Modern health care depends on technology.
To help health care organizations investigate specific technologies, ECRI developed another database to provide a description of the technology and its applications, a perspective on other technologies used for similar purposes, and information on the implications of using it. This database gives an overview on a variety of technologies on a service-specific basis (i.e., diagnostic cardiology, therapeutic cardiology, oncology).
All of the information in the reports is traceable to its source. The program provides payers and providers with the answers to such questions as:
* Is the technology intrinsically safe?
* Is the technology necessary?
* Is there evidence that it reduces costs by
eliminating other technology, by reducing
length of stay, or by using some
* Is there evidence that it might improve
outcomes and patient care?
* Is there evidence that it might work better
than other existing technologies?
* Is there a definition of which specific
patient populations will benefit from it?
* Does the technology seem to provide an
additional benefit that justifies the
increase in cost to individuals or the
health care community?
The database is dynamic; thus assessments can be made to estimate whether a drug, device, or procedure appears to be promising at any point in time as new studies become available. In our rapidly changing environment, payers, providers, and consumers need to have access to the most current information.
Evaluating an organization's existing technologies
Technology assessment looks at technology in concert with the health care organization's mission, goals, and objectives. Technology planning allows health care organizations to set rational, long-term plans for new and replacement technology by considering the existing technology base as well as emerging trends.
There are a number of factors that are likely to affect technology utilization, including the following:
* Decreasing reimbursement for services.
* The growing impact of managed care
and capitated delivery systems, forcing
health care organizations to do more
with less, to be cost-effective and competitive.
* More careful monitoring of physician
and provider use of resources by all participants
in a managed care environment.
* More scrutiny for the appropriateness of
care by payers, including the use of pre-certifications,
care maps, and other measures.
* The development of physician-hospital
organizations and groups and supergroups
These realities will force providers to examine ways to reduce costs by optimizing the capacity of existing technology-based services, rather than purchase more technology. This will likely be followed by drops in utilization of some technology-based services as payers and providers grapple with the effectiveness and appropriateness of diagnostic and therapeutic modalities.
Providers need to change the manner in which technology is used and care is delivered. Reimbursement systems will no longer reward extensive use of technology; rather, health care organizations are being encouraged to provide less care with fewer resources through decreasing reimbursement. Simply put, providers must stop purchasing technology to make money and use it to improve outcomes or reduce costs.
As recently as two years ago, it was acceptable for health care organizations to expand by acquiring additional technological capabilities, such as creating multiple cardiac catheterization laboratories. Today, there are financial disincentives in acquiring such redundant capabilities.
There are alternate ways to increase capacity-by efficient utilization of existing systems: extending hours of operation, ensuring optimal procedure times, and consolidating technology to avoid duplication and inefficient use. Such changes may represent a radical departure from how physicians currently practice medicine and how patients receive care. To this end, several issues need to be emphasized:
1. Procedural times at health rare organizations
should be benchmarked
with other institutions of similar size
and complexity. Consider how
patients, staff, and information flow in
a particular department, since delays in
any part of the process of delivering
care can be discomforting to the patient
and expensive for the institution.
Quality management techniques will be
useful in such analyses. Primary areas
to review include radiology and invasive
2. The hours of operation of a particular
technology-based service should be
analyzed. Expanding the hours of operation
may result in enough additional
capacity to eliminate the need for more
equipment. It is almost always less
expensive to extend the hours of operation
on existing equipment than to purchase
3. The delivery of services in many discrete
areas results in the duplication
of equipment, that is often underutilized.
The rapid and uncontrolled expansion
of outpatient services to
freestanding facilities resulted in substantial
excesses in equipment, such as
MRI machines and cardiac catheterization
Providers must rethink how expensive technology is used, how services are delivered, and how each component of a process can affect technology needs. These issues will alter physician practices and patient expectations, as well as place demands on technical and supervisory staff to support such changes. As the health care system evolves toward a more efficient managed care environment, overuses and/or abuses of technology must be avoided.
Technology planning produces a multiyear strategy that projects, department by department, the institution's total diminishing resources, increasing choices for new technologies, and high patient and physician expectations for quality care, we must reconcile sometimes conflicting trends and capabilities.
Technology planning can be seen as an extension of an institution's total quality management process to enlist physician involvement and cooperation in aligning physicians with patient need. The health care organization's physicians become more aware of the value (or leek thereof) of specific technologies as a byproduct of the planning process.
Regardless of whether the health care system evolves toward payment by episode of illness, some other form of capitated health care payment, or less aggressive forms of managed care, the following should be considered:
* Health care organizations must strive to
have the technology needed to accommodate
most of the advances in medicine,
and subsequent changes in practice
* All technology requests and purchases
should be evaluated. No decisions
should be taken as a given.
