How Metric-Driven Decisions Can Bring ‘Revolutionary Innovation’ Back to Healthcare

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  • Oct 05, 2016

There’s a perception among physicians that the medical innovation field is stagnating. Major companies horizontally innovate on their groundbreaking devices and investor money is leaving for greener pastures.

But small manufacturers and tech companies are looking to change that. They just need a little help.

Julie Schulz, MD, MPH, and vice president of research and insights at Chicago-based Procured Health, sees the innovation gap firsthand. She says it occurred because hospitals have historically paid for “evolutionary rather than revolutionary” innovation.

“Manufacturers can continue getting away with adding a new bell or whistle every six months because hospitals will continue to pay premiums for that,” she says.

Implantable Cardioverter Defibrillators are an example of one field where hospitals pay premiums for “evolutionary” innovation. Each major vendor has one or two arrhythmia detection algorithms each, and “it’s obscure as to how they differ,” Dr. Schulz says. “They certainly haven’t been studied in comparison to each other, but then year after year hospitals pay more money for the devices with the newest algorithms.”

Hospital and ASC administrators need to start asking metric-driven questions, and stop going with what the physician wants or whatever the vendor brought to their door.

“You wouldn’t buy a car from a used car vendor who contacted you without doing any research on your own into other options,” Dr. Schulz says.

Taking time to narrow a vendor-base down into either the most essential features can not only save a hospital time, but by ditching large vendor and moving towards smaller vendors cost savings can be unveiled.

“We’re absolutely seeing hospitals becoming more comfortable with small vendors,” Dr. Schulz says. “They’re realizing smaller vendors might not be spending as much on their reps or their sales process and they can translate that into lower cost.”

Those small vendors can also develop relationships with small device manufacturers which could create a market entry point for both companies. And as the field continues to transition to value-based care, bundled payments and payment models are going to add fuel to small device manufacturer’s innovation cycle.

As the field continues to shift towards minimally invasive procedures, device companies offering technology aimed at reducing length of stay or improving patient outcomes are going to become invaluable.

To save costs, Dr. Schulz urges administrators to evaluate the clinical evidence and spend analytics when considering devices. It’s “not just which device do I chose, but should I be using this device at all? … Not every patient needs the most expensive, complicated and nuanced device.”

For example, when it comes to antibiotic bone cement, Dr. Schulz says only patients with a high risk of infection or those undergoing a revision procedure need it. The cost of using the specialized cement is five times the cost of regular cement, and it has no additional benefits for many patients.

Dr. Schulz and Procured Health can help health systems implement a data-driven solution to this growing problem. By identifying what’s at fault, and recommending solutions, hospitals can save resources and maximize their existing resources to the highest degree, while also maximizing value for patients.