Presentation on theme: "A Collaborative Effort Hayes, Inc. TriMedx Catholic Health"— Presentation transcript:
1 A Collaborative Effort Hayes, Inc. TriMedx Catholic Health Medical Equipment Planning AHRMM SEPAC, November 15, Presentation Objective -Provide a High-Level Overview of Medical Equipment PlanningA Collaborative EffortHayes, Inc.TriMedxCatholic Health
2 Panel Company Overview - Objective! Hayes, Inc.Internationally recognized health technology research and consulting company, serving hospitals, health systems, health plans, employers, and government agencies.Employ highly qualified and experienced clinicians, analysts, and consultants (35+).Mission is to improve healthcare quality through the use of evidence.TriMedxTriMedx, a subsidiary of Ascension Health, has helped 500+ healthcare providers reduce expenses, increase patient throughput, and drive profitability through innovative management programs centered on medical technology assets. Delivering 99% uptime, around-the-clock response and unbiased, total-cost-of-ownership equipment data, TriMedx has saved its clients nearly $150 million to date.Catholic HealthCatholic Health in Buffalo, NY is a non-profit healthcare system that provides care to Western New Yorkers across a network of hospitals, primary care centers, imaging centers and several other community ministries (8,200 employees, 1,200 Physicians).\
3 Medical Equipment Planning StrategyBusiness DriversClinical OutcomesPerformanceScope of the BuyEquipment WarrantySoftwareTrainingMedical Equipment AcquisitionImpact of Healthcare ReformPhysician PreferenceRecent Trends – Emerging TechnologyInteroperabilityNetwork SecurityTotal Cost of OwnershipBudget DevelopmentEquipment FunctionalityOperations IssuesRegulatory Compliance Strategies
4 Healthcare Reform Impact CHANGEIMPROVE QUALITYREDUCE COSTSHandout provided: Healthcare Reform and The Supply ChainVolume Based to Valued BasedBe Evidenced Based - Data Driven!Demonstrate Value!“A hospital will need to generate $11,700,000 in new revenue to have the same impact as a $100,000 reduction in operation costs. ”The Source Book Comparative Performance in US Hospitals -Deloitte Touche
5 Comprehensive Lifecycle Management - Business Model Right TechnologyCapital Equipment and Technology PlanningSelection and ProcurementImplementationManagement and SupportEnd of Life ManagementRight TimeAlignment with strategic plansEvidenced Based Clinical OutcomesEvidenced-Based Equipment Performance DataCurrent State/Gap AnalysisEfficient capital planningReplacement schedulingRight CostRight PlaceLimit the Scope of the BuyAll-inclusive ROICompetitive capital sourcing processTracking and managementMetricsOptimizing asset utilizationTechnology redeployment
6 Total Cost of Ownership Total Cost of Ownership: CT ScannerPurchase Price - $1.5MTotal Cost of Ownership $3,432,546Total Cost of Ownership: Breast MRIPurchase Price – $1.5MTotal Cost of Ownership - $3,740,457Total Cost of Ownership: CyberKnifePurchase Price - $3.2MTotal Cost of Ownership - $8,502,505Handout: Understanding Total Cost of Ownership in Capital Equipment Planning
7 Evidence-Based Medical Technology Planning AHRMM SEPAC,November 15, 2011Evidence-Based Medical Technology PlanningJennifer E. Van PeltSenior Research AnalystSenior Hospital ConsultantHayes, Inc.
9 Is an expensive new medical technology worth the cost? In the “healthcare crisis” and “healthcare reform” debates, two themes that underlie every other issue appear to be…QUALITYCOSTIs an expensive new medical technology worth the cost?
