Leaving Little to Chance – The Journal of Healthcare Contracting

IDNs try to improve their odds of hitting a winner with new technology

Way back, purchasing agents placed orders and spent much of their time dousing back-order problems. It wasn’t easy, but today, the stakes are even higher. Reimbursement’s tight. Hospitals are under the gun to improve quality of care – even after their patients have been discharged. Competition is fierce.

So, when a vendor presents a new technology as “innovative,” what’s a supply chain director and his or her staff to do?

“Fifteen years ago, from a device perspective; a lot was finance- or cost-driven,” says Nancy Masaschi, vice president, clinical resource management, Advisory Solutions, MedAssets. “Today, given where the healthcare industry is, we are moving away from traditional value analysis to what we call the MEO-type approach – medical/economic outcomes. We’re asking what value will this new technology bring, not just from the financial and reimbursement side, but the clinical side as well. It’s the way hospitals and IDNs are looking at things today.”

New demands
Separating the wheat from the chaff – that is, the truly valuable technology from the not-so-valuable – has always been the supply chain director’s challenge. But cost constraints and new reimbursement policies – e.g., bundled payment, readmission penalties, etc. – have placed new demands on the IDN product evaluation team.

“In the past, the entry process for new medical technology into a hospital was typically a ‘tell,’ with the requestor neither asked to nor required to provide any value proposition, total cost of ownership, quality markers/expectations, or justification secondary to patient outcomes,” says Kelle Laws, RN MN CNOR(E), executive director of medical devices, ROi.

“If a physician wanted something new, typically, all they needed to do was ask for it and it was purchased. Today, it is more common that there is a new technology entry process in place to bring consistency and due diligence to the integrity of the work….The return on the investment of new medical therapies, implants, and capital expenditure are highly reviewed, since cost cutting is a requirement to survive as an organization.”

ROi classifies new technology as either “revolutionary” or “evolutionary,” says Laws. “Revolutionary technology is that which changes a course of medical therapy, probably in multiple ways, so that the patient pathway and desired outcomes are radically changed from the traditional therapy of choice. As such, revolutionary innovations commonly impact clinical, operational and finance components of the supply chain.

“By comparison, an evolutionary product development is more commonly a line item extension to an existing offering, one that provides additional abilities to meet varying patient population needs, but which is unlikely to cause an adjustment to medical therapies or outcomes on a larger scale.”

Needed: Strategic approach
What is needed today is a strategic approach to product evaluation and acquisition, says Masaschi.

“You need to understand the total impact on the delivery of patient care if you bring in a new technology,” she says. How will it fit with the organization’s one-year, five-year, 10-year strategic plan? “Where do you as an organization or service line want to be, and will this device help you in that direction?”

Suppliers will continue to develop new technologies, says Masaschi. The challenge for the provider is to understand the science behind the vendor’s claims. “Does it truly make this device different? Does it affect outcomes or quality of life? Does it decrease infection, reduce length of stay, improve the continuum of care, as more procedures are being done in ambulatory surgery centers and outpatient settings?”

In many cases, finding the answers is difficult, because non-biased studies simply don’t exist. That’s why some organizations are creating their own studies of technologies they want to pursue, says Masaschi.

“It’s one thing to compile information [on a new technology],” says Julie Schulz, MD, MPH, director of clinical content at Procured Health, a MedAssets partner that conducts research and evidence reviews on medical technologies. “It’s also important to have members of the team critically review how the studies were designed. Were they vendor-sponsored? It’s easy to put together a white paper, but you need to make sure you’re examining the full spectrum, including information on competitors’ devices, and not just the information you receive from the vendor.”

Says Laws, “The challenges in evaluation are that if any clinical evidence exists for a new medical technology, it is likely from a supplier-sourced study, which should be scrutinized for process integrity, or from a meta analysis that is predicated on questionable comparables to judge a clinical outcome or justification. Similarly, such clinical evidence is commonly focused on answering a predetermined query that has previously been tested, and which may or may not be relevant to answering your organization’s question of, ‘What difference will this make in our patient care delivery structure?’

