Deaf and Blind Medical Device Giant J&J: Harmed Patients Demand REAL Consumer Warranties!

How J&J’s Walmart relationship is inspiring its device business

By ARUNDHATI PARMAR  FiDA highlight

 Oct 31, 2016 at 6:02 PM

The Affordable Care Act has laid the groundwork for a seismic shift in the way the medical device industry operates.

Traditionally, large companies like Johnson & Johnson built up an army of sales reps who would have relationships with the same hospital customer but touting the New Jersey’s companies individual products — be it cardio, ortho or general surgery. As value-based care gains a footing, health systems are focusing on how they can lower costs and improve outcomes through services and solutions as opposed to buying more and more hardware and implants that device firms are known for.

J&J’s medical device business has been ill-equipped to adjust to this shift and its financial performance has been poor. Last year it garnered $25.1 billion, down 8.7% from 2014. The division has also restructured and announced it would be eliminating thousands of jobs earlier this year. In a phone interview, Gary Pruden, J&J’s executive vice president and worldwide chairman for medical devices, explained how the unit is undergoing a wholesale metamorphosis to take advantage of the opportunities afforded by value-based care. One inspiration has been to take a page out of the consumer business book and see how it manages a really large customer:Walmart.

Gary Pruden, worldwide chairman,                                               J&J Medical Devices

“I have more than a dozen companies in the U.S. for example and in the past, they would all go to the hospital system provider separately. They all have separate P&Ls, they all operate independently, they all go separately,” Pruden recalled. “We made a conscious decision and actually this year we integrated all the different business into one single P&L and I have one single strategic account management group in the U.S.”

This model is unlike how other large device firms are fulfilling their go-to-market strategy. For them, the product business and solutions business sit separately, Pruden declared referring to the likes of Zimmer Biomet and Stryker.

“They are trying to bring together a compilation of [offerings] and those solutions providers operate separately from those individual businesses,” Pruden claimed. “And when you talk to [hospital] customers, that’s a little challenging. They want to talk to one person.”

At J&J, that single account management group now has the power to speak on behalf of the product and service offerings of J&J Medical Devices with a single voice as well as to strike deals with hospital customers, partner with them and write contracts. The goal is not only to lower their costs but also share in the risk for clinical outcomes, Pruden said. If J&J  is able to achieve both, it wins with greater volume of products sold.

Pruden wouldn’t provide specifics about the value-based care offerings but said that there are certain demonstration projects with certain hospital customers, both U.S and globally. Through them, J&J’s medical device business can offer its expertise in providing end-to-end supply chain solutions for hospitals, perioperative efficiency, clinical standardization programs as well as in help in figuring out bundled payment programs.

In trying to create a model by which the devices team at J&J would be able to provide savings by managing a customer’s supply chain end-to-end, the inspiration came from the conglomerate’s consumer business.

“With Walmart, we have a very unique partnership where we have a large number of people working in Bentonville, on behalf of Walmart that help manage the end-to-end supply chain,” Pruden said.

This model is already being put to use in the U.S., but Pruden declined to identify the customer or customers with whom this program has rolled out. [In May, Pruden’s presentation to analysts showed the Medical Devices business had at least had eight such customers – or strategic partners. They include New England Baptist Hospital, OSF Healthcare, Saint Luke’s Health System, Grupo Angeles Servicios De Salud and Schulthess Klinic among others]

He was similarly elusive when asked about the types of products for which the corporation has taken on some risk. This is in direct contrast to other device companies that are not only providing full-throated support for alternative payment models that mean bearing more risk with hospitals but actually identifying the product at the heart of the matter.

Take Stryker for instance.

Earlier this year, the Kalamazoo, Michigan orthopedic company announced that it is providing no less than a “money-back guarantee” for customers who use its SurgiCount system to keep track of the surgical sponges that in some cases may inadvertently get misplaced, ending up inside surgical patients. Stryke said that it would offer up to $5 million in product liability indemnification to hospitals and an additional guarantee to refund the incremental cost hospitals bear to invest in its SurgiCount program compared with the hospital’s previous sponge spending for up to three years.

