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When Taking the Risk and Investing In New Medical Technology Makes Sense: Understanding the Vetting Process

By Michael Garcia, RN, JD, senior vice president of operations, Houston Methodist Hospital

Michael Garcia, RN, JD
Michael Garcia, RN, JD

One of your top specialists is pushing for a new medical technology that shows great promise for patients but doesn’t yet have the backing of insurers.  What do you do? Healthcare providers frequently face this challenge.

But hospitals shouldn’t shy away from investing in non-reimbursable medical technologies that could make a qualitative difference for patients, as long as they go through a thorough vetting process on the clinical end, working closely with department physicians, and build a solid business case to show a return on investment on the administrative end.

HIFU vs. Standard of Care

In 2015, Houston Methodist, one of the largest medical centers in the US, comprising an academic medical center and six community hospitals, made this kind of decision to invest in HIFU (high intensity focused ultrasound), a medical technology for treating men with prostate conditions that had not just been approved by the US Food & Drug Administration.[1]

While HIFU was new in the U.S. and largely unknown by urologists across the country, it was prevalent and in demand in Europe and parts of Asia. This is the story of how they vetted this new technology, weighing the anticipated benefits for patients with the return on investment for the organization.

For prostate cancer, the standard of care at Houston Methodist was the radical prostatectomy, in which the entire prostate gland is removed. Looking at the number of prostatectomies hospital surgeons performed over the long term, decision-makers wanted to know if HIFU was a feasible alternative for eligible patients.

HIFU uses a probe and ultrasound device to destroy only targeted tissue in the prostate, while allowing men to retain their healthy tissue and nerve bundles that control sexual function and urinary continence. It’s a breakthrough treatment for men who qualify.

The Clinical Vetting Process

Every year Houston Methodist’s physician and executive leaders meet to discuss medical devices and authorize capital expenditures for new technology. Part of the discussion focuses on new procedures and/or new medical technology that may not be FDA approved or reimbursed by insurers yet.

Likewise, specialists pushing for new procedures must convince and win approval from the Medical Center’s physician department chairs.  Each proposal must show how a new procedure will benefit patients, how it differs from competitors and contributes to hospital growth, as well as provide information on whether the FDA pre-market approval or Medicare and insurance reimbursement filing process is underway. They must also report on any medical technologies that have been purchased for their specific department over the last several years.

Other questions under consideration from department chairs and the hospital executive team include: Is the procedure a novel idea or the latest technology of the moment? How does it compare to other procedures and is it a better alternative to what the hospital currently offers? Does it align with Houston Methodist’s mission to lead in medicine? And is there any conflict of interest for the physician requesting the device? Is this a new procedure or technology that is supported by other physicians practicing in the Houston Methodist Hospital system?

In their evaluation, Houston Methodist narrowed their search to EDAP Technomed, the makers of Ablatherm Robotic HIFU.  Physicians reviewed the manufacturer’s training and technical support, follow-up, and marketing material available to market the procedure to referring physicians.

The Business Vetting Process

Once the physician chairs approved the HIFU procedure, Houston Methodist’s business development and finance team went through an extensive vetting process to estimate the potential number of procedures and the breakeven point. If patients have to pay out of pocket for the procedure how many cases would it take to cover direct costs? How many patients, among the greater Houston male population would be suitable for HIFU and have the means to pay for the procedure? And who else was offering HIFU in Houston? (Houston Methodist was the second medical facility in the area to acquire HIFU; the first was a urology practice.)

Through extensive research, the business development team determined the number of cases per year and charges per patient needed to cover the costs of the equipment, the surgeon’s fees, anesthesia fees and hospital admission fees to break even and realize a profit.

After two years Houston Methodist Hospital showed a return on its HIFU investment.  

HIFU was a Smart Bet

Houston Methodist continues to see evidence that validates its decision to invest in HIFU technology as a treatment option for localized prostate cancer:

 

[1] HIFU was FDA cleared for prostate tissue ablation in November 2015.

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