IHA to assess value of medical devices and improve use
6 June 2008
The Integrated Healthcare Association (IHA) of California has been
awarded a $1.3m medical technologies grant by the Blue Shield of
California Foundation (BCSF) to implement statewide collection of
comparative data, evaluate purchasing and payment systems, and develop a
new episode-based payment method for medical device purchasing.
The grant will help to align physician and hospital interests that
are now divided through the practice of direct-to-physician vendor
incentives, and is part of the foundation's health and technology
programme strategy to promote evidence-based clinical best practice and
technology adoption among California providers.
Medical device purchasing processes have received greater national
attention regarding physician conflicts of interest with medical device
companies. Hospitals want benchmarking data and need to adopt best
practice strategies to lower medical device costs. Health plans also
find it difficult to keep pace with the increasing hospital costs for
orthopaedic and cardiac implants, especially when their contracts carve
out the device.
"By improving the quality and transparency of the data available
regarding medical device use, the IHA project will incentivize surgeons,
hospitals, health plans, and the medical device industry to work
collaboratively to enhance the value of specialty care delivery in
California and throughout the nation," stated Kevin J. Bozic, MD,
Associate Professor in Residence University of California, San Francisco
Department of Orthopaedic Surgery and Institute for Health Policy
Although IHA is better known for its California pay-for-performance
(P4P) program, it recently completed a two-year value assessment and
purchasing project in Orange County, also funded by BSCF, to improve
data transparency and payment methods for high-value medical devices,
including orthopaedic and cardiac implants, in the California healthcare
Crystal Hayling, President and CEO, Blue Shield of California
Foundation commented, "IHA has a successful history of multi-stakeholder
collaboration among hospitals, physician organizations, and health
insurance plans." Hayling added, "The grant is awarded to IHA to
evaluate medical technology used in cardiology and orthopaedics,
providing California hospitals with information that will be used to
help improve quality of care, purchasing methods, and payment systems."
The grant allows IHA to:
- Aggregate comparative data for benchmarking quality and costs;
- Identify best practices strategies for value assessment and a
statewide hospital technology collaborative;
- Explore new financial incentives, potentially including payment
methods for hospitals when purchasing devices for manufacturers and
for health insurers when reimbursing hospital claims, eg, through
bundled "episode of care" pricing.
The episode-based payment method will be piloted by at least one
health plan with participating hospitals, and these experiences will be
documented and disseminated to health plans and providers with statewide
support from key stakeholders.
"Most hospitals simply don't have evidence-based and comparative data
they need to make sound medical device purchasing decisions or
reasonably negotiate with medical device companies," stated James C.
Robinson, PhD, Kaiser Permanente Distinguished Professor of Health
Economics, UC Berkeley; Washington, DC.
"Surgeons make the device purchasing decision, but costs are paid by
the hospital and ultimately passed on to the purchaser and consumer." Dr
Robinson is a member of the board of directors at IHA and chairs the
medical technology project.
With greater focus on value-based purchasing practices and rising
trends in medical device costs and utilization, IHA and the California
Hospital Association recently convened leaders at the "Pursuit of Value
for Medical Devices" conference in Irvine, California. The May 2008
conference brought together representatives from the hospital, medical
device, physician, and insurance sectors to discuss ways to improve
coordination and align incentives among the principal stakeholders in
the technology-intensive cardiac, orthopaedic, and spine care services.