To address such challenges, the IDN or hospital organization may elect to enter into a study of its own with the supplier or, even more appropriately, engage an external, third-party source to do so, she says.

First adopter?
At some point, the IDN has to ask itself, “How essential is it for us to be the early adopters of technology?” The answer will influence how they evaluate new technologies.

“The draw to be first to the healthcare market with an alternative patient care solution is always attractive to the progressive hospital or IDN organization,” says Laws. “I would offer only that such attractions be thoughtfully considered for all the downstream impact on the total business proposition.”

“It may not be appropriate for every organization to be an early adopter,” says Schulz. “You have to figure out, ‘How would the adoption of this technology fit in with our broader mission and strategy for the service line?’ If you’re not a research organization, maybe being a follower is most appropriate.”

Impact on patients
Patient care has always been uppermost in the minds of hospital clinicians and administrators. But it has taken on a new urgency today.

Providers must answer this question, says Schulz: Does the evidence support the clinical improvement said to be associated with the technology? “It can’t be just any clinical improvement, but one that yields patient-oriented outcomes, that is, things experienced by the patient – such as mortality, quality of life, pain management.”

Often, vendors will introduce a technology – e.g., a surgical mesh – that has been shown to be stronger in benchtop testing. That’s not good enough, says Schulz. “That testing might not have evaluated the impact of the device on patients. Does it reduce pain or result in other clinical outcomes? You need to be sure there are well-designed studies that demonstrate the device actually moves the needle in terms of patient outcomes.”

Continuum of care
Today, IDN supply chain staff need to evaluate the impact of new technologies not just on the inpatient experience, but the post-acute-care experience as well.

“Hospitals have to think beyond their four walls,” says Schulz. “They have to think about what happens after the patient leaves [the hospital], because they are increasingly responsible for the continuum of care.” A service-line point of view can help.

“We’re working with an organization that is evaluating cardiac rhythm devices,” she says. “We’re helping them understand how the technologies can impact 30-day readmissions. So it’s not just about how they are implanted in the hospital, but about post-acute-care coordination, disease management, and how that technology will impact all of those.”

Interoperability is another consideration with which yesterday’s purchasing agents were not too concerned, says Masaschi. “Back then, equipment and technology weren’t as integrated as they are now.”

How do physicians fit in?
Always a plus, the involvement of physicians in product evaluation and selection is critical today, and more readily available, according to those with whom the Journal of Healthcare Contracting spoke.

“We’re at a point where more and more physicians are employed and have financial incentives aligned with the hospital,” says Schulz. “They are coming to the [product evaluation] committees with an eye toward improving the quality of care across the continuum. They are having conversations with other physicians, and they are looking at how and why a technology fits into the broader clinical picture. Because of that dynamic, value analysis is in a unique position – to truly influence standardization efforts and potentially change the types of devices physicians are using.”

“We are moving to a point where physicians are actually leading these types of conversations or committees,” adds Masaschi. In that environment, supply chain plays a supportive role. “Before, if they were lucky enough to get physicians involved, that was great. But now, physicians are more engaged, and supply chain is there to support and facilitate what they’re doing.”

Dealing with startups
Providers face an especially tough challenge evaluating what looks like revolutionary technology from a young, startup company…perhaps even a physician/inventor.

“Unfortunately, such challenges are the result of name recognition and early product adoption considerations,” says Laws. “In many instances, medical device start-up companies come with some of the same question marks – product quality, production reliability and expectations to meet supply and demand needs, operational efficiencies and capabilities. Such new business offerings come with a hunger and financial ability to sell at reduced margins in order to pick up volume and references from new or early adopters. But the buyer needs to consider the startup’s ability to conduct business with similar operational ease via electronic data interchange, respond to bids electronically, and meet the other day-to-day functionality that reduces cost for the hospital, IDN or GPO segment.”

Networking with other providers can reduce the risk of investing in a technology from a relatively unknown company, or a technology that doesn’t jibe with the IDN’s mission and market position.

