medical equipment planning ahrmm sepac, november 15, 2011 presentation objective -provide a high-...
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Medical Equipment PlanningAHRMM SEPAC, November 15, 2011
Presentation Objective -Provide a High-Level Overview of Medical Equipment Planning
A Collaborative EffortHayes, Inc.
TriMedxCatholic Health
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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.
TriMedx TriMedx, 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 Health Catholic 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).
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Medical Equipment Acquisition
StrategyBusiness DriversClinical OutcomesPerformance
Impact of Healthcare ReformPhysician PreferenceRecent Trends – Emerging TechnologyInteroperabilityNetwork SecurityTotal Cost of Ownership Budget DevelopmentEquipment FunctionalityOperations IssuesRegulatory Compliance Strategies
Scope of the BuyEquipment WarrantySoftwareTraining
Medical Equipment Planning
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Healthcare Reform Impact
CHANGE IMPROVE QUALITY REDUCE COSTS
Handout provided: Healthcare Reform and The Supply Chain
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Business ModelCapital Equipment
and Technology Planning
Selection and Procurement
ImplementationManagement and Support
End of Life Management
Right TechnologyRight Time
Right CostRight Place
• Alignment with strategic plans• Evidenced Based Clinical Outcomes• Evidenced-Based Equipment
Performance Data
• Current State/Gap Analysis• Efficient capital planning• Replacement scheduling
• Limit the Scope of the Buy• All-inclusive ROI• Competitive capital sourcing
process
• Tracking and management• Metrics• Optimizing asset utilization• Technology redeployment
Comprehensive Lifecycle Management -
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Total Cost of OwnershipTotal Cost of Ownership: CT ScannerPurchase Price - $1.5MTotal Cost of Ownership $3,432,546
Total Cost of Ownership: Breast MRIPurchase Price – $1.5MTotal Cost of Ownership - $3,740,457
Total Cost of Ownership: CyberKnifePurchase Price - $3.2MTotal Cost of Ownership - $8,502,505
Handout: Understanding Total Cost of Ownership in Capital Equipment Planning
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Copyright © 2011 Winifred S. Hayes, Inc.
Evidence-Based Medical Technology Planning
Jennifer E. Van PeltSenior Research Analyst
Senior Hospital Consultant Hayes, Inc.
AHRMM SEPAC,
November 15, 2011
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8Copyright © 2011 Winifred S. Hayes, Inc.
Does This Happen In Your Hospital?
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9Copyright © 2011 Winifred S. Hayes, Inc.
In the “healthcare crisis” and “healthcare reform” debates, two themes that underlie
every other issue appear to be…
QUALITY
COST
Is an expensive new medical technology worth the cost?
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10Copyright © 2011 Winifred S. Hayes, Inc.
0.00.5
1.01.52.0
2.53.03.54.0
4.55.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total health spending($trillion)
Projected U.S. Healthcare Costs
Rising Costs
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11Copyright © 2011 Winifred S. Hayes, Inc.
Are We Getting Our Money’s Worth?
Healthcare Statistics
Country% GDP for Healthcare
(2008) 1
Life Expectancy at Birth (2010
est.) 2
Infant Mortality (Per 1000 Live Births) (2010
est.) 2
Canada 10.4 81.29 yrs 4.99 deaths
France 11.2 81.09 yrs 3.31 deaths
Germany 10.5 79.41 yrs 3.95 deaths
Switzerland 10.7 80.97 yrs 4.12 deaths
U.S. 16.0 78.24 yrs 6.14 deaths
Americans spend more of their economy for healthcare than any other developed country.
1 Source: OECD Health Data – Frequently Requested Data , 20102 Source: CIA – The World Factbook. , 2010
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12Copyright © 2011 Winifred S. Hayes, Inc.
Factors Contributing to Growth in Healthcare Spending Per Capita
Factor %
Aging of the Population 2
Changes in Third-Party Payment 10
Personal Income Growth 11–18
Prices in the Health Care Sector 11–22
Administrative Costs 3–10
Technology-Related Changes in Medical Practice 38–62
Source: Smith, Heffler, and Freeland in CBO (2008)
Why Are Costs Rising?
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13Copyright © 2011 Winifred S. Hayes, Inc.
Evidence-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.
EBTA versus EBM
EBM
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14Copyright © 2011 Winifred S. Hayes, Inc.
Evidence-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.
EBTA versus EBM
EBTA
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15Copyright © 2011 Winifred S. Hayes, Inc.
Systematic Use of the Best Available Evidence to:
• Acquire the best available technology • Avoid acquiring ineffective or unsafe
technology
With the Goals of:
• Improving patient care• Better managing new technology
costs
What Is EBTA?
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16Copyright © 2011 Winifred S. Hayes, Inc.
Higher LowerSTRENGTH OF EVIDENCE
Large, multicenter RCTs Meta-analysis of grouped data Smaller, single-site RCTs
Prospective studies Retrospective studies Studies with historical controls
Case series or reports Consensus/expert opinion
Levels of Evidence
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17Copyright © 2011 Winifred S. Hayes, Inc.
Reality??
Costs Less Docs Want It—Now
Competing Hospital Has ItSales Rep Says It’s the Latest Greatest
Patients Saw It on TV and Want It(Perceived Revenue Generator)
New Technology Acquisition
Trade Journals Say “It’s A Must Have”
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18Copyright © 2011 Winifred S. Hayes, Inc.
• Definition of the Question(s)
• Systematic Literature Search
• Critical Appraisal of the Evidence
• Analysis of the Body of Evidence
• Conclusions about Safety, Efficacy, Clinical Effectiveness
Elements of HTA
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19Copyright © 2011 Winifred S. Hayes, Inc.
