Health care poses a dilemma. Medical progress gives us vast social benefits but now threatens us with a social crisis of unsustainable costs. Clinical technology raises a similar paradox. It unquestionably improves our ability to diagnose and treat disease, yet we seem caught in a whirlwind of escalating costs. We can carry computers in our pockets for a few hundred dollars, but those implantable defibrillators in our chests cost the same as a small car. This is an oversimplification, but it is a striking contrast nonetheless.
Given the cost pressures weighing on all providers, ECRI Institute is not surprised to hear the strained voices of weary health care executives and financial managers who have to spend so much on clinical technology at a time when reimbursement seems headed downward. In fact, clinical technology requests are a constant challenge for health care executives and, in previous articles, we have noted some of the issues leaders face with such technologies as surgical robots and proton beam accelerators.
However, we may be missing something. Perhaps one of the very "things" we often blame for the rising cost of health care is actually one of the "things" to pull us through to a better system. Maybe it is not the information technology revolution that could bend the cost curve, but the clinical technology and the planning process to acquire it that could bend the cost curve in our favor. Trustees can play a key role in working with management on this.
Let's work together to create a virtuous circle of ever-smarter buyers and ever-better medical technology suppliers who then respectively use and produce only the best clinical technologies and who drive each other to deliver health care better, faster and less expensively. Quality increases, cost decreases.
Start with Self-Assessment
Truly effective capital planning creates smarter buyers for clinical technology, which in turn creates opportunities for providers to increase effectiveness, reduce costs, improve patient safety and provide better access to care. Perhaps it is not that we need to spend less but that we need to spend better. How can boards help drive organizations to accomplish truly effective capital planning?
To help your organization become a smarter buyer and thus, a smarter user of clinical technology, a somewhat different mindset must be adopted by everyone, including trustees. Rather than simply reviewing the capital budget once per year or approving a large capital outlay individually, it may be more important to drive your organization to improve its capital planning process. And the key to improving the capital planning process for clinical technology rests upon the answers to four critical questions. In effect, these questions can be thought of as a clinical technology self-assessment for a board or senior management team to consider.
What is the state of our current clinical technology infrastructure compared with that of our peers and with our strategic intent? It is not news that many health care facilities are full of medical technology. It may be news that some of that technology may be out of date and, in some cases, actually unsafe.
About a decade ago, ECRI Institute was asked to develop a clinical technology plan for a major clinical department at a leading university hospital. Given the renown of this organization, we expected to see state-of-the-art, high-quality clinical technology when we toured the department. Instead, we saw old technology everywhere we looked. In stark contrast, the hospital lobby looked spectacular, the cardiology department had great technology and even the operating rooms sparkled. The department we reviewed had not had a new request approved in a decade and it was a major clinical hub in this institution.
To answer the first question, every institution must create a clinical technology scorecard that is kept up-to-date and reviewed annually by the board and the senior executive team. That scorecard should be developed by objective review of all the clinical technology in your organization.
Bottom line: If you run an airline, you had better know the state of your planes.
Do we understand the major clinical technology changes that may cause a seismic shift in our ability to thrive? Clinical technology advances are happening every day, but some are more important than others. Some of those advances could present huge opportunities to improve health care and strengthen your organization; some may weaken your organization if you do not adopt them at the appropriate time. The board should ask itself, for example, do we need a surgical robot more than a new hybrid operating room?
To answer the second question, consider conducting a technology visioning exercise with senior management and physician leadership to develop possible future clinical technology scenarios for each of your major service lines. The goal is to think together with those inside and outside the organization to create the needed peripheral vision to avoid being blindsided by a real clinical technology revolution just outside your main line of sight.
Bottom line: Past performance is no guarantee of future performance, and clinical technology changes like the weather. Check the forecast frequently.
- Do we have a sustainable financial plan to fund our clinical technology needs for the next five years? Admittedly, this question seems virtually impossible to answer confidently given the reimbursement and reform debates that are raging.
Regardless, it is crucial to review access to capital and operating margins precisely because there is so much variability. Though it may be possible to postulate that providers adopt clinical technology too readily and thus should be able to spend less on it, it seems also true that health care is becoming more technology intensive, not less.
Betting against this trend seems unwise. Consequently, these planning exercises must connect with the financial capacity of the organization to ensure that the technology needs identified can be acted on effectively.
Bottom line: Visioning without some financial understanding results in wishing, and wishes do not make dreams come true. This is health care, not Hollywood.
Are we confident that our clinical technology decision process is evidence-driven, free from bias and in sync with our strategic priorities? Making effective decisions for clinical technology requires a well-reasoned, transparent process based on good data. Although this sounds obvious, it is tough to implement.
To answer the fourth question effectively, the technology decision process should be looked at from a process perspective. Reviewing the process should lead to more direct questions: What data are gathered before an acquisition is made? Do we gather the same data for each decision? Who is required to participate in the decision? Do we ensure looking at more than one supplier? Do we check for conflicts of interest with the decision-makers?
Bottom line: The road to bad technology is paved with good intentions, while the road to good technology is paved with good processes.
Perhaps the notion that medical technology drives up costs could become as quaint as the idea that computers drive up costs. We spend money on computers, but they make us vastly more productive. Somewhere, there's a new lighting technology to lower electricity costs, a new car to lower gas costs and a new scanner to lower health care costs. The first two already exist, so why not the third? Medical technology could be the same. Be a better buyer; change the whole of health care.
Anthony J. Montagnolo, M.S. (firstname.lastname@example.org), is executive vice president and chief operating officer at ECRI Institute, Plymouth Meeting, Pa.