“Having a sense of what other, comparable organizations may be doing will help you understand whether you are going to be an early adopter or not,” says Masaschi. “Are they finding [the technology] to be making a difference? Are they glad they made the decision they did? I try to help organizations I work with find a network with which they can do some knowledge-sharing.”

“The network’s insights are important,” adds Schulz. “We can talk about resources to clinically evaluate products, but it doesn’t make sense for every organization to do it on their own. Sharing makes a lot of sense.”

Role of the GPO
Group purchasing organizations can provide assistance to startup companies as well as providers who wish to do business with them.

“Startups may have greater difficulty managing supply and inventory, and if they are a small business, they may also lack the infrastructure to support a national agreement,” says Amy Denny, vice president of supply chain strategy, Premier Inc. “We have a program that supports small businesses in their first contract. It provides the resources and tools to help suppliers gain contract sales with members and build long-term relationships. This includes coaching, mentoring, business educational tools and a stair-stepped approach to contracting. We also help them learn how to work with providers and distributors to achieve local, regional and national distribution capabilities.”

Through its Technology Breakthrough Process, Premier can quickly add a new, breakthrough technology to its portfolio if a health system or supplier notices it in the market, even if the standard bidding cycle is closed, says Denny. The process improves members’ access to new technologies and helps suppliers introduce innovative products, she says. “Basically, the product must represent a significant advance in terms of safety, clinical outcomes, or operational efficiency over what is currently available.”

GPOs can help IDNs gather the evidence to help them determine whether a new technology does indeed offer better quality and lower costs…or not, says Denny. “One enabler is access to integrated data and analytics to better evaluate the use of medical technology and its impact on patient outcomes,” she says. “Another is the ability and willingness of providers to come together to share their outcomes data and expertise to systematically and objectively evaluate the price and usage of the product in the context of maintaining or improving quality patient care.”

Health systems participating in Premier’s Partnership for Advancement of Comparative Effectiveness Review (PACER) collaborative have saved $8.1 million on cardiac stents and surgical mesh over the past two years, Denny says. “Each PACER cohort consists of six to 10 IDNs that engage their physicians, hospital administrators and supply chain leaders to share clinical data on utilization, outcomes and spend. These multidisciplinary teams work together to accelerate more informed decisions on clinical products, expedite savings, reduce unnecessary variation and improve outcomes.

“IDN participants collaborate to examine clinical evidence and outcomes, as well as price and usage data, to determine best practices and unnecessary variation,” says Denny. “From there, they decide which vendors offer the highest-quality, most cost-effective products to contract with. Contract terms are typically between 18 and 36 months.”

In a recent PACER project, seven IDNs came together to identify opportunities to change cochlear implant or bone-anchored hearing aid practices, she continues. After reviewing the clinical evidence and outcomes, the PACER cohort entered into a multi-tiered contract with a single vendor. Savings range from 10 percent to 35 percent, depending on the level of individual IDN commitment.

Doesn’t happen overnight
At Procured Health, clinicians and biomedical engineers conduct research and evidence reviews of new technologies on behalf of their hospital members, says Schulz. “We pull the research together and help hospitals look at it in a structured manner. We make sure they check all the right boxes in terms of their clinical assessments.” Procured Health gathers and disseminates data about how hospitals make their decisions about particular technologies. “They may gain confidence seeing how others make their decisions,” she says.

Even today, some organizations still acquire technologies without fully vetting them and understanding their true value to patient care, says Masaschi. “But when it comes to new technology, you have to put systems and processes in place, and you need to make sure you do your homework from the financial and clinical side.

“It doesn’t happen overnight.”

After the fact: Risk-sharing

Suppose your hospital or IDN has done everything it can to evaluate the value of a new technology. What if you find, after bringing in the technology, that it doesn’t deliver what the vendor said it would?

“There are some progressive drug and device makers out there that see risk-based contracting or value-analysis testing as a strategy for competitive differentiation,” says Amy Denny, vice president of supply chain strategy, Premier Inc. “It would be a substantial ‘win’ for hospitals if suppliers accepted more financial risk for the outcomes of their products/procedures/therapies.”

