Solving the New-Technology Puzzle

“Innovation Celebration” kicks off Premier Breakthroughs Conference

Regardless of whether full-blown “healthcare reform” ever really occurs, few would dispute the fact that the continuing rise in healthcare costs needs to be addressed, somehow. JHC readers will no doubt continue to be under pressure to hold the line on costs. Payers – especially the federal government – will continue to demand that they’re getting their money’s worth for all the claims they’re paying. And clinicians will continue to fight for their right to practice medicine as they see fit, mindful of the clinical as well as financial ramifications of their decisions.

How does new medical technology fit in all this? Uncomfortably.

As one specialty distributor recently pointed out to JHC, the scary thing about the government’s emphasis on comparative effectiveness research – designed to put numbers, dollars and cents to different medical procedures – is that it will look primarily at retrospective data, that is, at what has already occurred. But it won’t be able to examine the effectiveness of new medical technologies, which lack the track record needed for broad retrospective studies.

And what supply chain executive hasn’t agonized over his or her clinicians’ demands for a new, but relatively untested, medical technology? Will it produce the results the vendor promised? How much will it really cost once it is put into use? And will the clinicians use it, or will it sit under plastic in a closet or hall somewhere, before finally being relegated to the scrap heap – another expensive toy?

GPOs and new technology
Traditionally, GPOs have shied away from contracting for new technology. For one thing, such technology usually flies under their radar screen; in its early stages, such technology is, by definition, used only sparingly, or only in certain pockets of the country. Second, vendors who introduce new technology simply don’t have to sacrifice margin, particularly if they’re the only game in town; it is in the early years of its use that a new technology has the greatest potential to help that vendor recoup R&D costs.

But if a new technology can, indeed, improve patient care and reduce costs, shouldn’t GPOs jump into the fray? At least one GPO – Premier – feels it can, and should. But that’s partly because Premier doesn’t see itself as a traditional GPO.

The Charlotte, N.C.-based alliance kicked off its recent annual Breakthroughs Conference in Anaheim, Calif., with what it called an “Innovation Celebration.” Part trade show, part expo, the evening event showcased 25 new products that could have a big impact on healthcare. Premier Purchasing Partners President Mike Alkire reportedly was thinking of auto shows when he came up with the idea. The “Innovation Celebration” turned into a showcase not only for what’s new, but for what might be coming in future years. And rather than simply viewing new products, clinicians also got a chance to offer manufacturers input on how to improve them.

Innovation criteria
Months before staging the event, Premier assembled a team of members and staff to review applications for participation. The team included clinical field specialists, nurses, pharmacists, medical technologists, supply chain professionals and others. They scored and ranked applications based on a wide range of criteria, including:

  • Date product was introduced into the market.
  • Potential to address and solve patient- and/or healthcare-related opportunities.
  • Ability to measure success.
  • Revolutionary nature of the product or service.
  • Ability of the supplier to articulate the product’s benefits.
  • Evidence to support the review of included documentation.

There was no cost to suppliers to showcase their products at the Innovation Celebration.

Burden of proof
Speaking with JHC after the event, Alkire said that GPOs are a viable outlet for manufacturers of new technologies, and that, given its large clinical database, Premier is the ideal candidate.

“If you have a breakthrough product, a traditional GPO will be able to provide the legwork and access to a market that you might not be able to develop quickly enough,” he said. This is especially true for small companies, which typically lack a large enough field sales force to make an impact on the market.

Over and above that, though, Premier can offer manufacturers what the latter desperately need – clinical data to back up their assertions on a technology’s effectiveness, he continued. “People come to us because they want an independent perspective on whether their products are performing from a clinical perspective,” he said. The reason is that 6.5 million patient records – including information on products used and clinical outcomes – are entered into Premier’s clinical database every year.

Increasingly, manufacturers that conduct business with Premier are asked to state how their products or processes can help Premier members achieve one or more of the five stated goals of Premier’s QUEST program:

  • Save lives by achieving a mortality rate 17 percent less than expected.
  • Safely reduce the cost of care to below the midpoint among participating hospitals.
  • Deliver the most reliable and effective care for each patient.
  • Improve patient safety by preventing incidents of harm in 20 categories, such as healthcare-acquired infections and birth injuries.
  • Increase patient satisfaction by improving the patient care experience.

But simply stating what a new product can do isn’t enough, said Alkire. Manufacturers are being asked to identify the parameters by which Premier can measure – and assign financial value to – the effectiveness of the product or process.

The value equation
From there, manufacturers must be able to convey a clear message to hospitals and IDNs. “If you think you have a product that truly is a breakthrough, we want to hear about it,” said Alkire. “But it’s about how you can articulate that value and what it really means. Manufacturers struggle with putting a value equation in terms of hospitals’ needs.”

Premier can help, with such tools as its value analysis program, which allows hospitals and IDNs to share the results of their value analysis programs with other Premier members. “But to take it back, it’s how do you [the manufacturer] communicate in a way that hospitals see the value associated with your products?” The Innovation Celebration might be a start.

Indeed, the Innovation Celebration was conceived as more than a trade show. “The whole idea was, we could create an environment with 3,000 people or so,” said Alkire. “You’re with some clinicians who have actually used the products, or who understand their value. And you’re talking with other clinicians, who may have a gap in providing care that this product might fill.”

Once the program got underway, another dynamic occurred, he continued. “People said [to the manufacturers], ‘If you could change the product to do this, that would be an opportunity to make an impact on the quality of care.’” Establishing that kind of dialogue throughout the product development cycle “was my favorite part of the event,” he added. At different points in the evening, attendees’ attention was drawn to different technologies. “It was a significantly different twist on just a trade show,” said Alkire.

“What I believe we’ll build on is this: Clinicians will come to these shows and tell the vendors, ‘I want to hear what you’re saying, but I want you to listen to me too, because there are some innovations I think you can create.’”