Transparent purchasing could improve quality
In a joint letter sent to President Obama and House and Senate leaders, the Premier healthcare alliance and GYNHA Ventures Inc., the Greater New York Hospital Association's supply chain enterprise that includes group purchasing organizations (GPOs), said that hospitals could improve health care quality and achieve cumulative savings of $317 billion if certain policies are enacted to create a more competitive and transparent purchasing environment. The savings are based on an analysis conducted by the two groups and projected over 10 years, to be fully realized by 2019.
"Through our work, we have learned firsthand that sizable savings can be achieved without compromising patient care," said Susan DeVore, Premier's incoming president and CEO," in a prepared statement. "These savings will serve as a down-payment to help our nation pay for comprehensive health care reforms that improve quality, affordability and access to care."
"Quite simply, we do not believe that healthcare supply costs need to increase," added GNYHA Ventures President Lee Perlman. "Through sound policy and a commitment to transparent purchasing practices, group purchasing organizations can contribute significantly to slowing the growth of healthcare spending."
Specifically, savings opportunities identified by Premier and GNYHA Ventures include:
- Improved alignment between physicians and hospitals — Allowing shared savings programs would align hospital and physician financial incentives to achieve greater consistency and standardization of medical products, which would improve the quality of care and provide more value to health care purchasers. If properly structured, 2%-4% a year of the approximately $57 billion that is spent annually on physician preference items, such as cardiovascular, orthopedics, spine, intraocular, ophthalmic, ear, and other devices, could be saved through improved physician and hospital alignment, yielding 10-year cumulative savings of $68-$128 billion.
- Removal of price confidentiality contracts — Publicly disclosed prices would provide hospitals with the necessary information to engage with physicians in making informed, evidence-based decisions, while tracking outcomes to ensure quality of care. The power of this type of collaboration is evident in the $36 billion in annual savings achieved through hospitals and clinicians working with GPOs to aggregate supply purchasing and improve systems and processes that maximize efficiency, labor, and expenses.
- Implementation of unique device identification — The creation of a national unique device identification (UDI) system is a large, critical piece to fully recognizing savings and improving patient safety. According to a recently updated Efficient Consumer Response study entitled "Improving the Efficiency of the Healthcare Supply Chain," $16 billion in annual savings are projected from the adoption of universal product numbers and the identification of standards for electronic data interchange and bar coding.
- Comparative effectiveness research — Comparative effectiveness research will lay the foundation to produce information that will help health care providers and patients evaluate medical innovations and determine which represent added value, which fail to offer enhancements to current choices, and which treatments work for some patients and not for others.
- Transparency in payments to physicians by manufacturers — Requiring manufacturers of drugs, devices, and medical supplies to publicly report financial relationships with physicians would help expose payments that could create conflicts of interest.
- FDA evidence-based oversight of reprocessing — The FDA currently provides oversight and regulates the reprocessing of single-use devices (SUDs). Despite FDA regulation, many hospitals do not reprocess SUDs because of the single-use label. The FDA could require manufacturers to show evidence that a medical device is unable to reused, including studies that indicate reuse would render the device unsafe.
- Allowing follow-on biologics — Granting manufacturers of biologic products a set number of years of market exclusivity, similar to one that makers of traditional drugs already have. The Congressional Budget Office estimates that would produce a savings of at least $5.9 billion ($6.6 billion if increased tax revenues are included) over 10 years.
Sebelius challenges hospitals to fight HAIs
At a speech before the United Nurses of America's 12th National Nurses Congress, Health and Human Services (HHS) Secretary Kathleen Sebelius discussed two new HHS reports on the quality of health care in America and challenged hospitals to work to reduce health care-associated infections (HAIs). Published by the Agency for Healthcare Research and Quality, the annual 2008 National Healthcare Quality Report and 2008 National Healthcare Disparities Report indicate that patient safety measures have worsened and that a substantial number of Americans do not receive recommended care. Upon issuing the reports, Sebelius also announced the availability of $50 million in Recovery Act resources to fight HAIs and improve patient safety.
"Today's reports show why we can't wait to enact comprehensive health reform," said Sebelius. "The status quo is unsustainable and we cannot allow millions of Americans to continue to go without the care they need and deserve."
The reports found that:
- 40% of recommended care is not received by patients.
- Only 40% of diabetic patients received three recommended diabetic preventive exams in the past year, and this rate has not improved over time.
- Only half of obese adults and children are given advice to exercise more and eat a healthy diet.
- Seven out of 10 adults with mood, anxiety, or impulse disorders received inadequate treatment or no treatment at all.
- Disparities in health care persist. Minority patients receive disproportionately poor care compared to Caucasian patients. At least 60% of quality measures have not improved for minorities compared to Caucasians in the past six years.
- One in seven hospitalized Medicare patients experience one or more adverse event.
- Patient safety measures have worsened by nearly 1% each year for the past six years.
- Central line-associated blood stream infections strike hundreds of thousands of patients each year.
Sebelius also called on hospitals across America to commit to reduce central line-associated blood stream infections in intensive care units by 75% over the next three years. She challenged hospitals to make use of a proven patient-safety checklist that can significantly and dramatically reduce the rate of these life-threatening infections.
To read the reports, go to: www.ahrq.gov/qual/qrdr08.htm. To read the checklist referenced by Secretary Sebelius, go to: www.ahrq.gov/qual/clichklist.htm.
In a joint letter sent to President Obama and House and Senate leaders, the Premier healthcare alliance and GYNHA Ventures Inc., the Greater New York Hospital Association's supply chain enterprise that includes group purchasing organizations (GPOs), said that hospitals could improve health care quality and achieve cumulative savings of $317 billion if certain policies are enacted to create a more competitive and transparent purchasing environment.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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