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VOLUME 4, ISSUE 2  
 2021 

 

STAKEHOLDER  PERSPECTIVES 

Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 

Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

This article has been invited and reviewed by Co-Editor-In-Chief, Dr. Silvia Ursula Raschke. 
English proofread by: Karin Ryan, M.A., B.Sc., P.T. 
Managing Editor: Dr. Hossein Gholizadeh 
 

SPECIAL ISSUE 

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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

 

 

 
STAKEHOLDER  PERSPECTIVES 

 

HEALTH ECONOMICS IN THE FIELD OF PROSTHETICS AND ORTHOTICS: A GLOBAL 

PERSPECTIVE 

Kannenberg A1,*, Seidinger S 2
 

 

1 Otto Bock Healthcare LP, Austin, Texas, USA. 

2 Otto Bock Healthcare GmbH, Vienna, Austria. 

 
 
 

 

 

 

  

 

 

 

 

 

 

 

INTRODUCTION 

With populations aging and medical progress accelerating, 

the financial pressure on health care systems around the 

world is constantly increasing. As the resources that can be 

spent on health care are limited, policymakers have the 

challenge to balance spending and health outcomes while 

preventing possible inequalities in beneficiary access, such 

as age discrimination of the elderly.   

Health technology assessments (HTAs) are performed by 

synthesizing information and evidence on the clinical, 

economic, social, and ethical value of health technologies 

with the objective to inform safe and effective health 

policies, especially  with  respect  to  appropriate  coverage  

 

 

 

 

and reasonable reimbursement. Health-economic and 

budget-impact analyses originally started in the early 1990s 

and have developed into a standard tool to inform decision-

making for pharmaceuticals. Analyses have meanwhile 

expanded to medical devices and clinical procedures using 

modified methodology that better reflects their specific 

needs. As medical devices differ considerably from 

pharmaceuticals, there is still a need to refine the HTA 

approach to these technologies.1,2 While common for 

medical devices used in hospitals or by physicians, health 

economics is still in its infancy in the field of prosthetics and 

orthotics (P&O). Even worse, most P&O products, with 

notable exceptions, such as microprocessor knees, still lack 

a solid body of evidence for meaningful clinical benefits that 

would be required to determine the effectiveness side of a 

cost-effectiveness equation. There is a considerable 

amount of biomechanical research that may have even 

shown promising findings in the gait lab. However, many 

manufacturers still fall short in conducting meaningful 

clinical research. For example, while increased toe 

 
OPEN  ACCESS Volume 4, Issue 2, Article No.6. 2021 

 

 

Journal Homepage: https://jps.library.utoronto.ca/index.php/cpoj/index 

 

ABSTRACT 

The rapid advancement of prosthetic and orthotic (P&O) technology raises the question how the 

industry can ensure that patients have access to the benefits and providers get paid properly and 

fairly by healthcare payers. This is a challenge that not only P&O but all areas of health 

technology face. In many areas of medicine and health products, such as drugs and medical 

devices, health-technology assessments (HTA) have become a standard procedure in the 

coverage and reimbursement process. In most countries, P&O is lagging behind that 

development, although some countries have already formalized HTA for prosthetic and orthotic 

products and may even use cost-effectiveness analyses to determine pricing and payment 

amounts. This article gives an overview on the coverage and reimbursement processes in the 

United States, Canada, Germany, France, Sweden, the United Kingdom, Poland, Japan, and 

China. This selection reflects the variety and diversity of coverage and reimbursement processes 

that the P&O industry faces globally. The paper continues with an overview on the necessary 

research and investment efforts that manufacturers will have to make in the future, and 

contemplates the likely consequences for the manufacturer community in the market place. 

Health economics may help support the transition from price-based to value-based coverage and 

reimbursement but will come at considerable costs to the industry.    

CITATION 

Kannenberg A, Seidinger S. Health 

economics in the field of prosthetics and 

orthotics: A global perspective. Canadian 

Prosthetics & Orthotics Journal. 2021; 

Volume 4, Issue 2, No.6. 

https://doi.org/10.33137/cpoj.v4i2.35298 

KEYWORDS 

Disability, Health Economics, Prosthetics, 

Orthotics, Health Technology 

Assessment, Manufacturer, 

Reimbursement, Research and 

Development, Willingness to Pay 

 

 

* CORRESPONDING AUTHOR 

Andreas Kannenberg, MD (GER), PhD 

Executive Medical Director North America,   

Otto Bock Healthcare LP, 11501 Alterra Parkway, Suite 600, Austin, Texas, USA.  

E-mail: andreas.kannenberg@ottobock.com 

ORCID ID: https://orcid.org/0000-0001-7983-1744 

Special Issue: Health Economics in Prosthetics & Orthotics 

https://doi.org/10.33137/cpoj.v4i2.35298
https://jps.library.utoronto.ca/index.php/cpoj/index
https://doi.org/10.33137/cpoj.v4i2.35298
mailto:andreas.kannenberg@ottobock.com
https://orcid.org/0000-0001-7983-1744


 

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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

ISSN: 2561-987X 
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clearance in the gait lab was shown for prosthetic feet with 

hydraulic and microprocessor-controlled ankles years 

ago3,4 no study has been published yet to show that these 

feet reduce falls in the free-living environment. Having come 

to the conclusion that most manufacturers do not conduct 

robust and meaningful clinical research,5-8 let alone cost-

effectiveness studies, health-technology assessment 

bodies that have reviewed the evidence for some P&O 

products usually list the deficiencies in the evidence and, 

therefore, often abstain from compelling coverage 

recommendations.  

