Healthcare Technology: Physician Collaboration in Reducing the Surgical Cost

Abstract

Background

The increasing cost of providing health care is a national concern. Healthcare spending related to providing hospital care is one of the primary drivers of healthcare spending in the United States. Adoption of advanced medical technologies accounts for the largest percentage of growth in healthcare spending in the United States when compared with other developed countries. Within the specialty of orthopaedic surgery, a variety of implants can result in similar outcomes for patients in several areas of clinical care. However, surgeons often do not know the cost of implants used in a specific procedure or how the use of an implant or technology affects the overall cost of the episode of care.

Questions/purposes

The purposes of this study were (1) to describe physician-led processes for introduction of new surgical products and technologies; and (2) to inform physicians of potential cost savings of physician-led product contract negotiations and approval of new technology.

Methods

We performed a detailed review of the steps taken by two centers that have implemented surgeon-led programs to demonstrate responsibility in technology acquisition and product procurement decision-making.

Results

Each program has developed a physician peer review process in technology and new product acquisition that has resulted in a substantial reduction in spending for the respective hospitals in regard to surgical implants. Implant costs have decreased between 3% and 38% using different negotiating strategies. At the same time, new product requests by physicians have been approved in greater than 90% of instances.

Conclusions

Hospitals need physicians to be engaged and informed in discussions concerning current and new technology and products. Surgeons can provide leadership for these efforts to reduce the cost of high-quality care.

Appendices

Appendix 1

Medical Economic Outcomes Committee (MEOC)

COMMITTEE CHARTER

March 2012

Mission and Vision: A clinician driven process that standardizes and utilizes evidence-based, clinically sound, financially responsible methodologies for introduction or consolidation of new supplies, devices and technology within Vanderbilt University Medical Center to provide the highest quality medical care.

Description: MEOC Committees will be comprised of subspecialty representatives who will be responsible for evaluating new product and device requests from within their peer group, or by request from the MEOC Executive Committee, as well as addressing identified opportunities in standardization, utilization or pricing obtained through internal/external analysis and benchmarking.

MEOC Committee Composition:

• *Executive Medical Director

• *Physician/Clinician Co-Chairs

• *Physician/Physician Members, Subspecialties

• *Supply Chain Officer

• *Administrative Director, Supply Chain

• *Clinical Administrator of Service Line

• *Medical Sourcing Officer

• *Financial Liaison

• Supply Chain Analytics

• *Clinicians (ad hoc)

• *Voting Members

Tenure: Physicians serve 2 year terms (Rotation Process TBD). Non-physician members have no term limits.

Compensation: Participation will be on a volunteer level/designee basis.

Process: The MEOC Committees will evaluate new product/device/technology requests utilizing internal and external benchmark data as it relates to outcomes, quality and financial impact. Elements considered are to include but not limited to: evidenced based medicine reporting clinical outcomes, existence of like technology, existence of a current contract, proposed pricing, impact to overall cost per case, impact to operational expense, impact to revenue, impact to quality indicators such as decreased LOS, decreased mortality/morbidity and impact to the community. In addition, it will be the responsibility of the MEOC Committees to review market introduction of safety alternatives where previously there was not a safety version. The MEOC Committees will have oversight for designation of appropriate trial sites, collection and evaluation of the trial results and approval to implement based on end user feedback. This review will be conducted at least annually and documented in the committee minutes. All records will be retained by the medical sourcing office.

New Product Request for Trial or Permanent Placement: The requesting physician/clinician will complete the New Product Request Form available through the MEOC website at www.mc.vanderbilt.edu/meoc. The request will then be routed for approval to the Department Chair and the Administrative Director or Director having budgetary responsibility, thereby designating approval to proceed with the request. Requests will not be processed without this a acknowledgment.

Trials requests for products that are uncomplicated, have no conflict and are at no cost can be approved without going through a formal MEOC presentation. Requests for Trials that conflict with existing contracts, have a cost or have significant questions regarding the proposed use of the product/technology will need to be presented and requested through MEOC. The request must be submitted at least one month prior to the next committee meeting to be considered for presentation. Product/technology requests will fall into (3) categories:

• 1. Physician preferred items

• 2. Hospital based requests

• 3. Capital Technology

The requesting physician/clinician must be physically present at the meeting to present their request. No designees will be accepted; however additional non-vendors guests are welcome to provide support for the request. Failure to attend will result in the item being removed from the agenda until the physician/clinician resubmits. If the request is for a capital purchase, it should be listed on the current capital request list for approval from the financial liaison of the effective facility to validate available funding. No vendors are to be present nor can one present.

Conflict of Interest / Confidentiality Statement: All committee members and requesting physicians/clinicians must sign and comply with Vanderbilt policy. If a MEOC Committee member has a conflict of interest, he or she must disclose their potential conflict and may be present for discussion but not participate in the vote.

Attendance Requirements: Members are expected to attend all meetings. The Chair will contact members failing to attend meetings. Members failing to attend 50% of the scheduled meetings will be replaced following notification.

Quorum: A quorum is defined as fifty percent plus one for the voting members.

Meetings: MEOC Committees will meet at least monthly unless the volume warrants a decreased frequency.

Reporting Structure: MEOC Committees will report to the MEOC Steering Committee. Each Committee will provide a report of its actions and recommendations in presentation form by a selected member of the Committee to the MEOC Steering Committee.

Decision Making / Authority: MEOC Committees will have the authority to approve trials and evaluations of new products and technologies; give approval or denial for requests with values below $100,000; Send recommendations to the MEOC Steering Committee for a final review, approve or deny requests that meet any of the following criteria:

• 1. New requests for products or technology that value over $100,000.

• 2. New technology approval based on evidence based medicine.

• 3. Effects standardization or compliance with an existing contract.

• 4. Impacts operational expense by >20% on a cost per case basis.

• 5. New technology requires physician re-credentialing or has cross-departmental impact

Cost is not the sole consideration: the new technology may increase overall operational expense or decrease revenue, but has what is believed to be a significant clinical, marketing, research or community benefit.

MEOC Committees will have the ability to approve, deny or suggest a clinical evaluation of a new product/device if the following criteria are met:

• 1. Outcome data supports or refutes the superiority of propose product (when comparable product is currently being used).

• 2. It has no impact to an existing contract.

• 3. There is no comparable technology on the market.

• 4. There is funding available within the department to purchase.

Appeal Process: Physicians/clinicians wishing to appeal a decision of the MEOC Committees must submit a detailed communication describing the reason for the appeal along with supportive literature and/or data to the MEOC Steering Committee. The MEOC Steering Committee, or designated member(s), will review these materials and determine if the appeal is based on new and/or previously excluded information. A decision to entertain the appeal will only be granted to those who have submitted new and/or previously excluded information.

• 1. If the MEOC Steering Committee denies appeal, the request for new product is terminated.

• 2. If the MEOC Steering Committee is in favor of appeal, the request is forwarded back to the MEOC Committee for reconsideration.

Review of the Charter: The charter will be reviewed annually at the last meeting of the calendar year and as changes occur that would affect the operation of the Committees.

Appendix 2