Says Kelle Laws, RN MN CNOR(E), executive director of medical devices, ROi, “The healthcare provider can and should hold the supplier accountable for the clinical performance at all times and for as long as possible. All ROi supplier contracts are inclusive of such clinical performance requirements. The measurement and coming to terms on how to determine such clinical benefits is more often the challenge at hand. I recommend getting such terms up front before adoption is finalized.”

The startup device firm: Endangered species?

Ashley Wittorf

Medical device makers are eager to bring new technologies to healthcare providers. But they face challenges as they try to do so, including FDA regulatory hurdles, difficulties getting government and private payers to agree to reimburse providers for using those technologies, cost-cutting by providers, and the Medical Device Tax and the Sunshine Act. These hurdles are pronounced for startup companies.

Potential investors are reluctant to infuse capital into early-stage companies whose technologies have yet to be sold – and reimbursed – in the market, says Ashley Wittorf, executive director, AdvaMed Accel. (AdvaMed Accel is the division within the Advanced Medical Technology Association, or AdvaMed, dedicated to the needs of smaller medical technology manufacturers.)

“When you consider the current risk profile of an early-stage company with a truly innovative device, it is not always appealing to investors in today’s marketplace.”

Market demands
The risk begins with the device-maker’s application to the U.S. Food and Drug Administration for clearance to market its technology. While that used to be the industry’s biggest concern, today, device-makers have an even bigger problem – convincing government and private payers that providers should be reimbursed for using their technologies, says Wittorf. If payers say “no,” the new technology could be a non-starter.

Assuming the device-maker has cleared the FDA and convinced payers about reimbursement, it must then face the market – including IDN supply chain executives. And it’s a tough market, given the need for cost control, heightened concerns about patient safety and patient satisfaction, and consolidation of provider groups.

Nobody questions the need for device makers to produce evidence of safety and efficacy, and a solid value proposition for their new technologies, says Wittorf. However, as much as providers want to see such evidence, the fact is, it has to be developed over time. “If we sat on new technology for 15 or 20 years while that value proposition is being fully proven, we’d be on to the next thing. The question is, how do we share some of that risk between the provider side and the device manufacturer, to ensure that these new technologies that can change people’s lives over a long period have an opportunity to get into use?”

Wittorf mentions one AdvaMed Accel member whose technology is used to treat epilepsy patients who are unresponsive to pharmaceutical therapy. “It’s not cheap,” she says. “But if you look at the impact over 20 or 30 years, not only from a quality-of-life standpoint, but how it would impact the healthcare system, it has significant value. But you won’t have all the evidence upfront.”

New laws on the books
As soon as the device maker makes its first sale, it must begin paying the 2.3 percent Medical Device Tax, part of the Affordable Care Act. “It’s hard to pinpoint the exact impact the device tax has had, but it is a contributing factor from a fundraising perspective,” says Wittorf.

The Sunshine Act has brought about its own set of challenges, she continues.

“One of my biggest concerns right now is what’s happening with the relationships between physicians and industry.” Unlike the pharmaceutical industry, with its cadre of chemists and biologists researching new drugs, the medical device industry relies to a large extent on entrepreneurial physicians to help develop new technologies. “The physician is almost like that researcher, coming up with new ideas and identifying solutions,” she says.

But because of the Sunshine Act, some physicians don’t want to work as closely with industry as they have in the past.

A related issue has been the alarm raised about physician-owned distributors, particularly in the spinal segment. PODs that try to make a profit by self-referring patients behave unethically, says Wittorf. “That shouldn’t happen.” But many providers have chosen to interpret the Office of the Inspector General’s 2013 special fraud alert in a very conservative way. “Some are saying, ‘We will not buy from any company that has any type of physician ownership.’ That presents a real challenge to the industry.

“If the public fully understood the role physicians play in advancing technology, there would be a different perception,” she says. “If I were looking at new technology, I’d prefer to speak with a physician who may have been involved in its development.”