Though there are some basic methodologic commonalities 

of health-economic analyses for all health technologies, a 

specific challenge in P&O is the relative lack of expertise in 

the field of disability that would be necessary to develop 

health-economic models that appropriately represent and 

reflect the specific needs and outcomes of patients. 

According to a recent survey, over 80% of health-economic 

experts said they knew far too little about this area.9 So, it is 

not surprising that currently no specific health-economic 

model exists that appropriately reflects the conditions and 

needs of patients with disabilities treated in P&O. That also 

means that manufacturers have no reliable guidance to 

satisfy the expectations of HTA bodies. Nevertheless, 

health-economic evaluations will very likely become an 

important aspect of future coverage and reimbursement 

decisions. Therefore, the P&O industry would be well-

advised to proactively approach health economics soon to 

be able to shape its framework rather than to wait for 

inadequate models to be imposed from the outside.  

This paper aims at giving an overview on health-economic 

requirements for coverage and reimbursement policies in 

important health care systems around the world. However, 

regardless of a requirement, cost-effectiveness analyses 

would also bring the industry in a position to argue for the 

value of its services and products by putting it in perspective 

to that of other medical services and products. For example, 

a health-economic study in the United States found that the 

incremental cost-effectiveness ratio (ICER) of 

microprocessor-controlled prosthetic knees was 

comparable to that of total knee replacements but much 

better than that of prophylactic cardioverter defibrillator 

implantations.10 Such findings might help influence policies 

even without a formal requirement for health-economic 

evaluations.   

CURRENT REIMBURSEMENT SYSTEM 

CHALLENGES FOR PROSTHETICS AND 

ORTHOTICS 

Decision-making process for coverage 

Currently, in the majority of health care systems worldwide, 

health-economic studies are not a standardized part of the 

decision-making process for P&O coverage, issuance of a 

new billing code, if applicable, or patients’ access to 

treatment.  

While public insurance infrastructure and appraisal 

procedures for pharmaceuticals are generally clearly 

regulated and medical devices are increasingly 

approaching these standards, coverage appraisal systems 

for P&O usually lag way behind and still focus primarily on 

clinical evidence, if any. One of the reasons is that P&O is 

only a tiny field in healthcare, making up less than 0.3% of 

the 2018 overall Medicare budget in the U.S.11,12 However, 

the fact that individual prostheses may cost tens of 

thousands of dollars creates a psychological barrier with 

claim reviewers on the insurance side, sparking their wish 

to see good justification for such a big expenses. Therefore, 

health-economic analyses may help put the cost and 

benefits of an advanced prosthesis or orthosis in 

perspective to those of other medical interventions that are 

considered standard of care.  

OVERVIEW ON THE ADOPTION OF HEALTH 

ECONOMIC EVALUATIONS IN THE FIELD OF 

PROSTHETICS AND ORTHOTICS IN 

DIFFERENT COUNTRIES 

For this paper, countries were selected that have a formal 

process to enable manufacturers to provide scientific 

evidence for the assessment of their products and that 

publish appraisal results. 

NORTH AMERICA 

UNITED STATES  

In 2018, U.S. health care spending totaled $3.6 trillion, 

amounting to 17.7% of the gross domestic product (GDP) 

or US$11,200 per capita — almost twice as much as many 

other high-income countries.13 The biggest expenditure 

categories are hospitals and physicians. Though the 

amount spent on prescription drugs is growing, the 

proportion of health care spending for drugs is fairly 

stable.14 Interestingly, public health care expenditures as a 

share of the GDP (8.3%) are comparable to other large 

economies. However, public health insurance in the United 

States (Medicare, Medicaid, Children’s Health Insurance 

Program [CHIP], Veterans Administration [VA]) covers only 

34 percent of the population, much less than in countries 

with universal coverage like Canada and the United 

Kingdom.15,16 That indicates that it costs far more to provide 

health care coverage in the U.S. system than anywhere else 

in world. Despite leading the world in costs, however, the 

United States ranks only twenty-sixth in the world for life 

expectancy17 and also ranks poorly on other indicators of 

quality.18 Thus, there would be good reason to employ 

health-economic evaluations to improve outcomes and 

manage health care costs. However, the information on the 

impact of health-economic analyses on the U.S. health care 

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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
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system is conflicting. On one hand, the Department of 

Health and Human Services (HHS) in 2016 issued 

Guidelines for Regulatory Impact Analysis that apply to any 

regulatory actions that have an annual effect on the 

economy of  US$100 million or more.19 On the other hand, 

Medicare is prohibited by law from using cost-effectiveness 

in coverage determinations.20 That is reflected by the fact 

that the process for the development and revision of Local 

Coverage Determinations (LCD) that also applies to 

prosthetics and orthotics does require the submission of 

clinical evidence on new products published in peer-

reviewed medical journals, but not the submission of any 

health-economic evaluations of the new technology.21  

Commercial health care insurances have more discretion 

with regards to health economics. However, the Affordable 

Care Act, though encouraging cost-effectiveness and 

comparative clinical research, also restricts the use of that 

evidence for determining coverage and reimbursement.22 

Nevertheless, health-economic analyses of new 

interventions, drugs and medical devices are quite common 

in the U.S. However, Medicare and commercial insurances 

have separate departments and processes to determine 

coverage and payment amounts.  