Medtronic, the largest pure-play device company, has also gone at-risk with its Tyrx absorbable antibacterial envelope. The mesh device is meant to encapsulate a pacemaker and ICD  and release antimicrobial agents over a period of seven days to prevent surgical site infections of such cardiac devices.

While Pruden didn’t provide any specific example of products that J&J Medical Devices, he was very emphatic about the need for device makers to assume some risk with their products as they become more of a strategic partner to hospitals than a supplier. And that can mean the difference between a supplier relationship always on the verge of being cut and a long-term strategic partner.

“That’s the essence of what I am doing – aggregating our businesses at scale, offering some willingness to take some risk and leveraging the enterprise and some of the things we can do to create some value,” he said. “Partnerships that only go one way don’t last very long.”

http://medcitynews.com/2016/10/jjs-medical-device-chief-taking-inspiration-consumer-business/

CMS Tracks/Publishes Joint Replacement Patient Outcomes!

Medicare identifies 97 best and 95 worsthospitals for hip and knee replacements

December 18, 2013 1:52 am by Jordan Rau | MedCity News

FiDA highlight

Medicare has begun tracking the outcomes of hip and knee replacement surgeries, identifying 95 hospitals where elderly patients were more likely to suffer significant setbacks. The government also named 97 hospitals where patients tended to have the smoothest recoveries.

The analysis, which was released last week, is the latest part of the government’s push to improve quality at the nation’s hospitals instead of simply paying Medicare patients’ bills. Medicare already assesses hospital death rates, how consistently hospitals follow basic medical guidelines and how patients rate their stays.  The evaluation of hip and knee surgery outcomes is significant because for the first time, Medicare is rating hospitals’ performance on two common elective procedures.

Many patients needing joint replacements want to know a hospital’s record when choosing where to have the procedure done.  This is not usually the case for treatment of conditions Medicare has evaluated previously, such as heart attacks.

Of the 95 hospitals where knee and hip surgery patients experienced difficulties after the operation, nine were rated having both high readmissions and high complication rates. Those hospitals were: Froedtert Hospital in Milwaukee; Grant Medical Center in Columbus, Ohio; Mercy St. Anne Hospital in Toledo, Ohio; Northwestern Memorial Hospital in Chicago; the Pennsylvania Hospital of the University of Pennsylvania Health System in Philadelphia; Peterson Regional Medical Center in Kerrville, Texas; Reston Hospital Center in Reston, Va.; Shannon Medical Center in San Angelo, Texas, and Southside Regional Medical Center in Petersburg, Va.

Some of those hospitals complained Monday that Medicare’s assessments were outdated since they covered operations between July 2009 through June 2012. A spokeswoman for Shannon Medical Center said the hospital has improved since then, adding better technology and opening a clinic to follow up with patients seven days after leaving.  A spokeswoman for Southside Regional Medical Center said that hospital adopted a new treatment model in 2012 for joint and spine patients and that their outcomes have “drastically improved.”

Medicare was cautious in how it marked hospitals, only categorizing them as outliers when their records in hip and knee replacements were statistically different from the national average.

The overwhelming majority of hospitals—about 19 out of 20—were branded average, a Kaiser Health News analysis found.

Table

Hospitals Judged Best And Worst For Hip And Knee Readmissions And Complications

Out of the 97 hospitals that did better than average in avoiding either readmissions or complications, 25 were rated as being better at both measures. Those included some big hospitals such as Sutter General Hospital in Sacramento, Calif., and the Hospital for Special Surgery in Manhattan. They also included some local hospitals such Holy Cross Hospital in Fort Lauderdale, and several physician-owned hospitals that specialize in these types of surgeries, such as Arkansas Surgical Hospital in Little Rock.

About 600,000 patients in the traditional Medicare program have their hips or knees replaced each year. The growing popularity of these operations has made them a more significant expense for Medicare and private insurers. In 2010, there were 719,000 knee replacements costing nearly $12 billion and 332,000 hip replacements nearly $8 billion, according to the National Center for Health Statistics.  

