|
 Medtronic Plc, Johnson & Johnson and St Jude Medical Inc are among
the first to provide the newer guarantees, some of which offer to
share in the cost of follow-up treatment tied to their heart
devices, company executives told Reuters. Orthopedic implant makers
are exploring such agreements for hip and knee devices.
Hospital officials, however, are seeking even more robust
performance guarantees, including pledges to cover the cost of the
surgery when a device needs to be replaced. Some see the new offers
as a starting point for manufacturers to begin to share more of the
financial risk of procedures.
“It’s a big shift,” said Susan DeVore, chief executive of Premier
Inc, which represents 3,400 hospitals in negotiating supplier
contracts. “Device manufacturers that are responding to that
discussion are the most progressive ones, who see the world is
changing.”
The costs of replacing a medical device largely fall on health
insurers and patients, who sometimes recoup their expenses in court.
In recent years, medical device manufacturers have paid billions of
dollars to settle patient lawsuits over faulty products, from hip
replacements to lead wires that connect defibrillators to the heart.
But hospitals are increasingly on the hook for unsuccessful
procedures as well, with insurers such as the Medicare program for
the elderly cutting reimbursement if patients have to be readmitted.
Device makers would not provide details on how many hospital clients
have signed up for the new guarantees or whether they have had
reason to pay the additional compensation on offer. Hospitals and
device manufacturers are still working out the details in many
cases.
The agreements also do not specify how an insurer or patient might
be compensated for what they have spent to cover a procedure, but
company executives expect those details to be clarified once the
agreements become more common.
Consumers Union’s Safe Patient Project has pushed hip and knee
implant makers to provide warranties directly to patients. Director
Lisa McGiffert questioned the value of the new agreements for not
addressing the individual patient.
“I would feel a lot better if the company would come right out and
say I will pay for the product and the replacement if something goes
wrong,” she said.
Legal experts say the presence of a guarantee on a medical device
does not change the odds of getting sued by an unhappy patient.
“The manufacturer can’t limit its liability toward the patient
through a contract like this,” said Rick Boothman, executive
director of clinical safety and chief risk officer for the
University of Michigan Health System.
SPREADING THE RISK
In the past, medical device warranties would have covered the device
only. For example, a manufacturer might pay for a patient’s new
pacemaker if the battery on the original implant depleted sooner
than expected.
Device makers and hospitals say the new agreements under discussion
go further by tying a guarantee to trackable health outcomes. The
manufacturers, who are struggling with weak demand and falling
prices, are more willing to take on the additional risk to gain an
edge in the marketplace.
[to top of second column] |
"We are really doing this to promote a technology and a benefit that
we know exists, to remove any doubt and to speed up market
acceptance," Medtronic Chief Executive Officer Omar Ishrak said in
an interview. "Risk-sharing in our commercial transactions is going
to be an increasing component going forward."
Medtronic, the world’s largest standalone medical device maker, is
guaranteeing that a hospital’s infection rate for procedures
performed with Tyrx, a mesh sleeve that surrounds a cardiac implant
with antibiotics, will be lower than the infection level for similar
procedures without it.
If the goal is not achieved, Medtronic will cover the cost of
treating the patient’s infection. The company signed its first
agreements including the guarantees this year.
J&J's Biosense Webster unit has introduced risk-sharing for its
Thermocool catheter ablation treatment for atrial fibrillation, a
form of abnormal heart rhythm. Hospitals are given a discount on
Biosense Webster devices used in a repeat procedure if a patient
initially treated with those products returns within a year.
J&J’s Ethicon surgical products business also plans a risk-sharing
program for its Biopatch antimicrobial dressing applied to the skin
to reduce catheter-related infections, spokeswoman Amy Jo Meyer
said.
St. Jude Medical will rebate 45 percent of the price paid for a
Quadra heart rhythm device if revision surgery is needed in the
first year after it is implanted due to problems with the company’s
Quartet lead wire.
HealthTrust Purchasing Group, which represents nearly 1,400
hospitals, expects to finalize some risk-sharing agreements in the
near future. Negotiations with one supplier of spinal fusion
implants, for example, involve a guarantee that if a patient needs a
revision surgery within 90 days for a device-related reason, the
vendor covers the operation as well.
"They are taking a little bit of ownership with us in getting that
operation done and getting that patient successfully through the
recovery,” said Dr. Michael Schlosser, a neurosurgeon and chief
medical officer at HealthTrust. The company is owned by Parallon,
part of No. 1 U.S. hospital operator HCA Holdings Inc.
(Reporting by Susan Kelly in Chicago; Editing by Michele Gershberg,
Sue Horton and Bernard Orr)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
