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Opportunities and challenges are ahead for the introduction of new technology

Issue: February 2013

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This Orthopedics Today Round Table calls upon five orthopedic surgeons with significant clinical and administrative experience to share their insights on the evaluation of new technology, discuss key strategic steps to incorporate new technology into the practices and provide a glimpse of future opportunities and challenges.

John W. Sperling, MD, MBA
Moderator

John W. Sperling, MD, MBA: What are the most common challenges you see when a surgeon requests to use a new technology or product at your hospital?

William M. Mihalko, MD, PhD: Currently, one of the greatest barriers to using new technology within a hospital system is the fact that frequently there is no evidence that the technology is cost effective. As the bottom line for hospitals continues to get squeezed by government and private insurance carriers, hospitals now scrutinize the use of newer more expensive technology. Surgeons can be prepared to answer these questions prior to submitting a request, which can facilitate the approval process. More times than not with new technology, the cost effectiveness has not been established after FDA approval. In many cases, CMS may not have approved reimbursement until the cost effectiveness has been established as well. This means many hospitals may not approve technology until their financial benefit can be proven.

Scott F.M. Duncan, MD, MPH: At our organization, this depends on the level of expense involved in trialing or adopting the technology. A new technology, such as computer-assisted surgery, requires a much higher level of approval given its initial expense and potential long-term costs. This type of request requires several levels of vetting before the technology will be considered. Then, if it makes through that process, it still must clear the final stages of price negotiation with the vendor.

Other technologies that I would categorize as a “better mouse trap” require approval through a committee that looks at the cost, but also potentially increased revenue (think open vs. endoscopic carpal tunnel releases). Given the increased cost of any new device, in most cases, cannot be passed on to the payer, institutions are understandably cautious to adopt a new technology without some proven benefit, and not just the benefits claimed by the vendors.

William R. Beach, MD: It seems to be dependent on the individual technology. Variables include expense, availability, vendors, vendor representatives and organization. If the new technology is inexpensive and represented by an existing vendor, there is little resistance. If the new technology or device is expensive and “ground breaking,” then there is resistance on two fronts — the hospital and the insurer.

Sperling: What can surgeons do to help facilitate this process?

Kevin J. Bozic, MD, MBA: Rather than playing the passive role of “requestor” and letting administrators make decisions regarding the value of new technologies, physician-leaders should take control of the technology evaluation and adoption process within their hospitals.

At our hospital, we formed a physician-led, evidence-based Healthcare Technology Adoption Program (HTAP). Our HTAP committee is populated by physicians from each of the clinical departments, and also representatives from purchasing, contracting, marketing, finance and perioperative services. Although the non-clinicians on the committee provide valuable insights and information that is considered in our deliberations, only practicing clinicians have voting rights on the committee. Therefore, the clinicians themselves control decisions regarding the adoption and use of new clinical technologies, considering the relative clinical, financial and programmatic merits of the new technology. This process gives physicians greater control and accountability over decisions regarding adoption of new technologies, and accelerates the adoption of promising new clinical technologies while limiting the spread of non value-added technologies.

Jack M. Bert, MD: It is important that staff clearly understand the new technology and techniques for use of new equipment prior to initiating the surgical case itself. This requires a coordinated approach from nursing to materials management to the company representative. The time to understand the nuances of a device or use of a new technology is prior to the first case.

Education is critical for the entire surgical team and administration about the potential impact of acquiring the new technology on the flow of the specific surgical procedure. This will allow a more informed decision about purchasing the new product as well as ensuring proper use in the operating room.

Beach: It is important that prior to the first few cases there are proper discussions with the hospital administrators. This will facilitate proper reimbursement and avoid any surprises in regard to payment. It is also important to engage the insurers about the planned use of the technology and have clear confirmation about payment. It is imperative to collect information that demonstrates patient benefit prior to engaging in these discussions if possible. It is most helpful that the new technology has FDA approval and a CPT code.

Sperling: How has the shift to orthopedic surgeons becoming employees of hospitals impacted the introduction of new technology?

Bozic: Some observers have expressed concern that the shift to hospital employment of orthopedic surgeons will result in more clinical decision making being taken out of the hands of clinicians. However, history has shown that successful hospital-physician partnerships are grounded in strong clinical leadership and mutual respect among clinicians and hospital administrators. Hospitals know that they cannot achieve their goals of providing high-value care to their patients without the support and leadership of their physicians, and top-down strategies to try to force changes in behavior and practice without buy-in and support from clinicians have been unsuccessful. Therefore, by aligning incentives between hospitals and physicians, the trend of hospital-based employment offers physicians the chance to work collaboratively with their hospital employers to develop evidence-based, clinically driven protocols and strategies for the evaluation and use of new clinical technologies.

Sperling: How do you see the process of introducing new technology changing in the future?

Duncan: Any new technology in the future is going to have to show and prove that it is cost-neutral, or if not cost-neutral then it must at least add some quality benefit that translates into an economic benefit (fewer complications, decreased length of stay, etc.). If the technology cannot stand up to a thorough cost-benefit analysis, then institutions will not adopt it.

Bert: With reimbursements decreasing in the future, hospitals are going to have to develop committees with surgeon input to attempt to answer the honest questions as to how the new technology is going to benefit the patient, whether it is cost effective, and finally, that it is it worth the investment. Physicians tend to have tremendous difficulty changing to a different system or technology. They become used to doing a procedure in a particular way. If they have a track record of success with a system, then it is challenging to institute a change. With the increased pressure to reduce costs, administrators are going to be resistant to change as well.

Mihalko: The introduction of new technology into orthopedics and medicine in general may depend upon the changing regulatory framework of health care in the United States. As we all try to unravel the new health care law and get an exact big picture of the impact to our patients and the care we provide, there are also issues pertaining to medical device manufacturers that may decrease their research and development budgets.

The new device tax alone is close to matching the orthopedic device manufacturers’ yearly research/development and education budgets. This may first have an impact on how manufacturers view the cost-benefit of producing new technology. The FDA has been under pressure to revamp the 510(k) process that may also in turn make it more difficult and costly to provide significant improvements upon devices that have a predicate in the market.

There will always be the a market and path for new technology in the United States, but the road map of how the process will work in the future is a question mark due to the previously stated facts concerning more government regulation and the decreasing dollars available for health care year after year.