strategies that the healthcare system can classify, justify, operationalize, and economically tolerate. In that sense, reimbursement is no longer the endgame. It is one visible output of a much larger allocation decision. Companies that recognize this shift early will be better prepared to secure reimbursement, earn trust, and fit within the rules the system is already building around access.
Jessica Holmes, MJ
Head of Market Access
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