For coverage, they usually focus on published clinical 

evidence and the methodological quality of the research 

conducted, regardless of the price or reimbursement 

requested. Health-economic analyses are usually not 

considered for coverage decisions. Only after a new 

intervention has been found to be effective and worth 

covering, health-economic analyses may be used to help 

determine an adequate payment amount by providing the 

cost-effectiveness perspective that may be compared to 

that of other interventions already covered. Due to the 

known challenges to meet the formal criteria of high-quality 

clinical research in prosthetics and orthotics, such as 

blinding and randomized parallel groups, manufacturers 

often fail to even pass the first gate of evaluation of the 

evidence for clinical benefits and effectiveness. However, if 

payers even dispute the clinical effectiveness of prosthetic 

and orthotic devices and deny coverage for lack of evidence 

thereof, there is no need to analyze cost-effectiveness to 

guide determination of pricing and reimbursement. That 

was basically confirmed by the experience that a health-

economic evaluation of microprocessor controlled 

prosthetic knees (MPK) commissioned by the American 

Orthotic and Prosthetic Association (AOPA) and conducted 

by the RAND Corporation10 was widely ignored by 

healthcare payers and lawmakers. For community 

ambulators (K3), the study confirmed that the previous 

decision to cover MPK was cost-effective, whereas for 

limited community ambulators (K2), the results were 

rejected for insufficient clinical evidence as a solid basis for 

a cost-effectiveness analysis. Given the dire evidence 

situation for many P&O products, “health economy” is 

mostly interpreted as cost containment and payment 

reduction by payers, be it through “least costly alternative” 

provisions, wide and more inclusive interpretation of billing 

codes (exclusion of “unbundling” of features and functions), 

and contracts with ever-dwindling payment rates. These 

challenges are a clear indication that U.S. healthcare 

payers have not yet understood the value of P&O care. 

Another issue, especially for innovative manufacturers, is 

that payers clear coverage for billing codes rather than 

specific products. In most cases, coverage of a billing code 

is approved based on the evidence for one specific product 

that is usually the predicate device for that code. However, 

once coverage of that code is approved, followers can take 

advantage of it with me-too products that do not need 

evidence for their clinical effectiveness anymore and can, 

thus, be offered at a lower price.     

CANADA  

Canada spends about 11.1% of its GDP on healthcare, 

comparable to the level of other high-income countries.23 

The Canadian healthcare system is predominantly funded 

publicly with only 30% of funding coming from the private 

sector. The federal government provides health care 

funding to the 13 provinces and territories through the 

Canada Health Transfer and other fiscal transfers.24 

Provincial and territorial health authorities have the 

responsibility to meet the basic health service requirements 

of the Canada Health Act (CHA) that requires coverage of 

hospital services, physician services, surgical-dental 

services provided by hospitals, medical practitioners or 

dentists.25  

Outside the basic health services mandated by the CHA, 

provinces and territories have the power to decide what 

packages of services they will provide. This provincial 

independence has resulted in a large variation of coverage 

between provinces.26-28 Per capita spending in 2016 for all 

of Canada was projected to be CAN$6,299, but spending 

by province ranged from CAN$5,822 in Québec to a high of 

CAN$7,256 in Newfoundland and Labrador.23 These 

variations in coverage do also and specifically apply to 

prosthetics, ranging from no formal coverage policies and 

prosthetic coverage in Newfoundland & Labrador and 

Prince Edward Island to coverage of up to CAN$17,690 

towards select advanced components in Ontario.28  

Health Technology Assessments (HTA) started in Canada 

about 25 years ago with the establishment of the Conseil 

D´Evaluation des Technologies de la Santé (today: Agence 

des Technologies et des Modes Intervention en Santé 

[AETMIS]) in Quebec, soon followed by the Canadian 

Coordinating Office of Health Technology Assessment 

(today: Canadian Agency for Drugs and Technologies in 

Health [CADTH]) at the federal level. In addition, many of 

the larger provinces have their own independent bodies, 

such as the Ontario Health Technology Advisory committee 

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ISSN: 2561-987X 
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(OHTAC). However, in the past, economic factors were not 

nearly as predictive of recommendations by the HTA 

agencies as clinical reasons and clinical certainty of effect. 

Also, the health-economic approach has usually been more 

simplistic, focusing on unit cost comparisons rather than 

true cost-effectiveness. For example, the odds of a drug 

being recommended were nine times higher if that drug was 

cheaper than a comparator drug, regardless of absolute 

cost-effectiveness.28 That may change with increasing 

financial pressure on the healthcare system in the future. 

However, a recent study even suggested using different 

thresholds for cost-effectiveness analyses for each of the 13 

provinces and territories based on disability-adjusted life 

years (DALY) averted and the actual level of health care 

expenditures in the respective province rather than one 

national threshold for Canada.29 While such an approach 

might be considered appropriate from the perspective of 

provincial health authorities, it would make it much more 

difficult for providers and manufacturers to navigate the 

Canadian healthcare system.  

To our knowledge, only the C-Leg has been subjected to 

formal reviews of clinical evidence and cost-effectiveness 

by both the Evidence Based Practice Group of WorkSafe 

BC in 2003, updated in 2009,6 and CADTH in 2009,7 both 

with favorable recommendations. However, not all 

provinces and territories have adopted them. Similar as the 

situation in the United States, the most likely reason is the 

limited methodological quality of most of the prosthetic 

research that does not provide a solid basis for cost-

effectiveness analyses. Thus, the quality of clinical research 

in prosthetics needs to be improved first.      