10 Projected U.S. Healthcare Costs Rising CostsProjected U.S. Healthcare CostsI’m going to start with the big picture. At its current rate of increase, US total spending on health care will double in the next 10 years, growing from 16% to 20% of GDP. That means that in 2017, 1 out of every 5 dollars spent in the US economy will go through the health sector. That leaves only 4 out of 5 dollars for EVERYTHING ELSE. There is growing consensus among economists and health policy experts that this is not sustainable.20-50% of that increase in spending is due to new medical technology – 256 slice CT scans, silver dressings, drugs, etc. Given that new medical technology is the single biggest driver of increases in unsustainable healthcare costs, and given that we haven’t been seeing 20-50% improvements in healthcare outcomes, questions are starting to be raised as to whether we are really getting our money’s worth.So that’s the big picture. Now I’m going to switch to what it looks like from the hospital point of view.**************************2007-Health spending 16% of GDP, 2017-(projected) 20% of GDP (CMS data, reported in Bending the Curve, Commonwealth Fund))
11 Are We Getting Our Money’s Worth? Americans spend more of their economy for healthcare than any other developed country.Healthcare StatisticsCountry% GDP for Healthcare (2008) 1Life Expectancy at Birth (2010 est.) 2Infant Mortality (Per 1000 Live Births) (2010 est.) 2Canada10.481.29 yrs4.99 deathsFrance11.281.09 yrs3.31 deathsGermany10.579.41 yrs3.95 deathsSwitzerland10.780.97 yrs4.12 deathsU.S.16.078.24 yrs6.14 deaths1 Source: OECD Health Data – Frequently Requested Data , 20102 Source: CIA – The World Factbook. , 2010
12 Factors Contributing to Growth in Healthcare Spending Per Capita Why Are Costs Rising?Factors Contributing to Growth in Healthcare Spending Per CapitaFactor%Aging of the Population2Changes in Third-Party Payment10Personal Income Growth11–18Prices in the Health Care Sector11–22Administrative Costs3–10Technology-Related Changes in Medical Practice38–62As pressure builds to rein in the unsustainable rise in US healthcare costs, new technology is coming under increasing scrutiny and government, payers, and the public are starting to ask the question:********Estimating share - R&D as proxy, vs residualIf asked about the fact that Cutler thinks it is money well spent, point out that he analyzed a few carefully chosen technologies. If he had analyzed cardiac cath for stable angina instead of cardiac cath for actual myocardial infarction, he would probably have gotten a different cost-benefit ratio.Source: Smith, Heffler, and Freeland in CBO (2008)
13 EBTA versus EBMEBMEvidence-based clinical decision making combines the best available research evidence with clinical experience and patient values with the goal of improving quality of patient care.
14 EBTA versus EBMEBTAEvidence-based technology decision making considers the best available research evidence along with other factors (cost, local market, business plan) with the goal of improving the new technology acquisition process.
15 Systematic Use of the Best Available Evidence to: What Is EBTA?Systematic Use of the Best Available Evidence to:Acquire the best available technologyAvoid acquiring ineffective or unsafe technologyWith the Goals of:Improving patient careBetter managing new technology costs(slide) Simply put...Key features are systematic – EBTA takes into account all the relevant evidence, not simply what is convenient or nearest to handAnd objective – EBTA makes decisions based on data that everyone can look at and use to draw conclusions, rather than on opinion or fashion
16 Levels of Evidence Higher Lower STRENGTH OF EVIDENCE Large, multicenter RCTsMeta-analysis of grouped dataSmaller, single-site RCTsProspective studiesRetrospective studiesStudies with historical controlsCase series or reportsConsensus/expert opinionNot all reports or journal articles should carry the same weight. Large multicenter randomized controlled trials, if well done, are more reliable than a case series. At the same time, a poorly designed trial may give misleading results. For these reasons it is important not to rely on single study or a manufacturer’s website for important decisionsSeveral systems for grading evidence (ho)Grades of Recommendations, Assessment Development and Evaluation (GRADE)United States Preventive Services Task Force (USPSTF)
17 Trade Journals Say “It’s A Must Have” Reality??Sales Rep Says It’s theLatest GreatestCompeting Hospital Has ItCosts LessDocs Want It—NowNew Technology AcquisitionTrade Journals Say “It’s A Must Have”Patients Saw It on TV and Want It(Perceived Revenue Generator)
18 Elements of HTA Definition of the Question(s) Systematic Literature SearchCritical Appraisal of the EvidenceAnalysis of the Body of EvidenceConclusions about Safety, Efficacy, Clinical Effectiveness
19 New Technology Example: 256-Slice CT Emergency Department ImagingMarketed as:Significantly faster and better image qualityImproved imaging of obese patients, pediatric patients, trauma, and complex cardiac and neurologic cases
20 New Technology Example: 256-Slice CT Emergency Department ImagingPublished evidence:No studies directly comparing with 64-slice CTNo studies on emergency department imaging and patient outcomes256-slice CT costs 2.5 to 3 million or more. 64-slice CT costs approx. 1.7 millionIs it worth the extra $1 million+?
