FEATURE: LESLIE FLICK AND JULIE SCHULZ, MD, MPH
MEMBERS IN A HOSPITAL CONSORTIUM HAVE REDESIGNED HOW THEY MANAGE THEIR CLINICAL PRODUCT SPEND BY ENGAGING CLINICIANS WITH SCIENTIFIC EVIDENCE THAT HELPS THEM DETERMINE THE TRUE VALUE OF DEVICES.
In 2014, finance and clinical leaders at Health Future, LLC, a Medford, Ore.-based consortium of independent hospitals and health systems in Oregon and Nevada, realized they had an opportunity to collaborate with physicians on a pilot to improve patient safety and quality in their electrophysiology labs. Specifically, they wanted to engage physicians in helping them understand whether emerging cardiac rhythm management (CRM) technologies were truly making a difference in patients’ lives or simply contributing to rising product spend. Their solution was to use peer-reviewed clinical research as a basis for thoughtful discussions with physicians that would help them better understand the extent to which the expectations for technologies were actually reflected in documented patient outcomes.
By providing finance and clinical leaders with published scientific evidence that indicates the true value of the devices, Health Future has set the stage for its member hospitals to see better collaboration between these leadership groups. The consortium’s experience highlights strategies that hospital and health system finance leaders can use to help their organizations understand the value of emerging technologies while building better relationships with physicians.
Scope the Project
Health Future is owned by five health systems and is led by a board of governors (comprising CEOs from owner-member hospitals) and an operating council (comprising CFOs from member organizations).
Health Future does not have a traditional value analysis committee; rather, it uses pharmacy, lab, and supply chain councils that come together for centralized contracting for non-clinically sensitive items. For clinically sensitive items, including physician preference items such as devices, Health Future forms task forces of clinical and financial leaders who are responsible for value analysis across the membership. At the same time, member hospitals maintain their own value analysis committees in their own organizations.
The Health Future task force that was charged with the CRM initiative sought to understand whether premium-priced CRM products always translated to better patient outcomes. The task force recognized that a fair assessment also required an understanding of the extent to which higher-cost and lower-cost products are comparable based on the clinical evidence.
Specifically, the task force wanted to engage physicians to answer the following questions:
- What is the value of different product features and technologies in a single device category?
- Have the new technologies entering the market been truly revolutionary or simply evolutionary?
- If one device costs more than a comparable device, is the price difference justified by superior patient outcomes?
The task force operated under Health Future’s belief that opinions of physicians from both inside and outside of the organization could foster a meaningful discussion focused on identifying untapped opportunities to achieve the Triple Aim by improving population health and patients’ experience of care while potentially lowering costs.
Elevate the Conversation with Clinical Evidence
Business leaders and physicians alike often dread conversations about physician-preference items like CRM devices, as it can be difficult to meet the two key goals of improving quality and achieving cost savings simultaneously. Peer-reviewed literature can be an important part of these conversations, because it can help engage physicians in a conversation about patient outcomes.
Each manufacturer uses its own branded names for device technologies, so assessing features can be difficult. And unlike pharmaceuticals, which can be compared by classes, devices do not share a fixed categorization taxonomy. Health Future’s CRM task force therefore recognized the importance of comparing products based on functional and clinical objectives. The group understood that such research should cover safety, effectiveness, recalls, and appropriate use of products, as well as manufacturer-sponsored studies when appropriate. In particular, they were determined that the studies include appropriate patient-oriented outcomes, such as shortness of breath and quality of life, not just disease-oriented outcome like EKG results.
There was some early disagreement among physicians on what truly was best for patients. But the evidence helped foster a healthy debate that eventually led to greater alignment. One example was when the task force reviewed the merits of devices designed for safe use in magnetic resonance imaging (MRI) procedures, called MRI-conditional devices. At the start, not all physicians agreed that MRI-conditional devices are necessary, so the clinical literature became important for directing the discussion. After reviewing the evidence, the physicians agreed that, although there are some advantages to MRI-conditional devices, these devices do not warrant a price premium based on the clinical evidence.
Throughout the process, many physicians at Health Future’s member hospitals were surprised to learn there was little scientific evidence to support some of their device preferences and appreciated the clarity that an objective assessment of the scientific literature provided. After reviewing the evidence, physicians agreed that pricey features like timing optimization in CRM devices with built-in defibrillators do not provide an additional benefit to patients, which led them to agree on an approach to using a less costly device. Overall, the focus was on having a more sophisticated conversation with physicians based on the clinical comparability of products, not on appropriate patient selection, which tends to be more controversial. The conversation also did not focus on the financial advantages of one product or another.
Assess Potential Financial Opportunities
After reviewing the evidence presented by the task force, physicians and finance leaders at each facility worked together to assess whether standardizing to one or two vendors made clinical and financial sense. First, however, some physicians needed to understand what standardization means in the context of contracting strategies. Some mistakenly believed that under standardization, all procedures must be performed using one product or manufacturer. In reality, standardization typically means selecting one vendor for 60 to 80 percent of market share. Once physicians understood that they could still use other devices for niche procedures or for patients with unique clinical needs, they were much more willing to engage in the conversation.
After reviewing the clinical evidence, leaders at one Health Future hospital—St. Charles Health System in Bend, Ore.—determined they could purchase 60 percent of their CRM devices from one vendor and 80 percent of their devices from two vendors. Leaders at another member organization—Asante, a three-hospital system in Medford, Ore.—committed to sourcing 80 percent of their CRM devices from two vendors.