EUROPE 

The European Network for HTA (EUnetHTA) enables the 

European Union to perform one HTA for several or all 

European countries to reduce research efforts. Both 

national agencies and manufacturers can initiate an 

evaluation. The focus of EUnetHTA is on medical devices 

of classes III and II. However, other technologies might 

open the door for class I.30 The Austrian HTA agency has 

been chosen by EUnetHTA to prioritize projects for other 

technologies and has already started a national assessment 

of exoskeletons and functional electrical stimulation in 

stroke rehabilitation units in Austria. In general, health 

economic studies are only considered if published in a peer-

reviewed journal. The interaction between HTA bodies and 

manufacturers is refined by the obligation of the latter to 

continuously document the medical benefits and safety of 

their medical products along their life cycle.31 

However, it must be considered that EUnetHTA’s 

recommendations are not legally binding for EU countries 

and that the implementation of this network is far from being 

completed. Therefore, in the next section we present the 

diversity of the evaluation of health-economic evidence 

across select European countries. 

GERMANY 

In 2018, Germany spent €390.6 billion (US$460.9 billion) or 

€4,712 (US$5,560) per capita on health care, equaling 

11.7% of the GDP.32 The statutory health insurance 

provides comprehensive medical coverage to 90% of the 

population, with premiums depending on income.33 In 

principle, people with disabilities are entitled to coverage of 

state-of-the-art prosthetic and orthotic devices in 

accordance with the statutory provisions of the Social Code 

(Sozialgesetzbuch [SGB]; §4 and §47 SGB IX;34 §33 and 

§27 SGB V)35,36 as soon as the CE mark is approved in 

Europe. In addition, the Federal Social Court adjudicated for 

MPKs that patients are entitled “to receive aids that 

compensate the disability and enable equal function for 

activities of daily living as an able-bodied person”.37 

To be listed in the Directory of Medical Aids (“GKV 

Hilfsmittelverzeichnis”), the clinical benefit of a medical 

device must be demonstrated. Under certain 

circumstances, research questions for the listing of new 

device categories may be negotiated. Usually, the 

insurances negotiate contracts and reimbursement 

amounts with the Federal Guild of Prosthetists and 

Orthotists based on the directory. In principle, the Federal 

Joint Committee (G-BA) of Physicians and Health 

Insurances, the highest decision-making body for coverage 

in the German healthcare system, would have the authority 

to commission a health-economic evaluation by the HTA 

body IQWiG (Institute for Quality and Efficiency in Health 

Care). This has been never done for prosthetics or orthotics 

thus far.38 If a manufacturer conducts a health-economic 

study in a German context, the IQWiG methodology is to be 

followed and modeled on a German cohort.39 An example 

is the cost-effectiveness study and budget impact analysis 

for C-Leg in a German context.40 The value of a health-

economic evaluation may inform statutory health 

insurances and help grant extended access for sub-groups 

of patients which are likely perceived as cost-intensive. 

FRANCE  

The Haute Authorité de Santé (HAS)41 has a published, 

clearly defined appraisal process including instructions for 

the interaction with manufacturers that is to be followed for 

drugs, medical devices and P&O equally. This is also 

noticeable in the assessment expertise of the Commission 

nationale d`évaluation des dispositifs médicaux et des 

technologies de santé for prostheses and orthoses.42 In this 

concept, the level of evidence and clinical meaningfulness 

of benefits provided for a medical device by a manufacturer 

is systematically tied to the level of possible coverage 

(maximum number of patients fitted per year) and 

reimbursement (payment amount). An additional 

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requirement is that, whenever possible, French research 

sites should participate in a study, or the setting of a study 

should be transferable to the research and/or care setting in 

France. The benefit of the French model is that there is a 

cooperation between the HAS, clinical experts and the 

manufacturer in developing research projects and defining 

the relevant outcomes. If the study was conducted as 

agreed upon with the HAS, coverage is granted for a period 

of 5 years, after which it has to be renewed for another 5 

years with another study that demonstrates that patients 

use the device in their daily lives. However, this coverage 

does not mean that the payment amount is fixed and 

secured, as discount negotiations may be initiated by the 

HAS on a yearly basis. Health-economic studies can 

support both the initial application and reimbursement 

negotiation and the 5-yearly renewals. Despite the benefits 

of being able to negotiate the study details with the HAS, 

the process is usually time-consuming and results in 

considerable delays in coverage compared to other 

European countries. In addition, the expectations of the 

HAS towards study design and outcomes are often so 

unique that manufacturers have to conduct specific studies 

that are of limited or even no value for coverage 

negotiations in other countries.     

NORDIC COUNTRIES / SWEDEN 

Sweden has a long tradition of a consensus-oriented culture 

that also applies to the healthcare system. As soon as a 

P&O product is available on the market, individual patient 

coverage may be claimed on a case-by-case basis. 

However, if general public coverage is pursued, especially 

for high-priced innovative products, a health-technology 

assessment is to be initiated by a health care professional 

(HCP).43-45 Manufacturers are not intended to do this as a 

clear need for the new treatment option must be requested 

by a HCP. This is the common approach to appraisals in 21 

counties, with an evidence review being at the core of the 

assessment procedure. The diversity in additional 

assessment tools ranges from mini-HTAs to coverage with 

evidence development. The methodology required is the 

same for drugs, medical devices and P&O. It is 

comprehensible and achievable:46  

• National health databases and registries47,48 must  

be used. 

• Clinical Experts should be consulted for modeling. 

• Health-economic studies required in cohorts < 65 

years of age from a payer´s and a social perspective. 