These may be challenging times in which to introduce new technologies, but they are filled with opportunity too, says Wittorf. One positive outcome of healthcare reform has been the push to develop medical devices that are patient-centric, that can help get people home sooner and to put more care in their hands. Digital health offers lots of possibilities.

“We’re seeing the industry change so rapidly now, and as patients become more informed and understand their options, they will demand a different type of care, which small companies are looking to provide,” she says.

Beg to differ

Makers of innovative medical devices want you to know one thing: Rising healthcare costs aren’t their fault.

The leading health systems in the country have adopted the latest medical advances and provide technology-intensive care without driving up Medicare spending, according to a study performed on behalf of AdvaMed, the Advanced Medical Technology Association.

Directly measuring the effect of medical technology across the U.S. healthcare system is challenging, according to researchers from Avalere Health LLC in the study, “The Impact of Medical Technology on Medicare Spending.” That’s because there is no standard definition for “innovative medical technology,” and no standard measure of the adoption and use of innovative technologies.

Consequently, the researchers evaluated the Medicare spending per beneficiary (MSPB) score, a Centers for Medicare & Medicaid Services (CMS) measure of hospital efficiency, among the “top technology” hospitals, as identified by U.S. News and World Report.

“Our analysis found that, on average, Medicare spending for the most technology-intense hospitals matched the national rate for all other hospitals,” according to researchers. “However, top technology hospitals have a higher percentage of hospitals with spending rates that are lower than the national average. Approximately 65 percent of top technology hospitals have average MSPB below the national average compared to 56 percent of the non-top technology hospitals. Additionally, when top technology hospitals are compared with a comparable group of larger hospitals having more than 200 beds, Medicare spending for top technology hospitals is significantly lower than other large hospitals.”

Here is a list of the Top 10 technology hospitals with Medicare spending below national average:

UC Davis Medical Center, Sacramento, Calif.
Mayo Clinic Phoenix (Ariz.)
Mayo Clinic Methodist, Rochester, Minn.
Abbott Northwestern Hospital, Minneapolis, Minn.
Mayo Clinic Saint Marys, Rochester, Minn.
Duke University Hospital, Durham, N.C.
Froedtert Hospital and the Medical College of Wisconsin, Milwaukee.
Magee-Womens Hospital of UPMC, Pittsburgh, Pa.
NY-Presbyterian University Hospital of Columbia and Cornell, New York.
Ochsner Medical Center, New Orleans, La.

To access the AdvaMed study, go to http://advamed.org/res.download/993

Kicking the tires

GPOs strive to acquaint their members with new technologies

Group purchasing organizations have been criticized in the past for serving as barriers to new technologies and innovative startup firms. Some GPOs have responded by displaying new technologies at special trade shows.

MedAssets
MedAssets hosted its 2015 Technology and Innovation Expo in November, in Dallas, Texas. More than 70 companies displayed their innovative technologies, says Nancy Masaschi, vice president, clinical resource management, Advisory Solutions, MedAssets. To be invited, each company undergoes a thorough vetting.

MedAssets members/attendees are invited to rate the new offerings, and awards are given to the winners. “The process gives [the technology companies] exposure, and it gives our members exposure to things they should be looking at in the future,” says Masaschi.

Premier
Premier held its 7th annual Innovation Celebration this summer. Volunteers from Premier’s member sourcing committees selected the products and services based on their uniqueness, ability to have an impact on unmet clinical needs and potential to improve patient care. Any supplier, regardless of whether the company is contracted with Premier, can be considered for participation.