Medicare published the new outcomes data on its Hospital Compare website.  While few consumers use that site, this information may reach a greater audience later on through groups and publications, such as Consumer Reports, that tap Medicare’s data in devising their own hospital ratings.

“With elective procedures, consumers like to do a lot of research to pick the right doctor and the right hospital, so this is a good first step,” said Leah Binder, CEO of the Leapfrog Group, a nonprofit funded by employers that judges hospital quality. However, she said the new ratings would be of limited use for most patients because the Centers for Medicare & Medicaid Services judged most hospitals’ performance as normal.

“We know there’s a significant variation among hospitals, but CMS reports them all as average,” Binder said.

Financial Pressure

Hospitals may soon feel a financial pinch from the evaluations. Medicare plans to add hip and knee readmission rates to the criteria it uses when deciding whether to penalize hospitals each year.

Since October, Medicare has been paying less than it normally does to 2,225 hospitals after determining their rates of rebounds for patients with pneumonia, heart attacks and heart failure were too high, even by a small amount.  Starting in the fall of 2014, when the joint replacements are to be factored into the penalty program, hospitals are at risk of losing as much as 3 percent of Medicare payments for each patient stay.

In its new evaluation of hip and knee replacement patients, Medicare used two measures. One was how often the patients ended up being readmitted to the hospital within 30 days of discharge.  The other was how often they suffered one of eight complications after the operation.  Those included a heart attack, pneumonia, sepsis or shock within seven days of admission. They also included bleeding at the site of the surgery, a blood clot in the lung or death within a month of admission. Medicare also counted mechanical complications with implants and infections of the joint or wound within 90 days of admission.

The quality of joint implants has been under scrutiny for several years. Some of the surgical devices have been plagued by quality problems, especially among artificial hips made of interlocking metal parts.  The friction created by these joints can create metal debris that damages the surrounding flesh and bone. Two manufacturers have recalled their devices since 2010.

Problems Are Declining

Nationwide, the number of readmissions following hip and knee replacement surgeries has been dropping, but not as quickly as readmission rates for heart attack, heart failure or pneumonia patients, according to a Medicare-commissioned study by the Yale New Haven Health Services Corporation Center for Outcomes Research and Evaluation.  

Dr. Eric Coleman, an expert on readmissions at the University of Colorado Anschutz Medical Campus, said some hospitals are trying to prevent joint replacement patients from returning by educating them ahead of the surgeries about how to take care of themselves and warning signs of problems. This program provides “a chance to walk you through what to expect, what your family would expect, how to arrange your home,” Coleman said. “In most of the cases of readmission reductions, we’re still very reactive.”

Hospitals’ clientele appears to play some role in how they fared after these surgeries. The outcomes for hip and knee replacements tend to be slightly worse for hospitals that serve a high proportion of Medicaid patients, according to the Yale study. The study also found that hospitals where more than one out of every five patients were African-American tended to have slightly higher complication and readmission rates than did hospitals with no black Medicare patients. However, the report noted, some of these hospitals serving large numbers of Medicaid or black patients also performed very well.

These kind of racial and economic disparities in readmissions have long troubled health policy experts. Some hospitals mostly cater to prosperous patients who have the money, resources and education to get necessary post-surgical care after discharge. But safety net hospitals often have a harder time ensuring that low-income, less educated people follow the often complex instructions about how to recover from a major surgery or hospitalization.

In Medicare’s new analysis, on average, hip and knee patients had a 5.4 percent chance of having to return to the hospital. Nationally, the average complication rate for patients after hip and knee replacement surgery was 3.4 percent. One hospital, Beaumont Health System in Royal Oak, Mich., had a mixed record: Patients there were more likely to be readmitted but less likely to suffer serious complications.

Hospital-Wide Readmissions Published

The government also last week released its first ratings of how often Medicare patients of all diagnoses returned to hospitals within 30 days. That “all cause” measure is more encompassing than Medicare’s appraisals based on heart attack, heart failure and pneumonia.  A number of prominent experts, including Congress’ Medicare Payment Advisory Commission, have been pushing for this measure to be used in setting financial penalties for hospitals.