One example for this is a cost-effectiveness study for 

Kenevo, an MPK for limited community ambulators, 

performed by Kuhlmann et al. It found ICERs of SEK 

138,003 (€11,138 / US$13,143) per quality-adjusted life 

year (QALY) gained for prosthesis users 65+ years with 

diabetes/vascular disease and SEK 114,772 (€9,263 / 

US$10,930) per QALY gained for those with other 

etiologies.49  

According to the published methodology,46 3 levels of 

thresholds are used for appraisal: “low cost” with <SEK 

100,000 (about US$ 10,000), “high cost” with >SEK 500,000 

(about US$ 45,000) per QALY, and “very high cost” with 

>SEK 1,000,000 (about US$ 90,000) per QALY.   

Health-economic studies may be seen as an essential 

aspect to obtain a public reimbursement policy in the 

counties. 

POLAND 

Currently microprocessor-controlled prosthetic technology 

is not covered by the public health care system. 

Nevertheless, due to the country’s economic development 

and growth, its coverage is being discussed. There are two 

different pathways working in parallel to appraise health 

technologies including P&O that both take health 

economics into account to some extent. The pathway based 

on the new Act on Health Care Services Financed by Public 

Resources,50 introduced in 2012, is based on a well-

described procedure of reimbursement decision-making for 

specific products with publication of the findings. The other 

one is based on the Reimbursement Act of 201151 with an 

HTA process that always evaluates an entire class of 

products. Reimbursed products are then published in the list 

of medical devices dispensed to patients on professional 

prescription. During the HTA process, a “threshold price” is 

calculated52,53 that ensures that the ICER does not exceed 

three times the per-capita GDP (2019: US$ 15,595, 

resulting in a threshold of US$ 46,785).54 

UNITED KINGDOM 

The UK has 3 HTA bodies, each of which has its own 

approach to the assessment of health technologies for the 

National Health Service (NHS) trusts in England,55 

Scotland,56 Wales57 and Northern Ireland58 (adapt National 

Institute for Clinical Excellence [NICE] guidance after 

confirming it is applicable locally), all of them mainly driven 

by health-economic evidence. Third-party assessments 

have to follow the HTA bodies’ assessment methodology. 

The NICE has adopted a cost-effectiveness threshold of 

£20,000 (US$27,200) per QALY,59 which is a benchmark 

also used within the EU if no national thresholds exist. 

The NHS England reviewed clinical outcomes as well as 

health-economic data for the clinical commissioning policy 

on microprocessor-controlled prosthetic knees in 2016.60 

Though the majority of the available evidence was 

generated with C-Leg, the policy has granted coverage for 

MPKs in general under the condition that patients meet 

certain qualifying criteria.  

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Also in 2016, the National Institute for Health Research 

commissioned an HTA of the “Orthotic Management of 

Instability of the Knee related to Neuromuscular and Central 

Nervous System Disorders including Economics”,8 

concluded that the evidence on the effectiveness of 

orthoses is limited, especially with regards to outcomes that 

are important to orthoses users, emphasizing the need for 

high-quality research on the effectiveness and cost-

effectiveness of orthoses and the development of a core set 

of outcome measures. 

As UK HTA reports are highly regarded by other European 

agencies and vice versa, these reports in the P&O segment 

in conjunction with the implementation of the Medical 

Device Directive must be taken seriously by manufacturers. 

ASIA-PACIFIC 

The implementation and development of health-technology 

assessments in the relatively new healthcare systems in 

Asian countries has taken place with a time delay compared 

to the USA and Europe. The growing necessity to provide 

the best value for the available resources while 

safeguarding accessibility to care has only recently led to 

an increasing number of Asian countries (Malaysia, 

Thailand, South Korea, Vietnam, Indonesia, Japan, and 

China) that have started implementing HTAs. However, the 

evaluation processes for clinical and economic evidence of 

healthcare technologies is often not yet formalized.61 In 

most cases, P&O is still treated as a separate sector that is 

not (yet) affected.  

In general, the assessment of clinical outcomes is 

particularly complex since historically, many international 

pharmaceutical companies or medical device 

manufacturers have not conducted studies in Asia. 

JAPAN 

Japan achieved universal health insurance coverage in 

1961.61 Healthcare spending as a share of GDP was 10.9%, 

the sixth highest among OECD countries, and per-capita 

expenses were US$ 4,519 in 2018.62 Today the country is 

ranked highly across numerous health indicators.63 After a 

3-year HTA pilot testing phase, HTAs including health 

economic studies and budget-impact analyses were 

formally implemented in 2019.62-64  

In general, a payer perspective is required in cost-

effectiveness studies. In case the intervention has an 

impact on productivity, a social perspective according to the 

Core2health methodology64,65 is preferred. Japan has a 

policy of tight control of health care costs64 and is the first 

country using an algorithmic method for ICER-based 

pricing.66 That means that price reductions are executed in 

a 3-layer approach: 30% if the ICER is >5 million yen (about 

US$ 50,000) per QALY, 60% if the ICER is >7.5 million yen 

(about US$ 75,000) per QALY, and 90% if the ICER 

exceeds 10 million yen (about US$ 100,000) per QALY. For 

rare diseases, cancer or pediatric therapies, 50% higher 

thresholds are acceptable. Nevertheless, there is concern 

that this approach does not completely conform with ISPOR 

recommendations and does not use the ICER exclusively to 

demonstrate cost-effectiveness.67   

Currently, P&O is not appraised for public reimbursement 

under this process. However, clinical outcome 

(effectiveness) is reviewed and published health-economic 

studies or public reports of HTA bodies are supportive to 

obtain public reimbursement. Coverage is subsequently 

determined by the 47 prefectures and 1,718 

municipalities.68 Individual case-by-case reimbursement 

review is a common approach in P&O. If a policy for 

reimbursement is to be established, the opinion of a medical 

society and guidelines are required. 