2015 Innovation Celebration participants (and their technologies) were:

Flexicare Inc. (DualGuard)
Hologic Inc. (Brevera™ breast biopsy system with CorLumina™ imaging technology)
Incisive Surgical Inc. (INSORB® 30 Absorbable Subcuticular Skin Stapler)
Medtronic (IN.PACT® Admiral® Drug Coated Balloon)
Penumbra Inc. (Apollo System)
ReavillMED (One Needle)
Roche Diagnostics (Cobas 4800 HPV Test)
St. Jude Medical (CardioMEMS™ Heart Failure System)
Toshiba America Medical Systems Inc. (SMI, Superb Micro-vascular imaging)
Toshiba America Medical Systems Inc. (Infinix™ Cardiovascular X-ray Dose Solutions)
Westmed Inc. (Vibralung Acoustical Percussor)

VHA/UHC
VHA/UHC’s 2015 Innovation Technology Expo, held in November in Irving, Texas, featured more than 180 products from more than 140 manufacturers. Among the technologies displayed:

Biological lighting solution: To help patients get better night’s sleep.
Virtual skylight: To improve patients’ feeling of well-being during stay in hospital or treatment facility.
Repositioning system: Designed to protect the health and safety of caregivers and protect dignity of patients.
Digital mobile X-ray: Designed to provide a convenient and non-threatening way to X-ray pediatric patients.

At the Expo, IDN attendees were asked, “In your opinion, what area of clinical care has the most pressing need for healthcare innovation?” Their responses:

Preventing errors, accidents and infection: 46 percent
Alternatives to high-cost treatment protocols: 27 percent
Patient engagement in their own care: 18 percent
Data quality, integration and security: 12 percent
Other: 2 percent

The Long and Winding Road to Interoperability

The federal government and others view electronic-health-records (EHR) interoperability as a necessary step to help providers adopt a “continuum-of-care” approach to patient care.

Interoperability refers to the ability of providers to exchange and process electronic health information without special effort by the user. And while it may be the ideal, it is far from reality, according to the U.S. Government Accounting Office in its September 2015 report, “Electronic Health Records: Nonfederal Efforts to Help Achieve Health Information Interoperability.”

Upside, challenges
The use of interoperable EHR systems could better enable healthcare providers to:

Avoid duplication by allowing them to view results from diagnostic procedures conducted by other providers.
Evaluate test results and treatment outcomes over time, regardless of where the care was delivered.
Share a basic set of patient information with specialists during referrals and receive updated information after the patient’s visit with the specialist.
View complete medication lists to reduce the chance of duplicate therapy, drug interactions, medication abuse, and other adverse drug events.
Identify important information, such as allergies or preexisting conditions, for unfamiliar patients during emergency treatment.

In the GAO report, representatives from 18 non-federal EHR-interoperability initiatives describe five key challenges they face in achieving interoperability:

Insufficiencies in standards. Some standards allow EHR systems to use different formats and terminology when exchanging data. This variability prevents the receiving system from processing the information and integrating it into the patient record.

Variation in state privacy rules. Exchanging health information with providers in other states can be difficult due to variations in privacy rules from state to state.

Accurately matching patients’ health records. Many EHR systems use demographic information, such as a patient’s name and date of birth, to match health records for a given patient held by different providers. But demographic variables do not always yield accurate results because, for example, there could be more than one patient with the same information. In addition, providers may not collect and use the same demographic variables for matching.

Cost. The costs associated with achieving interoperability can be prohibitive for providers, due to the high cost of EHR customization and legal fees.

Need for governance and trust among entities. These governance practices can include organizational policies related to privacy, information security, data use, technical standards, and other issues that affect the exchange of information across organizations.

In addition to these five challenges, GAO writes that in order for providers to take steps toward EHR interoperability, they must see some value in doing so. Policies that tie payment to quality of care rather than number of services provided may help them do so.

To read the GAO report, go to http://gao.gov/assets/680/672952.pdf

Will You Know Quality When You See It?

Case for Quality attempts to improve the way device makers and providers assess the quality of medical devices

Medical technology is getting more complex, and adverse events due to medical devices remain a problem. How can healthcare providers ensure that the technologies they acquire are high-quality and reliable, as well as effective? A group of medical technology community stakeholders – starting with the U.S. Food and Drug Administration and including device manufacturers, payers, providers and patient advocates – have launched an effort to find some answers.

In 2014, the FDA awarded a grant to the non-profit Medical Device Innovation Consortium to launch an ongoing “Case for Quality” initiative, designed to improve the tools and methods used to assess the quality of medical devices.

