Bringing Device Makers into the Hospital: Good Business or Ethical Risk?


http://www.medpagetoday.com/hospitalbasedmedicine/generalhospitalpractice/64239

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Medical device powerhouse Medtronic is testing the waters of hospital management, having begun operating a cardiac catheterization lab within a major U.S. hospital earlier this year.

UH Cleveland is the first U.S. facility to outsource its cath lab to a device maker – a new business model that’s met with some success in Europe, reportedly saving hospitals money while expanding Medtronic’s business portfolio.

With hospitals facing pressure to cut costs without sacrificing quality of care, they may be enticed to turn to well-heeled device and drug manufacturers willing to take over certain operations, and perhaps give their own products a boost in the process.

But such arrangements raise questions about how much control hospitals can retain over the operations — which run in their facilities and under their names — and how much freedom physicians will have to use devices from rival manufacturers.

Medtronic as Management

Medtronic launched its Hospital Solutions business in 2013, and its first foray into cath lab management came in 2014, when it acquired the Italian firm NGC Medical. It took over several outsourced catheterization labs in Italy, with the expectation of expanding NGC’s business outside that country.

Ron ten Hoedt, a Medtronic senior vice president and president for Europe, the Middle East, Africa & Canada, once said in a company meeting that Medtronic “needs to switch from a medical device company to a healthcare company,” according to a 2013 PriceWaterhouseCoopers report.

“If we want to be a part of the solution of the delivery of healthcare, then we need to risk-share, and we need to go into this market in a completely different way and with a completely different model,” ten Hoedt said.

Physician Concerns

Can doctors really remain unswayed in the hospital while working side by side with device company employees? Interventionalists said that freedom from pressure to use certain devices will be key to an ethical arrangement.

An anonymous source reported initial fears from UH Cleveland’s catheterization and electrophysiology lab operators that Medtronic would force them to use its durable goods when the deal was first proposed. They said their fears were assuaged, however, when it was clear that UH Cleveland was not going to push them to use Medtronic devices.

Morton Kern, MD, an interventionist and Chief of Medicine at VA Long Beach Health Care System in California, said doctors who work under this new management “will have to use their best judgment for which equipment to select.”

“If the equipment is equivalent, then it shouldn’t make a difference,” he said. “There is the perception that it could be a conflict, but it depends on who’s doing the ordering and the contracting. If it’s Medtronic, it doesn’t sound so kosher.”

“If there is separation between church and state, then there shouldn’t be a conflict of interest,” he added. “I don’t care who runs my lab as long as it works well and the equipment is current. From the doctor’s point of view, it should be invisible.”

Medical device powerhouse Medtronic is testing the waters of hospital management, having begun operating a cardiac catheterization lab within a major U.S. hospital earlier this year.

UH Cleveland is the first U.S. facility to outsource its cath lab to a device maker – a new business model that’s met with some success in Europe, reportedly saving hospitals money while expanding Medtronic’s business portfolio.

With hospitals facing pressure to cut costs without sacrificing quality of care, they may be enticed to turn to well-heeled device and drug manufacturers willing to take over certain operations, and perhaps give their own products a boost in the process.

But such arrangements raise questions about how much control hospitals can retain over the operations — which run in their facilities and under their names — and how much freedom physicians will have to use devices from rival manufacturers.

 

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