However, hospitals are struggling because this lack of analytical rigor isn’t just a process problem. Its stems from a larger issue—a lack of good data.
The Scary Current State
While it seems astonishing in this era of “Big Data,” hospitals struggle to access accurate information on medical devices and the clinical and financial outcomes associated with them. In fact, a Procured Health survey of over 100 hospitals found that only 28% of respondents consistently reviewed critical safety information like adverse events and FDA or vendor product recalls prior to selecting medical devices. Similarly, only 25% of respondents evaluated comparable products to see if they provided superior clinical outcomes instead of just purchasing the requested product.
Even more concerning is that 73% of survey respondents said that vendors are their primary source for clinical information. In short, everyday consumers do more research on purchases like flat screen TVs then hospitals do for patients coming in for surgery, putting their lives on the line.
Is that the due diligence that hospital administrators or physicians would want for their own families? Clearly not.
An Action Plan that Starts with Patients and Doesn’t Forget Finance
While the problem is evident, transitioning to more analytical approach that takes into account both clinical and financial factors often seems daunting to hospital administrators.
Here are 3 guidelines for getting started:
1. Identify key clinical data points – Hospital administrators must consider a number of data points prior to making device purchasing decisions, most of which are routinely ignored today. They must not only consider historical utilization for devices, but also what the market landscape looks like for similar devices. There may be a number of vendors offering alternative devices that would uphold the clinical needs of the medical staff.
Essential questions to ask include: What functional attributes matter to clinical end users; is there a difference in clinical outcomes across products; what are we already buying today; and are new products coming on the market soon. The market landscape analysis must also account for product safety and effectiveness, including adverse events and all recalls.
2. Review the total cost of ownership (TCO) – Hospital administrators must better evaluate the total cost of ownership (TCO) for devices. Clinical supplies represent the second largest and fastest growing cost category for hospitals and estimates show that poor decisions on clinical supplies will account for more than $35 billion in wasteful spending this year alone. New clinical products are responsible for a large portion of this excess spend.
Calculating TCO means including both product and non-product costs like training costs, switching fees, reimbursement changes, and clinical outcomes like reduced length of stay (LOS). Understanding the overall financial impact often prompts hospitals to make different decisions than they would by looking at price alone. A more expensive product may be worth the cost, if less expensive alternatives yield poorer clinical outcomes that may result in re-hospitalization.
3. Remember that device selection isn’t the end – Taking an analytical approach to clinical spend management does not end with the product selection. Hospitals must also begin tracking the financial and clinical outcomes associated with device selection. Tracking long-term results can help hospitals to monitor changes in their payer landscape, assess physician claims around their perceived productivity using certain products, and measure vendors’ claims around improved clinical outcomes. Modeling the before and after of device implementation is the key to addressing the many unknowns around any product implementation—and making even better decisions moving forward.
Lastly, hospital administrators shouldn’t be discouraged because implementing a new process takes time and resources. Just remember, it’s all worth it for the patients—the ones in the operating room right now—who assumed this was happening all along.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
