If you felt a shudder last week, it may have been the collective medical device industry imagining its future now that UnitedHealth Group and some large health systems have banded together to conduct independent studies on the long-term effectiveness of some medical devices.
The parties have formed a joint venture called SharedClarity, and its stated goal is to improve patient outcomes by determining the best-performing devices in several categories: stents, heart valves, defibrillators, pacemakers, and knee and hip implants. The involved health systems are Dallas-based Baylor Health Care System, San Francisco-based Dignity Health, and Illinois-based Advocate Health Care; together they care for about 7 million patients at more than 850 locations nationwide. UnitedHealth says more systems are in negotiation to join.
Physicians from each of the health systems will oversee the medical device studies, using data from member hospitals and claims information from UnitedHealth Group. The recently announced Optum Labs facility will be the data and research partner for SharedClarity and consultants from the Lewin Group, which is owned by UHG, will oversee the research.
As colleague Paula Wade notes in a recent update to HLI's National MCO Analyzer for UnitedHealth Group, these studies will be used to help select the best devices and for patients and negotiate purchasing agreements with device manufacturers. And they could shake up the market access landscape for the device industry if this leads to bulk purchasing, tiered reimbursement, and other controls that pharmaceutical manufacturers live with on a daily basis.
UnitedHealth is a behemoth, the largest health benefits company in the country; it is known for playing hardball in contract negotiations and has been diversifying into other aspects of the healthcare industry. PBMs, data analytics, IT. Its pharmacy cost controls include prior authorization, supply and duration limits and step therapy.
Its OptumRx division excludes certain new, high-cost branded drugs at launch until they can be evaluated and placed on the formulary or excluded if they lack added clinical value. The company says it will exclude a new drug when more affordable and clinically similar medications are available for the same indication and when OptumRx can leverage the exclusion to get a price break on the other drugs in the class. It would not be surprising if these types of decisions are eventually applied to the medical device industry.
Healthcare reform brought with it increasing pressure on the medical device industry, first from reimbursement declines for devices that especially hit acute-care hospitals, then from the increasing recruitment of physicians and acquisition of physician groups by hospitals. Just as with pharmaceuticals, the latter has the potential of switching control of device choice from physicians to hospitals.
And that is why this new partnership could be a game-changer. The more hospitals and health plans look to curb costs, the more aware manufacturers need to be about the controls being set in place.
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