But tying the two together isn’t exactly easy
The road leading from favorable patient outcomes to sales is a crooked one. For one thing, it’s difficult to prove the impact of a single medical device on a patient’s health outcome. Today, “process” is just as – if not more – important than “product,” for providers and hence, suppliers.
For another, providers are getting pickier about what they consider to be a true medical innovation. “Progressive commoditization is what all suppliers are feeling,” says Gunter Wessels, PhD, partner, Total Innovation Group Inc.
But there’s one thing Repertoire readers can bet their sales territories on: As never before, medical technology companies need to address the clinical benefits of their technologies as well as their affordability, and in many cases, they need to follow their customers’ lead when doing so.
“Suppliers need to strategically engage with healthcare providers, changing the dynamics of the conversation from selling a product to patient outcomes,” says Michael Schiller, CMRP, senior director, supply chain, Association for Healthcare Resource & Materials Management.
Who’s driving innovation?
The focal point of innovation has shifted to the provider, and from technology to process, says Wessels. Providers are integrating and standardizing care across all care settings. They’re looking for evidence-based guidelines to help them improve quality, outcomes and patient satisfaction. “And they need to do this on a population basis, which calls for maintaining health rather than just fixing illness.”
This means that suppliers have to be more connected to providers than ever before, he says. They have to understand their market, their customers and their customers’ processes.
Process-based innovation can be enabled by technology, says Wessels. “We have to do things smarter, and technology has a role to play. And it’s not all IT; it could be something as simple as a catheter. A product has the ability to distort the care delivery process. The catheter in itself might not matter so much as how it is used. So it turns out that suppliers have to be part of process innovation enabled by technology.”
Although providers and suppliers might like to draw a connection between specific medical technologies and individual patients’ outcomes, doing so is difficult, says Wessels. “Outcomes are susceptible to a tremendous amount of factors other than the device. There is a spectrum of disease, a spectrum of compliance.”
Take a knee replacement, he says. “You have technique-dependent issues, the patient’s BMI, smoking habits, compliance with prehab and rehab, and any potential complications.” Only over a broad population, such as those found in accountable care organizations, can reliable trends be detected.
Michael Schiller
“Emphasis on real-world evidence is one of the many factors that is driving innovation across these segments,” says Schiller. Others factors include consumerism, value-based reimbursements and patient population models.
Data and analytics are playing a larger role in patient care, he continues. “There are a number of leading healthcare organizations doing amazing work within the field of analytics, as they use data to research clinical variation and discover opportunities where care can be standardized. In the end, we are seeing healthcare stakeholders, including physicians, clinicians and supply chain professionals, increasingly utilize data when making procurement decisions for medical devices. This data is being evaluated with the goal of improving patient health, optimizing the patient experience and reducing costs.
“If you think about it, the shift to outcomes-based reimbursement places the patient, and not the supply, at the center,” says Schiller. “CMS alternative payment models (APMs) focus on the entire episode of care, as opposed to a point within that care. This fundamental shift establishes an environment where suppliers need to strategically engage with healthcare providers, changing the dynamics of the conversation from selling a product to patient outcomes.
“The quality and outcomes criteria used in the sourcing process must be evaluated post-conversion,” he says. “There are multiple avenues that should be explored when assessing whether the expected outcomes were actually realized. Both the supplier and the provider need to agree up-front what outcome variables will be measured – understanding that these criteria will vary based on the product type.” Those outcome variables might include reduced length of stay, reduced readmissions and reduced infections rates.
Buyers’ responsibility
Just as suppliers need to strategically engage with healthcare providers, providers need to be strategic as well, says Schiller. “Programs such as CMS’ Comprehensive Care for Joint Replacement (CJR) and the Cardiac Care Bundle for AMI (acute myocardial infarction) and CABG (coronary artery bypass graft) are rapidly changing the reimbursement landscape. As a result, providers and suppliers need to collectively move beyond distrust and view one another as strategic partners in the solution. Beyond strategic engagement, today’s supply chain professional needs to be collaborative, leverage the power of data analytics and evidence-based information, drive data standards adoption and effectively manage a supply chain that has moved beyond the four walls of the acute care setting.
“At the core, providers are being reimbursed differently and on a model that is based upon quality and not quantity. Suppliers will face this same shift, where sourcing decisions are driven more by patient outcomes than price.”
Cost, Quality, Outcomes
The AHRMM Cost, Quality, and Outcomes (CQO) Movement is based on this very approach, says Schiller. “Being strategic means placing the patient at the center and focusing on criteria including patient experience, medical device and product quality, outcomes and efficiency. The question is, how can a supplier best position itself in light of this changing environment?”
AHRMM launched CQO in 2013 to provide training and education to help supply chain professionals and their trading partners make the correlation between cost, quality and outcomes. “The CQO Movement has grown tremendously from its initial focus on educating the supply chain professional within the provider setting, to engaging executive leaders from across every segment of healthcare,” says Schiller. “We are pleased to see how quickly the field embraced and adopted CQO, and the associated operational and patient-focused benefits. Our goal all along has been that one day, CQO becomes synonymous in how supply chain and healthcare professionals conduct their work.”
What remains? Education, education, education, says Schiller. “Identifying leading practices and case studies from across the healthcare continuum; and offering that education through multiple modalities – i.e., webinars, podcasts, webcasts and eLearning courses, to match the learning styles represented by our growing membership.
“While there are many supply chain professionals and healthcare organizations who are well on their way down the CQO path, there are many that are just starting their journey.”