The United States spends more than 17% of its GDP on healthcare, while other developed countries average 8.7% of GDP on healthcare expenditures. All this spending doesn’t equate to value, quality, or performance, however. Among 11 high-income countries, the United States healthcare industry ranked last during the past seven years in four key performance categories: administrative efficiency, access to care, equity, and healthcare outcomes.
This book presents the implantable medical device (IMD) supply chain ecosystem as a microcosm of how these challenges of affordability and healthcare outcomes are created and are allowed to fester. The IMD Spiderweb, as the authors call it, is exposed as an example of how a wide range of participants―including physicians, health system CEOs, group purchasing organizations, health insurance companies, and supply chain executives―become ensnared in a web designed to benefit only one player.
Health systems in the United States pay as much as six times more for some IMDs than their counterparts do in Europe, and prices for the same IMD model vary even among different U.S. hospitals. While there is a fascination with the latest and greatest device, there is also a shroud around visibility into how these products have performed and are likely to perform in patients. The costs continue to rise not only in healthcare expenditures, but also in death and disability.
The IMD Spiderweb is presented as a prime lesson in the challenges in healthcare affordability and outcomes that occur throughout the entire healthcare industry. It is also put forward as an opportunity. The story behind how these challenges arose and continue to be deepened by the current healthcare ecosystem also provides a foundation for solutions.
Table of contents :
About the Authors
Introduction: Challenges in Healthcare Affordability and Outcomes
Starting with Where We Are Now
The Implantable Medical Device Market as a Symptom
1. Getting Clarity on Where We Are in Healthcare
Meet the Participants
Medical Device Manufacturing Companies
Group Purchasing Organizations (GPOs)
Hospitals and Health Systems
Health System Supply Chain Executives
Speaking of Patients…
Value in the Comfortable Ecosystem
2. Removing Blind Spots: Medical Device Affordability and Transparency
The Search for Clarity
Paying More for Unproven Technology
Creating a New Model Revealed Obstacles and Opportunities
A Structure Centered Around Alignment
The Pursuit of Removing Barriers to Transparency Continues
3. GPOs: The Promise of Collective Buying Power
Reducing Costs by Leveraging Purchasing Power—The Promise of GPOs
Do GPOs Increase Competition?
Improving Healthcare Processes Comes with a Cost
A Changing Healthcare Landscape Brings Diversification to GPOs
Moving Deeper into Healthcare Organizations
Raising the Specter of Unhooking from GPOs
The Opportunity for GPOs in the Medical Device Value Proposition
4. Supply Chain and Physician Considerations in Value Analysis
The Value of Supply Chains in Healthcare
What Is Value Analysis?
Physician Preferences and the Supply Chain: The Challenge of Alignment
Alignment vs. Non-Alignment: The Disadvantage for Health Systems
Medical Devices and the Concept of Alignment
5. Stepping up to Affordability Challenges
The State of Healthcare Expenditures
Getting to Significant Reductions—The Earned Price Model
Affordability and Transparency Challenges in Medical Devices
Challenges with Physician Preference
The Key to Getting at Hidden Costs Is Alignment
6. The Spiderweb and Alignment
A Healthy Healthcare Supply Chain Starts with Leadership
Optimal Alignment in the IMD Supply Chain Ecosystem
“Comfort” in the IMD Spiderweb
The Conflicted—Health Systems and Commercial Payers
Lack of Data
The Complicit—GPOs and Device Manufacturers
Group Purchasing Organizations
The GPO Role in Maintaining the Oligopoly
7. The Spider in the Spiderweb
A Spotlight on IMD Manufacturers
How the Process Works (or Doesn’t)
A Permissive IMD Ecosystem Pervades Around the Globe
ICIJ’s Eye on Medtronic
Acceleration Also Affects Affordability
Taming the Spider and Deconstructing the Web
8. Escaping the IMD Spiderweb
Assessing Where We Are
Estimating the Monetary Opportunity
What Are We Up Against?
How Does the Model Move Forward?
The Big Picture
A Call to Action