CHINA 

In China a transformation process of the healthcare system 

is ongoing with the goal to achieve access of all citizens to 

the same healthcare standards in all provinces.69 The 

harmonization process for one national health-technology 

assessment standard is one part of it. The latest initiative 

was started in 2016 by the China National Health 

Development Research Center (CNHDRC) to develop HTA 

capacity and expertise by founding the China Health Policy 

and Technology Assessment Network which compromises 

29 agencies, universities, hospitals and professional 

associations in 2016.69-71  

An HTA guideline development process is also ongoing to 

strengthen the implementation of HTA, with a first 

publication of the China Guidelines for Pharmacoeconomic 

Evaluations in 2015 and a nationwide task force to 

continuously develop and refine them.72 The Chinese health 

insurance system is a patchwork of different types of 

mandatory and voluntary private health insurances. Most 

Chinese residents are covered by up to three types of basic 

social health insurance (BSHI), namely, Health Insurance 

for Urban Employees (HIUE), Health Insurance for Urban 

Residents (HIUR), and New Rural Cooperative Medical 

Scheme (NRCMS). This complex system has led to a 

diversity of multi-level payer plans.69 It has not been defined 

yet if health-economic studies will be used in the private 

health insurance sector. P&O is handled as a different 

sector, the role of HTA is not yet defined either. 

Health-technology assessments of certain P&O 

technologies have been performed in a number of 

countries. Table 1 gives an overview on the country, the 

technology assessed, the level of the HTA, and the 

institution that conducted or commissioned the HTA. In 

total, 16 HTAs were identified. Nine HTAs were conducted 

the payer’s side, with 8 of them being reviews of published 

outcomes (level 1) and one being a CEA from the payer’s 

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perspective. Two thirds of the HTA assessed a single 

product and 33% a class of products. HTA conducted by 

other parties included 6 analyses from a payer’s 

perspective, thereof only one for a product class and two 

from the societal perspective, both for MPKs.  

HEALTH ECONOMIC ANALYSES MAY HELP 

SUPPORT FUTURE COVERAGE OF TRUE 

INNOVATIONS 

Health-economic analyses should primarily be performed 

for truly innovative products or those with high budget 

impact on the healthcare system to justify the efforts of the 

industry. This requires a well-developed research plan with 

scientific objectives that are relevant and beneficial to 

patients.81 As this is so important, it is desirable to have a 

transparent interaction process with payers whenever 

possible to obtain their perspective on what information is 

needed and which advancements are perceived valuable. 

Several such evaluations may culminate in an accepted 

standard how to conceive a health-economic model that can 

guide smaller companies and payers in the future.  

In the research & development process, health-economic 

analyses of manufacturers have to deal with the challenge 

of little or even no availability of objective data in the 

Table 1: Overview health technology assessment activities performed.  

country 
HTA level 1 outcome 
Review 

HTA level 2 
CEA payer 
perspective 

HTA 
Level 3 CEA society 
perspective 

Conducted by other parties 
A= association (industry) 
H= Health economic Institution 
M=Manufacturer 
R= Research group 

Payer 

Canada C-Leg    P6 

Canada  C-Leg   P7 

USA MP lower limb prostheses    P5 

USA   MPK A, H10  

USA  Genium  R73  

Germany  C-Leg  H, M40  

France C-Leg    P HAS74 

France Kenevo    P HAS75 

France Rheo    P HAS81 

France Plié    P HAS77 

Italy  C-Leg  R, M78  

Italy   MPK R, M79  

UK MPK    P60 

UK Orthoses neurologic knee instability    P8 

Sweden  Kenevo  H, M, R49  

Sweden  Osteointegration  R80  

Total 
publications 

8 6 2 7 9 

 

Table 2: Health Economic Analyses in the R&D Process of manufacturers and in the product life cycle.82 

Phase Information based on HTA Subsequent manufacturer’s decisions 

Early -State 
Development 

• Potential of a prosthesis/orthosis being cost-effective as part of manufacturer’s 
investment decision  

• prioritize between competing possibly cost-effective concepts or prostheses/ 
orthoses; 

• identify those parameters that have the largest impact on the likely cost-effectiveness 

of the prosthesis/orthosis in order to direct limited research funds.5 

• Design and management of prostheses and 
orthoses 

• Regulatory and reimbursement strategy 
 

Mid-state 
development 

• Feasibility check of cost-effectiveness based on first observational / small clinical 
studies 

• Develop optimal clinical assumptions with clinical experts 

• Develop a disease-specific model 

• Value proposition 

• Health-economic study for payer review 

Late-state 
development 

• Cost-effectiveness can be demonstrated 

• Affordability is shown with a budget-impact analysis 

• Claims for reimbursement 

Product life 
cycle 

• Re-calculate the health economic model with extended data 

• Validate assumptions 

• Use to maintain or extend coverage 

 