21 Robotic Surgery205,000 procedures performed with da Vinci System in 2009Tripled since 2007 (80,000 procedures)In 2007, 800 total systems in use in U.S.; by 2009, 1400 systems in useOutside the U.S., 200 systems in 2007; 400 by 200921
22 Clinical Applications Robotic prostatectomyRobotic hysterectomyRobotic cystectomyRobotic coronary artery bypassgraft (CABG)Robotic valve repair and replacementRobotic nephrectomyRobotic endovascular/vascular surgeryPediatric surgery (Nissen fundoplication, pyeloplasty, patent ductus arteriosus closure)Robotic thyroidectomyRobotic colorectal surgery
23 Robotic Surgery Issues Quality of evidence an issue—data from limited number of treatment centers, overlapping study populations, small studies, lack of long-term follow-upDefinitive evidence-based conclusions not possible due to lack of randomized comparative studies with laparoscopic equivalentsIn some cases, less blood loss, fewer complications, more precision, overcome technical limitations of conventional surgery
24 HTA Reveals Other Implications Longer operative times for certain procedures (e.g., artery harvesting)Substantial training requirements for surgeonsHigh acquisition cost , > $1 millionRenovation of OR suite may be requiredLonger preprocedure set-up timesExpensive accessories, annual maintenance, consumables
25 In the U.S., Changing Clinical Practice… From 2005 to 2008, the number of hospital discharges for prostatectomy increased > 60%, despite decrease in incidence of prostate cancer.Number of robotic prostatectomies increased substantially from 2005 to 2008.Medicare data shows that patients diagnosed with prostate cancer in 2005 were more likely to undergo surgery by 2007 than patients diagnosed from 2001 to 2004.Barbash and Glied, NEJM, August 2010
26 In the U.S., Changing Clinical Practice… Robotic surgery may have caused shift from nonsurgical to surgical treatment, increased surgical case volumes, and costs of procedure.Emerging evidence suggests that, despite short-term benefits, robotic surgery may not improve patient outcomes or quality of life over the long term.One study reported, “Patients who underwent robotic prostatectomy were more likely to be regretful and dissatisfied, possibly because of higher expectation of an ‘innovative procedure.”Barbash and Glied, NEJM, August 2010; Lowrance et al., Journal of Urology, April 2010; Schroek et al., European Urology, 2008
27 In the U.S., if evidence is insufficient and inconclusive, and costs are high, why are robotic surgery systems being acquired by so many hospitals?
29 Our Fascination with the Technology— Many physicians and patients consider robotic surgery to be superior despite the lack of clinical evidence.Our fascination with technology—robots!!Page 1
30 Robotic Surgery Drivers Despite current lack of strong clinical and cost rationale, patient demand and market competitiveness are driving adoption of this technology.
31 Value Analysis Example Should we adopt a recently approved embolic protection device instead of currently used devices?Literature search—PubMed, Medline, Embase)Two nonrandomized studies, 25 patients, 34 patientsFDA approval via 510(k) process (substantial equivalence)First study reports outcomes with new device are similar to other devices (not specified); second study reports similar debris capture to 3 other devices, but no final patient outcomes measuredConclusion: Insufficient evidence to recommend replacing existing devices with new device.the available studies do not provide sufficient evidence to accurately determine the efficacy and safety of the FiberNet device relative to other embolic protection devices. Therefore, hospitals and other providers should not consider adopting this technology except on a provisional basis with regular reviews of the clinical literature to determine whether new studies support its continued use.
