July 1, 1997

5 Min Read

Medical Device & Diagnostic Industry Magazine
MDDI Article Index

An MD&DI July 1997 Column

The president of Sabratek Corp. (Niles, IL) urges the use of new systems and approaches to respond to changes in the health-care industry.

Recent health-care cost containment has created dramatic changes in health care, leading to paradigm shifts in the whole industry. It is now widely recognized that the delivery of health care is more cost-effective when it is provided outside a traditional hospital environment. Alternate site care (ASC) settings include subacute facilities, outpatient clinics, skilled nursing homes, physician offices, and patient homes. Evidence indicates that care in familiar settings such as the home results not only in lowered costs, but in improved patient outcomes as well.

This paradigm shift has accelerated with the advent of managed care, creating a major growth opportunity for the ASC market. This is substantiated by the fact that patient populations in ASC settings continue to grow. For example, from 1995 to 2000, infusion therapy patients in this market will increase by 50%, the most significant growth coming from pain management, chemotherapy, and antibiotic therapies (see Table I).

For the ASC industry to continue to realize such growth, providers must not only continue to lower costs but also maintain or enhance quality. Technology is one answer as long as it is not technology for technology's sake. In addition, understanding cost structures should allow health-care providers and manufacturers to leverage costs and enhance quality.

It is also clear that telecommunication and computers will play a much greater role in the health-care industry than they have up to this point. Integrating these technologies has essentially created a new industry--telemedicine. This rapidly emerging field combines advances in telecommunications, computer science, and medicine to enable health-care providers to diagnose patients at one location and then treat them at a remote location. The key to continued rapid expansion of telemedicine depends on its user-friendliness and on a smooth transition from traditional practices by both clinicians and patients.

In addition to health-care providers, manufacturers play a key role in adapting to these shifts. Manufacturers must supply products that meet the needs of this new health-care environment. This requires forming partnerships with health-care providers to develop open relationships and to fully understand providers' performance and cost requirements. Manufacturers must translate this information into new designs and maybe even new manufacturing processes to create products that meet health-care providers' needs for high quality at low cost. These requirements entail developing products that are suitable for all health-care environments and that are easy to use by both clinicians and patients. Equipment for telemedicine must easily adapt to traditional health-care practices to ensure the success of this technology.

When practitioners choose devices and software packages for telemedicine, they may be tempted to look only at the up-front acquisition cost. If quality of care is to be ensured, however, the overall cost of providing care to the patient must be the prime consideration for the selection process. An in-depth evaluation of each facility must be performed to adequately assess the overall cost/benefit relationship for selection of a suitable system. In addition, with the increasing seriousness of the conditions of patients in ASC surroundings, a careful assessment of patient needs and comfort will enable providers to use the most flexible and cost-effective system without compromising quality of care.

Such a system should provide a continuum of care for each stage, from confined therapy to ambulatory care, and could add significant value to the ultimate therapeutic outcome. For example, as providers standardize devices, choosing a system that is simple and intuitive to program and use will reduce both nurse and patient training time and increase a user's comfort level. In other words, health-care providers will need access to systems that are flexible enough to move effortlessly among all health-care environments so that they can offer consistently high-quality care at low cost.

Table I. Total ASC infusion therapy patients by therapy type in 1995 and projected for 2000, along with the percentage change.

When choosing devices and systems that fill this need, providers will consider the cost equation. Fixed costs include equipment and inventory for superior asset management, technology obsolescence, durability, and reliability. Variable costs include disposables and labor. Labor costs include the time it will take for training, clinician/patient interaction, pharmacist or technician time for setting up a system, and service and repairs. Indirect costs include infections, missed or delayed therapies, and clinician intervention time.

Another way to look at the cost for such systems is to weigh soft costs versus hard costs. Soft costs include nurse intervention time, nurse travel time, nurse training time, documentation, patient training time, and patient monitoring. Hard costs include primarily equipment and disposables costs. A conservative estimate is that about one-third of total expenditure is for hard costs.

Selecting a suitable hardware and software system can dramatically reduce soft costs. For example, if clinician intervention is required, telemedicine can enable the nurse or physician to provide quality care from a remote site, thereby lowering costs such as travel. A user-friendly remote communication system that can work with several device types and can transmit voice and data simultaneously allows clinicians to communicate with the device and patient without requiring the patient to either stop the therapy or hang up the phone. This powerful combination of medical devices and communications technology enables providers to collect real-time data for outcome studies, as well as reduce intervention time by eliminating unnecessary travel.

With such paradigm shifts taking place in the health-care industry worldwide, developing devices to serve the ASC industry provides an unprecedented opportunity for growth. This industry will need new systems and approaches. This transformation is already taking place in the health-care industry. Today's leading manufacturers may become tomorrow's followers if they don't look at cost and quality using a new paradigm.

Copyright ©1997 Medical Device & Diagnostic Industry

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