The Consequence Of Secret Prices: The Politics Of Physician Preference Items

Lerner, Jeffrey C.; Fox, Daniel M.; Nelson, Todd H.; Reiss, John B

doi:10.1377/hlthaff.27.6.1560

Cited by 24 publications

(22 citation statements)

References 4 publications

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“…Physicians are traditionally considered to be the primary selectors of medical supplies and bear the liabilities associated with the products they use or prescribe, for example, pharmaceuticals, surgical instruments, or medical implants. It is not unusual to find that 60% of a hospital's supply budget is spent on the aptly named physician preference items category (Lerner et al, 2008;Montgomery and Schneller, 2007). Three factors in particular lead to physicians having a high level of discretion in medical supply selection: (1) their professional expertise, (2) the combination of limited price transparency, limited comparative product effectiveness research, and the lack of standardization regarding medical products nomenclature (Lerner et al, 2008;Pauly and Burns, 2008;The Brookings Institute, 2015) and, (3) the high level of service customization required to cater to diverse patient needs (Landry and Beaulieu, 2013).…”

Section: The Physician's Role In Hospital Supply Managementmentioning

confidence: 99%

The impact of physician‐hospital integration on hospital supply management

Abdulsalam

Gopalakrishnan

Maltz

et al. 2018

J of Ops Management

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This study examines how organizational alignment between professionals—who act as surrogate buyers‐‐ and the organizations in which they work, influence the supply management efficiency of the organization. Based on a cross‐sectional sample of hospital data, we estimate random effects regression models to investigate the association between physician‐hospital integration mechanisms and hospital supply efficiency. The results suggest that either professional hierarchy or bureaucratic pressures can improve supply management efficiency. In a sector of the economy characterized by escalating costs and uncertainty, the findings provide potential guidance for professional relationship strategy design to improve sector performance.

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Section: The Physician's Role In Hospital Supply Managementmentioning

confidence: 99%

The impact of physician‐hospital integration on hospital supply management

Abdulsalam

Gopalakrishnan

Maltz

et al. 2018

J of Ops Management

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“…Registries of postoperative outcomes are maintained for some cardiac devices, such as implantable defibrillators, but not for orthopedic and spine surgery components outside of special organizational contexts such as Kaiser Permanente. 16 Legislation was introduced in 2007 to mandate disclosure of medical device prices, generating much policy debate over the virtues and vices of price transparency. Some hospitals have created technology assessment committees analogous to the pharmacy and therapeutics committees maintained by health plans for making coverage decisions.…”

Section: Information On Performance and Pricementioning

confidence: 99%

Value-Based Purchasing For Medical Devices

Robinson

2008

Health Affairs

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The performance of the medical device sector falls short of its remarkable potential because of weaknesses on the demand side of the market, in the way products are assessed, purchased, and used. This paper applies the core principles of value-based purchasing (integrated data on price and performance; alignment of financial incentives; and organizational capability to evaluate alternatives) to the medical device market. Emphasis is placed on the challenges posed by information inadequacies, incentive misalignments, and organizational fragmentation between hospitals and surgeons.

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“…Hospitals are often contractually bound not to disclose pricing of products. In fact, medical device companies have successfully sued to prevent the sharing of pricing information by third parties contracted with hospitals [8]. This nondisclosure clause is estimated to affect 60% of the $112 billion cost of all medical devices [8].…”

Section: Challengesmentioning

confidence: 99%

Value-based Purchasing of Medical Devices

Obremskey¹,

Dail

Jahangir³

2012

Clinical Orthopaedics &Amp; Related Research

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Background Health care in the United States is known for its continued innovation and production of new devices and techniques. While the intention of these devices is to improve the delivery and outcome of patient care, they do not always achieve this goal. As new technologies enter the market, hospitals and physicians must determine which of these new devices to incorporate into practice, and it is important these devices bring value to patient care. We provide a model of a physician-engaged process to decrease cost and increase review of physician preference items. Questions/purposes We describe the challenges, implementation, and outcomes of cost reduction and product stabilization of a value-based process for purchasing medical devices at a major academic medical center. Methods We implemented a physician-driven committee that standardized and utilized evidence-based, clinically sound, and financially responsible methods for introducing or consolidating new supplies, devices, and technology for patient care. This committee worked with institutional finance and administrative leaders to accomplish its goals. Results Utilizing this physician-driven committee, we provided access to new products, standardized some products, decreased costs of physician preference items 11% to 26% across service lines, and achieved savings of greater than $8 million per year. Conclusions The implementation of a facility-based technology assessment committee that critically evaluates new technology can decrease hospital costs on implants and standardize some product lines.

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The Consequence Of Secret Prices: The Politics Of Physician Preference Items

Cited by 24 publications

References 4 publications

The impact of physician‐hospital integration on hospital supply management

The impact of physician‐hospital integration on hospital supply management

Value-Based Purchasing For Medical Devices

Value-based Purchasing of Medical Devices

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