* As payers try to reduce the use of complementary
and competing technologies
for diagnosis and therapy, cost savings
and changes in practice patterns will
emerge. Health care organizations need
to work with their medical staffs to identify
these opportunities and educate
physicians about new guidelines and
* As long-term decisions are made for
new and replacement technology, health
care organizations should examine other
ways of gaining access: purchase, lease,
and even fee-per-use have been used,
and other creative solutions can be considered,
such as capitating medical technology
costs by arranging for a single
annual payment for the equipment and
* Hospitals should frequently evaluate
their mix of services and work with
local physician providers to consolidate
them and avoid costly duplication of
Technology acquisition and management
There are tremendous opportunities for health care organizations to make better decisions by rethinking how technology is selected and managed. Technology acquisition is often distilled down-to personal preference among physicians, who may not even be the primary users. The development of multi-year plans will allow: more control and flexibility over the entire capital acquisition process; larger purchases to be phased in over several years; and more time for bid preparations and negotiations, resulting in better leverage for the purchase price, training, spare parts, service, support, and upgrades.
Technology management issues are often overlooked and offer one of the best ways to reduce costs. For multiple-hospital systems, redeployment of equipment to other departments or facilities as well as bundling and pooling purchases can lead to significant cost savings.
Many health care organizations do not carefully review the costs of equipment support, how well it is done, and whether there are less expensive alternatives, including time and materials, maintenance insurance, in-house support, or the use of third-party service organizations. There are often opportunities to save ten to 30 percent on the maintenance costs of clinical equipment.
Technology assessment, planning, and management are practical ways of reviewing information about technologies and procedures and comparing them to existing approaches and other priorities in the hospital or system. Health care organizations should demand good information on the value and efficacy of technology, competing technologies, cost-effectiveness, and how to educate consumers on technical and clinical realities. Sound technology decision-making is composed of four basic components:
1. Technology assessment: Determine the
need, appropriateness, and value of a
new technology by considering its
impact on quality, outcomes, competing
technology, and costs.
RELATED ARTICLE:Technolgy Over- and Under-Utilization
Cardiac Catheterization Laboratories:
Cardiologists at two large hospitals of a multi-hospital system requested additional cardiac catheterization equipment costing $1.2 million. Cases were extending into the evening and the physicians felt that the hospital could not handle their growing caseload.
Review of the hospitals, caseload, schedule, hours of operation! and physicians, procedure times showed that the existing equipment was not being used to capacity. The perceived need for more equipment was the result of inordinate turnaround times in the cath labs, physician tardiness for scheduled cases, wide variations in procedure times, and limited hours of operation (7 a.m. to 3 p.m.).
Meetings with cardiologists, cath lab staff, and management improved turnaround time, scheduling policies, and hours of operation. Clinical and management staff agreed on volume criteria that would indicate the need for additional equipment.
Many hospitals continue to expand their telemetry units without examining whether existing equipment is being used appropriately. Physician use varies widely. Hospitals that do not have adequate and/or well-enforced admission and discharge criteria for telemetry units purchase excessive telemetry capacity at a capital cost of $12,000 per channel. Each channel triggers further costs of training and employing staff to interpret cardiac arrhythmias.
James Cowan, MD, is Chairman, Department of Medicine, St. Luke's Hospital, a tertiary care hospital, Bethlehem, Pa. He is chairman of the hospital's technology assessment committee. David Berkowitz is National Accounts Manager, Varian Oncology Systems, Marietta, Ga. At the time this article was written, Mr. Berkowitz was Vice President of the Health Systems Group at ECRI, a not-for-profit health services research organization concentrating on health care technology, Plymouth Meeting, Pa. The authors may be reached through Dr. Cowan at 801 Ostrum St., Bethlehem, Pa. 18105, 610/954-4642, FAX 610/954-4979. 2. Technology planning value analysis:
Periodically review existing technology
to be sure it is being used properly and is
not being used for new indications or in
new locations that represent new risks or
costs. Such diffusion may reduce the
value of existing technologies. 3. Technology standardization Use technologies
with similar capabilities and
performance. 4. Technology management: Review how
well and cost-effectively technology is
serviced and supported.
For all parties involved in the health care equation, this sets out fundamental challenges to: encourage the appropriate development of new technology; avoid inappropriate diffusion of technology; and align payers, manufacturers, and providers in technology assessment.
It is time for physicians and providers to regain the position as leaders in disseminating good medical knowledge so that payers purchase and patients receive the most effective care. A well-conceived and executed technology assessment, acquisition, and management process substitutes facts for biases, leading to decisions that, upon review, will more apt y meet patient needs and financial goals.
[1.] ECRI. Healthcare Technology Decision Making in the 1990s: A Guide for Healthcare Executives. Plymouth Meeting, Pa: ECRI, 1994.
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|Title Annotation:||part 2; includes related information|
|Date:||May 1, 1996|
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