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Insurer, hospitals to study device performance, use data in purchasing decisions


By Jaimy Lee
Posted: April 9, 2013 - 8:00 am ET
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Health insurer UnitedHealthcare and about 50 hospitals say they will conduct research comparing some of the costliest medical devices on the market and then use that data to inform their purchasing decisions as part of a joint venture.

UnitedHealthcare and Dignity Health, a 37-hospital system based in San Francisco, formed SharedClarity last year.

Since then, the Phoenix-based venture has added Baylor Health Care System, which operates 11 hospitals in Texas, and Advocate Healthcare, a 10-hosptial system based in Oak Brook, Ill., as its newest members. There are plans to include up to seven other health systems over the next few months.

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“Our members have a tremendous thirst for getting independent information about how medical devices perform,” said Mark West, SharedClarity's president and a former vice president of supply chain management for UnitedHealthcare.

Implantable medical devices are among a hospital's most expensive supply costs. The prices of these devices are also rising, making them a concern for hospitals and insurers seeking to better manage the costs of pricey procedures such as hip and knee implants.

Many hospitals have implemented cost-cutting strategies for devices and other physician-preference items, and some have formed new ventures that aim to address the costs of these products. Earlier this year, the Cleveland Clinic and VHA announced a joint venture that aims to target the costs of physician preference items.

However, SharedClarity is unique in that the venture was formed between an insurer and a health system. SharedClarity said it will identify the best-performing devices in 30 categories by using clinical data gathered from member hospitals and claims information from UnitedHealthcare, West said. The device categories range from stents and defibrillators to pacemakers and knee and hip implants.

The hospital systems then plan to pool their purchasing volume to negotiate better prices on what they find to be the best-performing devices. In addition, hospitals that are part of UnitedHealthcare's provider networks will have access to those devices at prices negotiated by SharedClarity, although the prices will be less favorable than what the member hospitals receive.

The studies are expected to begin this spring. Richard Roth, Dignity's vice president of strategic innovation, said he expects the first purchasing decisions to be made next fall.

“As Dignity is entering in accountable care organizations and we're doing bundled payments and we're continually demonstrating the tenets of reform, this is going to be a valuable intelligence tool as we're caring for patients,” Roth said.

Both providers and insurers have lamented a lack of independent data about how implants perform, as well as lack of transparency about how they are priced. As more hospitals and insurers are taking on risk-based reimbursement strategies, they say there is a need for better data.

The higher failure rates of metal-on-metal hip implants, which led to revision surgeries and thousands of lawsuits against Johnson & Johnson, would have been caught sooner if data about the performance of those devices had been captured, according to West.

SharedClarity will not only compare types of device and how they perform, it will also research how some devices fare when compared to different types of treatments or therapies.

“Our goal is to shed a light on this and create transparency,” Roth said.


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