The roots for Case for Quality lie in an October 2011 report by McKinsey & Company for the FDA titled “Understanding Barriers to Medical Device Quality,” explains Dwight Abouhalkah, program manager, Case for Quality, who is on loan to MDIC from Johnson & Johnson.

“Research showed that the interaction between industry and the FDA is fairly complex, with multiple challenges,” says Abouhalkah. “The Case for Quality was created to facilitate ongoing dialogue that will ultimately benefit patients, providers and the medical technology community.”

Agreed-upon metrics
Convening at scheduled forums through 2015 and 2016, the Case for Quality participants are working to identify quality-related metrics that the entire supply chain can recognize, says Abouhalkah. They intend to answer three key questions:

How can manufacturers improve their design, engineering and manufacturing processes to ensure the reliability, safety and effectiveness of their devices?
Are there early, quality-related signals or red flags that manufacturers can identify and correct in real time?
After a device is marketed, is there adequate monitoring and feedback to alert manufacturers about problems either in product design or their manufacturing processes?

“If, as a medical technology community, we can agree on defined quality metrics that feed information back into the design and manufacturing process, we will reduce problems, reduce costs, and pass on the benefits to the consumer,” says Abouhalkah.

Small, startup companies often lack the time, manpower and resources to identify and implement such quality standards, he points out. But large companies can get bogged down too, given the complexity of new technologies, FDA compliance hurdles, and market pressures to be first to introduce innovative technologies.

It is Abouhalkah’s hope and intention to involve supply chain executives in the Case for Quality. In fact, its analytics group is working with providers to identify product attributes that are most important to them. “They’re working on identifying these metrics, and a longer-term goal is to use them to create a manufacturer rating system, much like a Consumer Reports rating.”

To learn more about Case for Quality, go to http://mdic.org/case-for-quality-cfq/ and the FDA website at www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/MedicalDeviceQualityandCompliance/ucm378185.htm

Supply chain executives who would like to get involved in the Case for Quality may contact Dwight Abouhalkah at dabouhalkah@mdic.org, or visit the MDIC website to register for more information at http://mdic.org/case-for-quality-forum.

Barriers to medical device quality

Some key findings from the October 2011 FDA-sponsored report, “Understanding Barriers to Medical Device Quality”:

Facts about marketed medical devices include:

Over the past 10 to 20 years, the medical device industry has enjoyed tremendous growth in both revenues and the technical complexity of the products it produces.
Serious adverse event reports related to medical device use outpaced industry growth by 8 percent per annum from 2001 to the time the report was published.
Failures in product design and manufacturing process control caused more than half of all product recalls.

Three quality-related challenges facing the industry:

Significant quality upgrades are limited by 1) a lack of information for providers and consumers around comparative quality, i.e., quality differences among competitive products; 2) time-to-market competition; and 3) cost pressures.
The increasing complexity of medical devices and usage environments. Companies report that they have not systematically upgraded their quality infrastructure due to the unclear economics and concerns about regulation.
Compliance with regulations does not ensure quality. Most companies define “quality” as products and services that deliver intended performance, safety, and customer satisfaction; while “compliance” is defined as meeting regulatory requirements, such as the FDA 510(k) or PMA processes.

“Some executives acknowledged that their development process focused on designing complex, innovative products at the expense of long-term reliability or ease of controlled manufacture,” write the authors of the FDA report. “Consequently, such companies have not developed sufficient expertise in reliability engineering and manufacturability.” Medical device companies can learn a lot from the automotive and aerospace industries, which are far more advanced in this area.

“Companies that define quality metrics early in the design stage saw a number of benefits,” added the authors. “For some, quality metrics at the design stage allowed focused resources on the most critical elements downstream in the value chain, especially when managing supplier quality. Others indicated that tracking metrics was a key success factor in driving an effective mindset around quality.”

To view the FDA report, “Understanding Barriers to Medical Device Quality,” go to www.fda.gov/downloads/AboutFDA/CentersOffices/CDRH/CDRHReports/UCM277323.pdf