As hospitals continue to look for ways to respond to pressures to reduce costs, some are looking at ways to more closely align the often-disparate interest of doctors and hospitals. Called gain-haring, hospitals financially reward physicians who work with them to lower costs. Reading between the lines, hospitals would reward physicians who reduce costs using the most cost effective therapy or medical device. This could impact manufacturers of diagnostic equipment, catheters, implantable defibrillators, stents and other devices.
The Office of the Inspector General in the U.S. Department of Health and Human Services has issued six unrelated rulings since January allowing unnamed nonprofit hospitals and their doctors to engage in gain-sharing agreements -- but only for a year.
Four of the agreements cover devices used in cardiac surgery and in catheterization labs, including popular implantable defibrillators, pacemakers, vascular closure devices and heart stents.
The inspector general's advisories were followed by a favorable report on gain-sharing this month by the Medicare Payment Advisory Commission, or MedPAC, which advises Congress on Medicare policy.
Over the years in hospitals I have seen many very expensive pieces of equipment sitting in corners gathering dust. This is a common occurrence that is rarely acknowledged. If gain-sharing is widely adopted, it will likely impact established vendors who have the distribution to push ineffective or inappropriate products into the market. This could also change the "single vendor standardization" vs. "best of breed" dynamic in the market, swinging more business to best of breed solutions.