32 Where Does EBTA Fit in Your Hospital? ProductUsersValueAnalysisCommitteeTechnologyAssessmentCommitteeEBTAHTA is a collaborative tool that could be used anywhere within a Value Analysis process and could assist the Value Analysis Teams (VATs) to determine if strong evidence exists within the literature to proceed with a financial and internal business analysis.By using this evidence-based approach to build a case in support of, or to justify the reason that an entity should not move forward with a process change and/or purchase acquisition will only serve to strengthen AVHAP’s mission “…of evaluating healthcare services for clinical quality and cost effectiveness”.FinancePurchasingNew TechnologyCommittee
33 New Medical Technology Acquisition Physician Preference Items EBTA Can Be Applied To:Value AnalysisNew Medical Technology AcquisitionCapital PurchasesStrategic PlanningPhysician Preference ItemsWhenever the impact of a technology or procedure can be predicted by clinical evidence.
34 Integrating Evidence Analysis Add evidence review early in your technology evaluation process.Apply health technology assessment methods depending on technology type.Acknowledge when evidence is lacking and why.Make better new technology and supply chain decisions!
36 Total Cost of Ownership Edward Lanthier, MBA, CBETCatholic HealthBuffalo, NY
37 We are Buying new Equipment! But what is it really going to cost us?Equipment Costs go way beyond the quote the vendor gave you.
38 What we will consider Is this the right technology? What is the Purchase price?Are there Installation costs?What are the Service costs?Are there IT considerations?Are there Consumables/Disposables?Is it too much technology…or too little.
39 What we will consider? (con’t) Reagent RentalsWhat about Fee per Case?Are there Disposal costs?Will it be Utilized?Sale of Assets
40 Is it the Right Technology? The Evidence often can not support the Claims“Billboard” items are often more motivated by Marketing than Clinical need.Will you get reimbursement using this technology?
41 What is the Purchase Price? Does anyone Pay List anymore?To GPO or not to GPO?Are there any promotional discounts?Can I use a trade in for additional discounts?Can I get better pricing using my GPO’s contracts?
42 Installation CostsGet the Utility Requirements and Installation package ASAP?Power, Water, Cooling, Drains, Medical Gases, UPS, Conditioned Power.Construction Costs? Environmental concerns, Generic vs Specific, Rigging?
43 Service Costs (BIG Money in Service) Are you Required to Sign a Point of Sale Service Agreement?Are Service Manuals and Service Training Available? Why not Free? At what Cost?Is the Service Software Available? If so at what cost?Are Parts Proprietary?
44 Service OptionsManufacturer Point of Sale Agreements 10% to 20% of List Purchase price per yearThird Party Service Contracts % to 8% of Inventory Value (but what basis – List)In-House4% to 6% of Inventory Value (what basis – List)Hybrids
45 Service Options Service Contracts – Beware the details 98% uptime – A very low barCoverage HoursPower QualityWhat exactly is “Abuse”“Genuine Parts” or “Accepted Vendors”
46 IT ConsiderationsDoes this need to be connected to the Network? Wired/Wireless Add?/Upgrade?Software Licenses? VPN Access for Vendor?Will it work with the EMR? Or does it need middleware?Can you buy “Best in Class” Or will you need to buy “End to End Solution”
47 Consumables/Disposables Disposable ContractsProprietary TechnologyLimiting TechnologyLack of Substitutes
48 Fee per Case Option for fast changing costly technology MRI Trailers Specialty LasersCommon with Endoscopy
49 Reagent Rentals This is the mainstay of Lab Analyzers Can include serviceBased on Estimated workload
50 Disposal Costs Can’t just throw it away PC’s, Computer Monitors, ElectronicsX-Ray rooms – Lead, Oils, X-Ray tubesBatteriesMercury Thermometers, Syphmomanometers
51 Utilization Leading Edge vs Bleeding Edge Tried and True vs End of LifeMore than is needed Does a Community Hospital need a 64 slice CT?May work perfectly – But no longer useful Single slice CT
52 Sale of Assets Can the Retired Equipment be Sold? Harvested for Parts? Donated for Mission?Sold to Recyclers for Scrap Value?
53 Independent Information ECRI Institute – MembershipMD Buyline – SubscriptionHayes, IncTriMedx Consulting
54 Thank you Future Questions: email@example.com