Implantable Medical Devices and Healthcare Affordability : Exposing the Spiderweb

The United States spends more than 17% of its GDP on healthcare, while other developed countries average 8.7% of GDP on healthcare expenditures. All this spending doesn’t equate to value, quality, or performance, however. Among 11 high-income countries, the United States healthcare industry ranked last during the past seven years in four key performance categories: administrative efficiency, access to care, equity, and healthcare outcomes. This book presents the implantable medical device (IMD) supply chain ecosystem as a microcosm of how these challenges of affordability and healthcare outcomes are created and are allowed to fester. The IMD Spiderweb, as the authors call it, is exposed as an example of how a wide range of participants―including physicians, health system CEOs, group purchasing organizations, health insurance companies, and supply chain executives―become ensnared in a web designed to benefit only one player. Health systems in the United States pay as much as six times more for some IMDs than their counterparts do in Europe, and prices for the same IMD model vary even among different U.S. hospitals. While there is a fascination with the latest and greatest device, there is also a shroud around visibility into how these products have performed and are likely to perform in patients. The costs continue to rise not only in healthcare expenditures, but also in death and disability. The IMD Spiderweb is presented as a prime lesson in the challenges in healthcare affordability and outcomes that occur throughout the entire healthcare industry. It is also put forward as an opportunity. The story behind how these challenges arose and continue to be deepened by the current healthcare ecosystem also provides a foundation for solutions. The book also details the affordability challenges in the industry caused by the past and current IMD ecosystem and presents a model for meeting those challenges. Cover 1 Half Title 2 Title Page 4 Copyright Page 5 Contents 6 Foreword 10 Preface 16 Acknowledgments 20 About the Authors 22 Introduction: Challenges in Healthcare Affordability and Outcomes 24 Starting with Where We Are Now 26 The Implantable Medical Device Market as a Symptom 28 References 30 1. Getting Clarity on Where We Are in Healthcare 32 Meet the Participants 38 Medical Device Manufacturing Companies 38 Group Purchasing Organizations (GPOs) 38 Hospitals and Health Systems 39 Health System Supply Chain Executives 39 Physicians 40 Payers 40 Patients 41 Speaking of Patients... 41 Value in the Comfortable Ecosystem 42 References 42 2. Removing Blind Spots: Medical Device Affordability and Transparency 44 The Search for Clarity 47 Paying More for Unproven Technology 48 Creating a New Model Revealed Obstacles and Opportunities 50 A Structure Centered Around Alignment 52 The Pursuit of Removing Barriers to Transparency Continues 56 Summary 58 3. GPOs: The Promise of Collective Buying Power 60 Reducing Costs by Leveraging Purchasing Power—The Promise of GPOs 61 Do GPOs Increase Competition? 65 GPO Transparency 67 Improving Healthcare Processes Comes with a Cost 68 A Changing Healthcare Landscape Brings Diversification to GPOs 68 Moving Deeper into Healthcare Organizations 71 Raising the Specter of Unhooking from GPOs 73 The Opportunity for GPOs in the Medical Device Value Proposition 74 References 77 4. Supply Chain and Physician Considerations in Value Analysis 78 The Value of Supply Chains in Healthcare 79 What Is Value Analysis? 81 Physician Preferences and the Supply Chain: The Challenge of Alignment 83 Alignment vs. Non-Alignment: The Disadvantage for Health Systems 87 Medical Devices and the Concept of Alignment 88 References 91 5. Stepping up to Affordability Challenges 92 The State of Healthcare Expenditures 92 Getting to Significant Reductions—The Earned Price Model 95 Affordability and Transparency Challenges in Medical Devices 98 Challenges with Physician Preference 100 The Key to Getting at Hidden Costs Is Alignment 101 References 102 6. The Spiderweb and Alignment 104 A Healthy Healthcare Supply Chain Starts with Leadership 105 Optimal Alignment in the IMD Supply Chain Ecosystem 107 “Comfort” in the IMD Spiderweb 109 The Content—Physicians 110 The Conflicted—Health Systems and Commercial Payers 112 Health Systems 113 Commercial Payers 117 Lack of Data 118 The Complicit—GPOs and Device Manufacturers 123 Group Purchasing Organizations 123 The GPO Role in Maintaining the Oligopoly 126 References 130 7. The Spider in the Spiderweb 132 A Spotlight on IMD Manufacturers 135 How the Process Works (or Doesn’t) 136 A Permissive IMD Ecosystem Pervades Around the Globe 139 ICIJ’s Eye on Medtronic 142 Acceleration Also Affects Affordability 144 Taming the Spider and Deconstructing the Web 147 References 149 8. Escaping the IMD Spiderweb 150 Assessing Where We Are 151 Estimating the Monetary Opportunity 153 What Are We Up Against? 155 How Does the Model Move Forward? 161 The Big Picture 162 A Call to Action 166 Index 168 Implantable,Medical,Devices;,Healthcare,Affordability;,Medical,Device,Affordability;,Medical,Device,Transparency;,GPOs,-,Group,Purchasing,Organizations;,Supply,Chain,in,Healthcare;,IMD,Affordability,Challenges Implantable Medical Devices,Healthcare Affordability,Medical Device Affordability,Medical Device Transparency,GPOs - Group Purchasing Organizations,Supply Chain in Healthcare,IMD Affordability Challenges