A Little Clarity for Contracting

Insurer and IDNs join forces, pool data, in effort to gauge the effectiveness of medical devices. Collaborative contracting will follow.

The name of a new organization designed to study the effectiveness of medical devices and contract accordingly – jointly owned by an insurer and several healthcare systems – says it all.

“There was a consistent theme that our member/owners wanted,” says Mark West, president, SharedClarity LLC. “They wanted clarity about how medical devices perform, and they wanted independent information to achieve it. And that interest was shared by all of them.”

Headquartered in Phoenix, Ariz., SharedClarity is a for-profit, limited liability corporation, jointly owned by insurer UnitedHealthcare and three healthcare systems – Dignity Health, San Francisco; Advocate Health Care, Oak Brook, Ill.; and Baylor Health Care System, Dallas, Texas. (Participants expect more IDNs to participate in future months.) Their goal is to pool their data and use it to conduct studies about the effectiveness of various medical devices, and then to collaboratively contract for the most effective ones.

Participants expect that SharedClarity will help all involved gain insight from the studies when purchasing high-cost products, including defibrillators, heart valves, knee and hip implants and stents. Executives expect that data will be available for several product categories, such as radiology, imaging, cardiology, cardiac surgical, orthopedic/spinal surgical, vascular surgical, urology and ophthalmology.

Years in the making
SharedClarity has actually been years in the making, says West, who served as vice president of supply chain management for UnitedHealthcare prior to being named president of SharedClarity. Prior to that, he was executive director of supply chain management for the Cleveland Clinic Healthcare System.

During routine business reviews involving UnitedHealthcare and Dignity Health, discussions about patient care were always at the forefront, he says. “The discussion about medical devices was a recurring theme.” Both organizations realized that they lacked independent data about the effectiveness of medical devices. “The more we talked, the more we realized that if we pulled data together, we could create a bucket of data that could be studied and that could provide new and different insights.”

Providers and payers collect loads of patient care data, but their data doesn’t always overlap, points out West. UnitedHealthcare, for example, has “longitudinal” information on about 40 million insured people in the United States, and can track procedures, doctor visits, prescriptions, lab work, physical therapy, etc. But the insurer lacks one piece of information – details on the devices used or implanted on patients. So, while UnitedHealthcare might know that a member received a coronary stent, it wouldn’t know if it was a bare metal stent or a drug-eluting one, nor would it know the manufacturer. “So, from the UnitedHealthcare perspective, that’s a huge blind spot,” says West.

Health systems, on the other hand, know and record what medical devices they implant in their patients. “Their blind spot is [the fact that] they don’t know what happened to the patient [prior to the procedure] or after he or she leaves the building,” he says.

SharedClarity’s goal, then, is to match three buckets of data:

  • Specifics on the devices that are implanted in patients.
  • Clinical information about the procedure or event.
  • Insurance claims information.

“We’ve done some piloting and have been able to triangulate these three very effectively,” says West. “We’re very excited about creating a raw data set that can be studied.”

SharedClarity’s primary goal is to study and produce evidence of the effectiveness of medical devices, resulting in better patient care. But its efforts will have cost implications as well. “If we identify products that lead to better outcomes, fewer readmissions and fewer complications, we can help take costs out for the whole industry,” says West.

In addition, SharedClarity members intend to take the results of the studies and contract as one entity with manufacturers. “We’ll use the studies to guide us on which products have the best clinical outcomes, and then we will jointly develop sourcing strategies,” he says. “Our strategy will be to [pursue] products with the best outcomes, as well as meaningful consolidation and rationalization of medical devices.” Consolidation and rationalization may be goals, but that doesn’t mean SharedClarity will single-mindedly pursue single-source or dual-source contracts in all categories. “What may work well in one product category might not work in another,” he says. Michael Georgulis, Jr., formerly with Premier health alliance, is heading up SharedClarity’s strategic sourcing initiative.

“When we negotiate with device manufacturers, we will negotiate a price tier for our member/owners, then we will negotiate another tier, which we will make available to UnitedHealthcare’s network providers,” says West. This way, UnitedHealthcare has a unique offering to provide its network providers to help them reduce costs.

The SharedClarity medical device studies will be overseen by physicians from each of the participating health systems. Optum Labs will serve as the data and research partner, with consultants from the Lewin Group overseeing the research. Studies are expected to begin later this year.