The Integrated Healthcare Association is planning to implement a statewide collection of comparative data, evaluate purchasing and payment systems and develop a new episode-based payment method for medical device purchasing using a $1.328 million medical technologies grant from the Blue Shield of California Foundation.
According to reports, the grant helps to align physician and hospital interests that are now divided through the practice of direct-to-physician vendor incentives and is part of the foundation's health and technology program strategy to promote evidence-based clinical best practice and technology adoption among California providers.
"By improving the quality and transparency of the data available regarding medical device use, the IHA project will incentivize surgeons, hospitals, health plans and the medical device industry to work collaboratively to enhance the value of specialty care delivery in California and throughout the nation," said Kevin J. Bozic, MD, associate professor in residence at University of California, San Francisco Department of Orthopaedic Surgery and Institute for Health Policy Studies.
IHA recently completed a two-year value assessment and purchasing project in Orange County, also funded by BSCF, to improve data transparency and payment methods for high-value medical devices, including orthopedic and cardiac implants, in the California healthcare system.
"IHA has a successful history of multi-stakeholder collaboration among hospitals, physician organizations and health insurance plans," said Crystal Hayling, president and chief executive officer of BSCF. "The grant is awarded to IHA to evaluate medical technology used in cardiology and orthopedics, providing California hospitals with information that will be used to help improve quality of care, purchasing methods, and payment systems."
Building on the insights from the regional pilot project, the grant allows IHA to:
- aggregate comparative data for benchmarking quality and costs;
- identify best practices strategies for value assessment and a statewide hospital technology collaborative;
- and explore new financial incentives - such as payment methods for hospitals when purchasing devices for manufacturers and for health insurers when reimbursing hospital claims, such as through bundled "episode of care" pricing.
The episode-based payment method will be piloted by at least one health plan with participating hospitals; the experiences will be documented and disseminated to health plans and providers with statewide support from key stakeholders.
Officials say hospitals want benchmarking data and need to adopt best practice strategies to lower medical device costs. Health plans, meanwhile, find it difficult to keep pace with the increasing hospital costs for orthopedic and cardiac implants, especially when their contracts carve out the device.
"Most hospitals simply don't have evidence-based and comparative data they need to make sound medical device purchasing decisions or reasonably negotiate with medical device companies," said James C. Robinson, Kaiser Permanente Distinguished Professor of Health Economics at UC Berkeley. "Surgeons make the device purchasing decision, but costs are paid by the hospital and ultimately passed on to the purchaser and consumer."