New Technology Example: 256-Slice CT
Emergency Department Imaging • Marketed as:
–Significantly faster and better image quality
– Improved imaging of obese patients, pediatric patients, trauma, and complex cardiac and neurologic cases
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20Copyright © 2011 Winifred S. Hayes, Inc.
New Technology Example: 256-Slice CT
Emergency Department Imaging • Published evidence:
–No studies directly comparing with 64-slice CT
–No studies on emergency department imaging and patient outcomes
Is it worth the extra $1 million+?
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21Copyright © 2011 Winifred S. Hayes, Inc.
Robotic Surgery
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22Copyright © 2011 Winifred S. Hayes, Inc.
Clinical Applications• Robotic prostatectomy• Robotic hysterectomy• Robotic cystectomy• Robotic coronary artery bypass • graft (CABG)• Robotic valve repair and replacement• Robotic nephrectomy• Robotic endovascular/vascular surgery• Pediatric surgery (Nissen fundoplication, pyeloplasty,
patent ductus arteriosus closure)• Robotic thyroidectomy• Robotic colorectal surgery
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23Copyright © 2011 Winifred S. Hayes, Inc.
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-up
• Definitive evidence-based conclusions not possible due to lack of randomized comparative studies with laparoscopic equivalents
• In some cases, less blood loss, fewer complications, more precision, overcome technical limitations of conventional surgery
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24Copyright © 2011 Winifred S. Hayes, Inc.
HTA Reveals Other Implications
• Longer operative times for certain procedures (e.g., artery harvesting)
• Substantial training requirements for surgeons• High acquisition cost , > $1 million• Renovation of OR suite may be required• Longer preprocedure set-up times• Expensive accessories, annual maintenance,
consumables
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25Copyright © 2011 Winifred S. Hayes, Inc.
• 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
In the U.S., Changing Clinical Practice…
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26Copyright © 2011 Winifred S. Hayes, Inc.
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
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27Copyright © 2011 Winifred S. Hayes, Inc.
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?
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It’s All in the Advertising. . .
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Our Fascination with the Technology—
Many physicians and patients consider robotic surgery to be superior despite the lack of clinical evidence.
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30Copyright © 2011 Winifred S. Hayes, Inc.
Robotic Surgery DriversDespite current lack of strong clinical and cost rationale,
patient demand and market competitiveness are driving adoption of this technology.
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31Copyright © 2011 Winifred S. Hayes, Inc.
Value Analysis Example
• Literature search—PubMed, Medline, Embase)– Two nonrandomized studies, 25 patients, 34 patients– FDA 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 measured
• Conclusion: Insufficient evidence to recommend replacing existing devices with new device.
Should we adopt a recently approved embolic protection device instead of
currently used devices?
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32Copyright © 2011 Winifred S. Hayes, Inc.
Product Users
Finance
EBTA
Purchasing
Where Does EBTA Fit in Your Hospital?
Value AnalysisCommittee
Technology AssessmentCommittee
New TechnologyCommittee
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33Copyright © 2011 Winifred S. Hayes, Inc.
Value AnalysisNew Medical Technology Acquisition
Capital PurchasesStrategic Planning
Physician Preference Items
Whenever the impact of a technology or procedure can be predicted by
clinical evidence.
EBTA Can Be Applied To:
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34Copyright © 2011 Winifred S. Hayes, Inc.
Integrating Evidence Analysis
Add evidence review early in your technology evaluation process.
Apply health technology assessment methods depending on technology type.
Make better new technology and supply chain decisions!
Acknowledge when evidence is lacking and why.
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Catholic Health
Medical Equipment Planning The Reality
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Total Cost of Ownership
Edward Lanthier, MBA, CBETCatholic Health
Buffalo, NY
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We are Buying new Equipment!
But what is it really going to cost us?
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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?
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What we will consider? (con’t)
Reagent Rentals What about Fee per Case? Are there Disposal costs? Will it be Utilized? Sale of Assets
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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?
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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?
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Installation Costs
Get the Utility Requirements and Installation package ASAP?
Power, Water, Cooling, Drains, Medical Gases, UPS, Conditioned Power.
Construction Costs? Environmental concerns, Generic vs Specific, Rigging?
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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?
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Service Options
Manufacturer Point of Sale Agreements 10% to 20% of List Purchase price per year
Third Party Service Contracts 6% to 8% of Inventory Value (but what basis – List)
In-House 4% to 6% of Inventory Value (what basis – List)
Hybrids
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Service Options
Service Contracts – Beware the details
98% uptime – A very low bar Coverage Hours Power Quality What exactly is “Abuse” “Genuine Parts” or “Accepted
Vendors”
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IT Considerations
Does 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”
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Consumables/Disposables
Disposable Contracts Proprietary Technology Limiting Technology Lack of Substitutes
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Fee per Case
Option for fast changing costly technology
MRI Trailers Specialty Lasers Common with Endoscopy
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Reagent Rentals
This is the mainstay of Lab Analyzers
Can include service Based on Estimated workload
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Disposal Costs
Can’t just throw it away PC’s, Computer Monitors, Electronics X-Ray rooms – Lead, Oils, X-Ray
tubes Batteries Mercury Thermometers,
Syphmomanometers
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Utilization
Leading Edge vs Bleeding Edge Tried and True vs End of Life More than is needed
Does a Community Hospital need a 64 slice CT?
May work perfectly – But no longer useful Single slice CT
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Sale of Assets
Can the Retired Equipment be Sold? Harvested for Parts? Donated for Mission? Sold to Recyclers for Scrap Value?
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Independent Information
ECRI Institute – Membership MD Buyline – Subscription Hayes, Inc TriMedx Consulting
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Thank youFuture Questions: [email protected] [email protected] [email protected]