Technology / Equipment

Applying a systematic approach to new-product assessment

Clearly, we had a problem. New products were entering our health system of four hospitals via several avenues, and we had no single, consistent way of monitoring their entry. Costs and inventory levels were rising. And nurses were concerned about patient safety.

Vendors were using lounges and conference rooms in clinical areas to market their products to individual physicians. In procedural areas, vendors commonly pulled new products out of their bags, and physicians agreed to use them on the spot, putting nurses in a pre­-carious position.

From the vendors’ point-of-view, they were simply going directly to their customers—physicians. But this approach put the vendors, not those responsible for managing costs and ensuring patient safety, in control. And without knowing what was coming into the system where, we couldn’t ensure proper staff education on using new products.

All that changed in 2005 when we designed and implemented review processes for new clinical products.

New processes for new products

We started by setting up required processes for requisitioning all new clinical products from expensive items such as a computed tomography scanner to inexpensive ones such as catheters and dressing supplies. The process begins when a physician or other clinician fills out a new-product request form. The vendor also must fill out a request form.

The request forms go to the oversight committee, which reviews them and sends them to the appropriate support team—such as the cardiology support team or the general surgery support team—or to the strategic technology assessment team. (See New-product review: Step by step.) The support teams have a physician from each hospital, clinicians from each hospital, a service-line representative, and a supply-chain representative. If the oversight committee determines that a strategic assessment is needed, the requests go to the strategic technology assessment team.


Review by a support team

The support team starts by reviewing the two forms together. The team’s review focuses primarily on these questions:

  • Clinical relevance: Is the requested new product an improvement over the product we currently use?
  • Clinical void: Does the new product fill a true clinical need?
  • Cost: Is the cost more or less than the product we currently use?
  • Extra costs: Are additional charges for product improvements worth the cost?
  • Safety: Does the new product offer better safety features to patients or staff?
  • Contract review: Will the request violate any existing contracts?During the review process, the team determines if a new product will replace or complement an existing one. New products that complement existing products go through a more stringent review because they add to the cost of current procedures. Unless a complementary product adds measurable clinical value, approval is unlikely.The physicians on the teams provide valuable input regarding clinical relevance and increased costs for new features. If the physicians don’t see value in a new feature, the team may decide not to introduce the product, or the team physicians may tell the vendor that the product can be introduced but at the current price of the existing product. This approach works because the physicians are making the decision, and vendors see physicians as their true customers. We’ve seen this work well with implanted devices, which tend to continuously evolve with new and improved features.For devices newly approved by the Food and Drug Administration (FDA), our managed-care staff researches the insurers’ medical policies to see if the new device is a covered benefit. We’ve learned that FDA approval of a device doesn’t mean insurers will cover the cost of performing procedures with it. Also, our reimbursement staff reviews the device to determine how it might affect reimbursement. Sometimes, new products have special coding that adversely affects the amount of reimbursement. The next stop is medical staff services to determine if physicians need special privileges to perform the procedure.

    If the support team approves the new product and it will increase the cost of the related procedure, the team seeks approval from the chief nursing officer or chief operations officer (COO).

    Reviews by the strategic technology assessment team

    When a request for new technology requires capital investment, the oversight committee sends it to the strategic technology assessment team, and the requesting physician explains and justifies the request. If the team agrees to investigate, the next step is a full technology assessment: The team researches and reviews these aspects of the request:

    • operational requirements
    • current and future state of the technology
    • project costs
    • reimbursement environment
    • managed care
    • community and market assessment
    • facility requirements
    • pro forma development.

    If the strategic technology assessment team approves the request, the executive team is notified. The executive team notifies the COO committee, which establishes a timeline for implementation and decides whether to use capital from another project or to budget for the technology in the next budget cycle.

    Benefits of the new processes

    Our new processes allow the hospital system, not the vendor, to control the influx of new equipment. This, in turn, improves patient safety and helps control costs and technology creep. In our system today, if a vendor introduces a product without going through channels, we refuse to pay for the product and thank him for his donation. The new system also makes life easier for physicians because vendors can’t pressure them to try every new product that comes along.

    When we implemented the new process, we were concerned that it might slow the introduction of new products. To address this concern, we decided the oversight committee would meet weekly. And guess what? The new process actually decreases the time needed to introduce a new product. We’ve also successfully implemented an expedited review process for one-time use of a product in a particular situation. After this truncated review, the product goes through the same review process as all other products.

    The new system also helps with budget planning because clinical managers can predict the financial impact of new technology and product introductions.

    Ensuring that new products are assessed both clinically and fiscally takes time and care. But the benefits make the efforts worthwhile. Our review processes help us ensure that patients receive safe care and budgets are better controlled. And no one is pulling equipment out of a bag and asking physicians to give it a try.

    Janice Tootle is the former Director of Strategic Technology Assessment at Mount Carmel Health System in Columbus, Ohio.

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