An Industry Example: Medical Device Reprocessing
The unnecessary and rapid launch of “new and improved” products designed to confound commoditization places constant pressure on hospitals to spend money on devices that aren’t any better. To fight back, many have successfully dealt with premium priced new technology adoption by leveraging FDA controlled device reprocessing. By collecting used devices and working with commercial reprocessing companies to refurbish them at about half the cost of new, they achieve a blended device rate that is economically viable…
… Hospital leaders must own the decisions that ultimately determine internal utilization, access and outcomes. They cannot allow them to be driven by OEM sales targets. As a starting point, they should direct their procurement staff to stop buying devices where the value-add is below the value-based reimbursement threshold. Value-based healthcare is transforming the care provider/payer/patient triad, so the idea that the industry’s supply-side has somehow managed a “pass” is unacceptable.
Restrictive innovation is nothing short of a bully strategy against a vulnerable industry and patient populations that deserve better. And when considering that tax expenditures fund nearly two thirds of healthcare costs, the practice should not be tolerated.