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beginning and the need for several iterations and 

refinements with improving availability of data along the 

way. Therefore, the methodological approaches can be 

divided in four phases (Table 2). Further details and 

limitations (Table 3) have already been published by the 

authors elsewhere.82 

WILLINGNESS TO PAY AND SHIFT TO 

VALUE-BASED HEALTH-CARE FUNDING 

An obvious important limitation of health-economic 

analyses is the ultimate determination of the “willingness to 

pay” of health-care payers (key figures for willingness to pay 

see Table 4). In addition, the willingness to pay varies 

between countries and sometimes even between different 

authorities or insurances within one country.26-29 

Nevertheless, it is an important step towards meaningful 

healthcare research and a fact-based negotiation with 

payers. However, in times of restricted budgets, even well-

performed health-economic studies do not automatically 

guarantee coverage and reimbursement of a product. For 

priority setting in health policies, a second aspect, 

affordability from a payer´s perspective, must be reflected.83 

This raises the challenge to the researching manufacturer 

to model the budget impact on resources consumed using 

national cohort data. If available, the effort to analyze the 

tremendous volume of data (DRG / ICD-10) is very time-

consuming. So far, two publications for MPKs fulfill this 

concept in a German and Swedish context.40,49 However, 

despite demonstrating the affordability of an intervention, 

the decision to grant coverage and reimbursement is left to 

the payer. Shifting from a price-based to a value-based 

discussion may help promote this change and overcome the 

current barriers of capped reimbursement that attempt to 

force innovative technologies into existing billing schemes 

for established components, leaving little or even no room 

for the appropriate reimbursement of truly innovative 

components with proven clinical benefits. This will become 

increasingly important as patients are fitted in greater 

numbers with microprocessor-controlled components. In 

addition, HTA bodies and payers should not only demand 

high-quality research from manufacturers of innovative 

devices but also value it by setting the same bar for 

technology followers, rather than letting them get away with 

just claiming equivalence to predicate devices.  

Table 4: Willingness to pay assessment key figures. 

Cost-effectiveness Budget Impact 

Defined threshold 46,53,55,59,61 
Absolute costs and 

savings83 

Country’s per-capita gross domestic 

product (GDP)84  
 

ICER accepted for payment as reference 

US dialysis USD 50,00085  
 

 

Finally, because health-economic modeling and analyses 

are currently uncommon in R&D processes, prosthetic 

manufacturers are advised to benefit from the experience of 

pharmaceutical and implantable medical device companies 

and health economic research institutions to shorten the 

learning curve and minimize waste of investments. 

LIKELY CONSEQUENCES OF THE ADOPTION 

OF HEALTH-ECONOMIC EVALUATIONS ON 

THE MARKETS FOR PROSTHETIC AND 

ORTHOTICS 

The adoption of health-economic evaluations in P&O would 

require a substantial expansion of clinical research 

capabilities, staff and funding among manufacturers. Given 

the current structure of the prosthetic manufacturer 

community with its many smaller businesses, this will 

present a substantial challenge. It may result in a further 

partition of the manufacturer community, the need to 

collaborate and cooperate, and perhaps even mergers. 

Smaller companies that are unable to absorb the additional 

Table 3: Limitations to health-economic modeling and analyses in the development process and product life cycle. 

 Limitation Stage 

Implementati
on 

• Level of health economic expertise 

• Resources (cost, time) 

• Interdisciplinary cooperation (all relevant stakeholders) 

Development 
process 

Intervention 
• Innovation in medical devices is often a process of continuous incremental improvement. 

• Short life cycle compared to drugs 
Any stage 

Comparator • Treatment standards are very often not established Any stage 

Model inputs 
• Manufacturer’s access to national databases (cost, epidemiology) 

• Resilient outcome measures 
Product life cycle 

Decision • Based on analyses that contain the best knowledge available at the time.  Any stage 

Optimum 
price setting 

• Interaction of all stakeholders 

• Patient potential (revenue) 

• Estimated cost-effectiveness in daily practice 

Early stage 

Investment 
• Estimates per one health-economic study published by a manufacturer range from €50,000 to €100,000 (US$60,000 

to US$120,000), depending on external and internal expert involvement and model input data processing 
Product life cycle 

 

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investments will likely have to focus on me-too products that 

fit into the limitations and restrictions of the current 

reimbursement systems.  

However, even the group of bigger manufacturers will likely 

have to make some tough decisions. Clinical and health 

economic research is expensive and can therefore only be 

done for new high-price innovative products. Thus, 

manufacturers will have to decide which of their products 

and R&D projects they want to support with this additional 

investment, leaving some of their products or even entire 

product categories vulnerable. 

Another challenge that may arise is that some products may 

deliver their biggest benefits with a good incremental cost-

effectiveness ratio to a relatively small group of patients that 

may not be big enough to justify the R&D and research 

expenses. The phenomenon of disappearing innovation in 

small markets is well known from the pharmaceutical 

industry. To prevent that from happening, there are 

proposals to develop tests to identify likely responders and 

reimburse the treatment of these patients at higher rates to 

justify the R&D expenses and keep these small markets 

economically attractive.86 In P&O, the procedure of trial 

fittings could serve that purpose.      

Another challenge to innovative manufacturers is the 

burden to beat the path for new technologies. Followers wait 

until a favorable reimbursement infrastructure has been 

established, and then launch me-too products that do not 

require the same level of evidence as the predicate device, 

if any. As these manufacturers save the substantial 

expenses for clinical and health-economic research, they 

are usually able to offer their devices at lower prices. This 

creates a competitive advantage for me-too manufacturers 

in many markets and makes it more difficult for innovative 

companies to recoup their R&D investments. 

Therefore, increasing requirements for demonstrating 

clinically meaningful patient outcomes and health-economic 

evidence may be perceived as a short-term advantage but 

long-term disadvantage for manufacturers that are willing to 

make the necessary research investments. However, a 

positive development can meanwhile be observed in the 

European Union that now regulates product entrance in the 

market by requiring clinical data generated for every 

individual product and continuous post-marketing patient 

safety monitoring. This precludes the manufacturers of me-

too devices from simply claiming equivalence with predicate 

devices. A similar model would be desirable for the US and 

Canada to maintain the fiscal incentives of research-

supported innovation. This would be in the best interest of 

patients, suppliers, providers, and health care payers, as 

the vast majority of prosthetic and orthotic devices are 

currently not strictly regulated by research requirements for 

safety and effectiveness set by regulatory bodies.   

