Hospitals Up the Ante in Device Purchasing Decisions

Article preview from Medtech Insight - December 01, 2010

In many US hospitals, materials, purchasing, and supply chain executives often have the clout to influence thumbs-up or thumbs-down decisions on most new products that enter the building. That is one major reason why medical device manufacturers are waking up to the fact that so-called "me-too" items and minor upgrades to existing products aren't as acceptable to hospitals as they once were. But in the evolving market in materials office supplies, smart manufacturers with a clear path to working alongside materials executives offer products that keep costs down, add to patient safety, and enhance patient care.

Hospitals Up the Ante in Device Purchasing Decisions

By Curt Werner

Make no mistake, in many US hospitals, materials, purchasing, and supply chain executives often have the clout to at least influence thumbs-up or thumbs-down decisions on most new products that enter the building. And in an era where cost containment has taken on added significance, that authority could make the difference in whether a new product will even be considered by a value analysis or clinical committee.

That is one major reason why medical device manufacturers are waking up to the fact that so-called "me-too" items and minor upgrades to existing products aren't as acceptable to hospitals as they once were. But as new rules are written, new opportunities emerge, and in the evolving picture in materials office supplies, smart manufacturers with a clear path to working alongside materials executives offer products that keep costs down, add to patient safety, and enhance patient care. In addition, materials executives are well aware that they walk a fine line when they seek to restrict product choices in high clinical preference areas like cardiology and orthopedics because physicians, not materials managers, usually have final say.

Barriers to Hospital Entry on the Rise

When a manufacturer, particularly a new or small manufacturer, brings what they are convinced is an innovative new product into a hospital for evaluation, several events are set in motion on the hospital level, most of them geared toward sifting out me-too products as well as those with dubious cost-saving appeal or questionable reimbursement potential.

Hospitals differ on the mechanics of their approach to new product introductions and there are few, if any, rules governing a product's entrance. However, one thing is certain:

reducing costs is a key concern. (See Exhibit 1.) As a result, committees, both financial and clinical, stand ready to reject the majority of new items and each committee can find a reason or two why a new item won't make the cut. A reliably skeptical materials manager sits on many of these panels and is more apt to turn thumbs down than up.

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