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7 Reasons Hospitals Buy Technology They Don't Need

 |  By cclark@healthleadersmedia.com  
   January 12, 2012

Why do healthcare chiefs keep buying high-priced gadgets and gizmos that don't improve quality of care? It defies logic. So I asked around to see if anyone could explain this phenomenon.

I was intrigued by last week's report from the independent, non-profit ECRI Institute, which uses the science of evidence to advise clients how to avoid bad purchasing decisions. The document lists 10 technologies, many of which ECRI's experts say hospitals should resist or delay, because data showing they improve care is weak or doesn't exist.

We keep hearing that health providers should be cutting costs, not building and spending on glamour and glitz. The Independent Payment Advisory Board is poised to set draconian reimbursement reductions. And comparative effectiveness findings stemming from the Patient Centered Outcomes Research Institute will distinguish those treatments and devices that add value from those that don't.

Despite all this, every week it seems another hospital announces another CT scanner with more slices, another robot with newer software, a higher-Tesla MRI, or a $200 million cyclotron that shoots protons at cancer, with scant evidence they improve care over what already exists.

I asked several industry experts for their thoughts, including Jennifer Myers, vice president of ECRI's procurement advisory group, SELECT Health Technology Services, and hospital analyst Nate Kaufman. They told me how often they hear of these decisions being made, and what might be going on behind the scenes.

Here are seven reasons why hospitals buy million dollar technologies that lack scientific evidence showing they actually help patients:

1. Doctors demand it. They cry; they whine; they threaten to quit or cause trouble if they don't get it. High-demand/high-volume physicians under consideration for employment say they won't join an organization or practice unless it has a particular new, expensive gadget. This trumps all other reasons why many hospitals and doctors buy technology they don't need.

"Whining is not an unusual event for doctors in the healthcare system," Kaufman says, but in this new environment where hospitals want to recruit doctors, a high-producing physician threatening to leave becomes a bigger issue.

One example of physicians demanding a technology comes with the da Vinci, a robot used primarily for prostate cancer and hysterectomy surgeries, and which number 1,500.

The ECRI report describes "costly robot wars." It says that although proponents tout the da Vinci's improved visualization capabilities, as  well as its precision, and dexterity, at a $3.5 million, five-year cost, ECRI says, "the real unanswered questions are how much value they add, and, more importantly, how and when will they definitively improve patient care and long-term outcomes?"

2. Marketing campaigns to best the competition. C-suite executives or board members think a particular technology may look good on a TV or billboard marketing campaign.  The ads say this hospital or practice really cares (much more so than its competitors) about its patients. It says these doctors are smarter, because they've taken the time to learn this new technology. Myers says that once a competitor buys something big, hospitals become "very reactive, almost like they go into panic mode and they have to buy" the same thing.

One example is proton-beam therapy.  On Jan. 2, an Op-Ed piece in The New York Times slammed the Mayo Clinic for building two football field-sized, $180 million proton beam centers, one in Rochester, MN and another in Phoenix, AZ, and called it "crazy medicine and unsustainable public policy."

The authors, University of Pennsylvania provost Ezekiel J. Emanuel, MD, an oncologist and former White House adviser, and Steven D. Pearson, MD, a general internist, and president of the Institute for Clinical and Economic Review at the Massachusetts General Hospital's Institute for Technology Assessment said the Mayo is competing with a handful of other hospital systems that have them in a "medical arms race" That doesn't improve care.

As they and the ECRI report point out, there is no evidence that proton beam treatments cure cancer or reduce side effects better than other treatments for adult cancers.  Nevertheless, competing hospitals are building two of them 10 minutes apart in my town, San Diego, these will cost more than $200 million apiece.

3. Providing hope. Hospitals and doctors really, sincerely, honestly and truly (it's in their DNA) want to offer patients hope that some new technology can improve their chances of a better diagnoses, better treatment and a faster, better cure, even if the data doesn't yet say so. The same logic explains why many physicians still give patients with influenza a prescription for antibiotics.

4. It's a bargain. The vendor or sales rep is offering the hospital or physician a great deal, an opportunity to be first in their town or state, if the customer installs and markets the technology and advertises it in local media directly to consumers. Myers says physicians and vendors develop close relationships. "Physicians go out to dinner with these sales reps, they (become) their best friends and they go on vacations with them."

Kaufman says, "they might give you the MRI, but you have to pay for maintenance, buy upgrades, and the coils. And, if they give it to the right people, like the pundits at a university and they do research with it, that sells it too."

5. Philanthropic influence. A philanthropist, sometimes a member of the board, saw it elsewhere and thinks there should be one in his or her hometown in a building named accordingly, and may be willing to donate a portion of the expense.

6. Personal interest. The biggest proponent of the device owns a piece of the technology. Myers recalls one case in which ECRI was called in to evaluate a purchase, and "physically test a cold pack on the market that used a powder. In our evaluation, however, we found that it was no better than the traditional cold pack, and it turned out that the physician pushing for this – and it was something as simple as a bag of (frozen) peas – owned part of the company."

7. Economics.  "All these are window dressing for the real reason, which is economics," Kaufman tells me. "[Hospital leaders] believe [this technology] is going to attract more patients or more doctors, or they think in the long run it will reduce costs. That's the reason they're doing it."

Well, whatever the reason—be it pressure from whiny doctors or great deals—buying unnecessary technology also can be prevented. Myers says that by establishing a value analysis committee, including supply chain officials and hospital executives, as well as the doctors who want these technologies for a particular service line are on the panel, everyone considers the needs of the whole hospital, and that encourages a different perspective.

"It's a process that helps filter out the marketing fluff from the vendors," Myers says. "It helps hospitals and administrators have a third party referee that throws up the flag, and says wait a minute, this isn't a technology you should be investing in now."

Chantal Worzala, director of policy development for the American Hospital Association, notes that patients want innovation and technology. But she adds, "Many factors need to be considered when an investment decision is made," and that it's not always "a straight line process. I think folks will be looking at the ECRI report in the future to inform their decisions."

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