 

CALL TO ACTION 

Manufacturers of prosthetic and orthotic products need to 

recognize the increasing prevalence and importance of 

HTAs for medical device coverage and reimbursement. The 

requirements to the evidence to be demonstrated are 

currently only beginning to surface. Unlike the past, when 

most manufacturers waited for an industry leader to come 

forward and do the work for their product and then claimed, 

without any proof, that these studies also applied to their 

products, all manufacturers are called upon to contribute to 

the body of evidence for certain product categories, such as 

MPK or microprocessor-controlled feet. That would both 

substantially enlarge the body of evidence for the respective 

product category and fix the current limitation that study 

results for one product are assumed to apply to the entire 

category without any proof. Evidence that is more 

representative of the product diversity in the market would 

certainly be much more compelling to payers. In that 

context, industry and professional associations are called 

upon to support this process of evidence generation by 

commissioning independently conducted systematic 

reviews of the existing literature.  

Finally, health insurances and payers for O&P products in 

general are called upon to no longer reduce health economy 

in this field to simple cost savings but apply value-based 

approaches that are similar to those already used for other 

medical devices but reflect the peculiarities of O&P. 

Ultimately, considerable transparency between payers and 

their willingness-to-pay thresholds for valued clinical 

benefits will enhance the willingness of manufactures to 

pursue continued innovation with a sustainable cost model. 

As the emphasis on demonstrated clinical effectiveness and 

value increases, policy makers are advised to hold 

individual components to comparable standards of 

demonstrated performance to ensure that the costs of 

development in this value-based model are born equally 

across all component developers and manufacturers. 

Nevertheless, health economy is unable to answer the 

question how the inevitably incremental cost to pay for 

innovative, yet cost-effective services and products shall be 

funded. Societies will need to have an open discussion to 

find a compromise between stimulation of medical 

innovation and affordability of the healthcare systems. 

ACKNOWLEDGEMENTS 

None. 

DECLARATION OF CONFLICTING 

INTERESTS 

Both authors are full-time employees of Otto Bock Healthcare. 

SOURCES OF SUPPORT 

Ottobock allowed both authors to work on this article during their 

regular working hours and use the company’s office equipment 

(computers, Internet access, etc.).   

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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

ISSN: 2561-987X 
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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

ISSN: 2561-987X 
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Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

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HEALTH ECONOMICS IN THE FIELD OF PROSTHETICS AND ORTHOTICS  

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13 

Kannenberg A, Seidinger S. Health economics in the field of prosthetics and orthotics: A global perspective. Canadian Prosthetics & Orthotics Journal. 2021; 
Volume 4, Issue 2, No.6. https://doi.org/10.33137/cpoj.v4i2.35298 

ISSN: 2561-987X 
HEALTH ECONOMICS IN THE FIELD OF PROSTHETICS AND ORTHOTICS  

Kannenberg & Seidinger, 2021 CPOJ 

Special  

 

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AUTHORS SCIENTIFIC BIOGRAPHY 

Andreas Kannenberg graduated 

from Charité Medical School at 

Humboldt University in Berlin, 

where he also wrote his 

dissertation in exercise physiology. 

He had worked as a physician in 

Germany for more than 10 years 

before joining Ottobock in 2003. 

He has been serving as the 

Executive Medical Director North 

America since 2013. He 

coordinates Ottobock’s clinical 

research in the Americas and is 

part of its global medical and 

research team. In his prosthetic 

and orthotic research, he has been focusing on microprocessor-

controlled prosthetic knees, microprocessor stance and swing 

control orthoses, and multi-articulating hands. A recent new focus 

of his research has been the impact of prosthetic components on 

musculoskeletal pain in individuals with lower-limb amputations. He 

is an affiliate member of the American Academy of Orthotists and 

Prosthetists (AAOP) and a member of the Clinical Education 

Committee of the American Orthotic and Prosthetic Association 

(AOPA). 

Susanne Seidinger graduated 

as a Doctor of Veterinary 

Medicine from the Veterinary 

University of Vienna, Austria, and 

has gained significant experience 

in medical affairs, health 

economy, healthcare policies, 

market access and 

reimbursement roles in the 

medical device and 

pharmaceutical industry. In 

addition, she acquired a 

certification in Health Technology 

Assessment from Sheffield 

University. She joined Ottobock in 

2017 and has been serving as Director Global Market Access 

Management since 2019. The focus of her research has been the 

entire spectrum of health economic studies in highly innovative 

medical, prosthetic and orthotic products. 

 

 

https://doi.org/10.33137/cpoj.v4i2.35298
https://webzine.has-sante.fr/upload/docs/evamed/CEPP-5167_RHEO%20KNEE_11_septembre_2018_(5167)_avis.pdf
https://webzine.has-sante.fr/upload/docs/evamed/CEPP-5167_RHEO%20KNEE_11_septembre_2018_(5167)_avis.pdf
https://www.has-sante.fr/upload/docs/application/pdf/2018-01/plie3_transcription_du_27_juin_2017_pc.pdf
https://www.has-sante.fr/upload/docs/application/pdf/2018-01/plie3_transcription_du_27_juin_2017_pc.pdf