Medicare’s analysis found that 16 percent of Medicare patients ended up returning to a hospital within 30 days between July 2011 through June 2012. Again rates varied significantly.
At 364 hospitals, or 8 percent, patients were more likely than average to return within a month, the data show. These included the Cleveland Clinic, as well as the clinic’s hospital in Weston, Fla.; both of Johns Hopkins’s hospitals in Baltimore; and New York-Presbyterian Hospital in Manhattan.

Medicare did not count cases where the patient was scheduled to return to the hospital, such as when a lung cancer patient was admitted for pneumonia and later came back for a chemotherapy treatment that had been planned. Medicare calculated that patients were less likely than average to end up back for any reason at 315 hospitals, or 7 percent of the nation’s total.

Nancy Foster, an executive with the American Hospital Association, said that tracking hospital-wide readmissions was of limited value to hospitals that wanted to do better. “Most of the interventions you would use are built and targeted around particular conditions,” she said. “You have to know what’s driving patients back into the hospital to address the problem. When you get this lump of all-cause readmissions, you don’t know what to go after.”

KHN reporters Ankita Rao and Marissa Evans contributed.

jrau@kff.org

Read more: http://medcitynews.com/2013/12/medicare-identifies-97-best-95-worst-hospitals-hip-knee-replacements/#ixzz2nqCPLGSX

Public reporting of CMS patient outcome data from joint replacement surgery has been a 'grown-up Christmas wish' for the last 5 years!  Patient harm from lax oversight of implants has cost us our humanity, needless suffering of patients and their family members, trust in our government and care providers and a substantial chunk of healthcare spending.  Simply compiling the CMS data and making that information available to researchers like Consumers Union Safe Patient Project will clarify the true risks and benefits of implanted medical devices.  The legal system unfairly entitles Pharma and the medical device industry, so preventing harm is essential to patient safety.  My blog/personal story:  http://fida-advocate.blogspot.com

U.S. lags in medical device implant safety.

Europe Ups the Post-Market Ante for New MedicalDevices

January 14, 2013 12:57 pm by Amy Siegel | 0 Comments

It should come as no surprise that the movement toward more rigorous post-market surveillance of medical devices has gone global. While US med-tech titans like Medtronic and J&J have made headlines for selling bad defibrillator leads and faulty hip joints, America certainly doesn’t have the monopoly on device recalls; it was a French company that marketed substandard breast implants used in some half million women worldwide, landing the CEO in jail after a media-stirring manhunt.

Fueled by this highly visible run of device recalls, post-market data demands are increasing for the more risky (Class III and some Class II) new medical technologies in the U.S. as well as in Europe. While Europe may still provide a faster route to regulatory approval for such devices, post-market requirements are creeping in like an expensive final cheese course served by European regulators and health systems just when companies are feeling most broke and tired. So regulatory approvals may come, but actual, meaningful revenues? Not so fast.

To dig deeper on the changing med-tech launch conditions in Europe, S2N talked to Terry McCarthy, Co-Founder and Managing Director of FirstClinTech, a Holland-based company providing a range of services (business development, clinical support, logistics and technical service) aimed at ’easing’ medical device companies into the EU markets. FirstClinTech came to life filling a service void left by a failed ventricular assist device company, so Terry knows a thing or two about the market challenges for novel medical technologies in Europe.

On paper, European-wide efforts to strengthen and harmonize regulation of innovative medical devices are progressing at a leisurely pace, with a target adoption of yet-to-be-clarified regulations by 2019. ’Don’t let that timeline lull you into complacency, though,’ warns Terry, who is already seeing some Notified Bodies stepping up their post-market data requirements ahead of any new regulations being in force. This escalation in post-market requirements has real, quantifiable implications for emerging med-tech companies.

Delayed Commercial Revenues

Terry cites recent examples where Notified Bodies have made CE approval of implantable devices conditional upon satisfactory surveillance data captured for a defined period of time or number of implants. ’We often confront the unrealistic assumption that as soon as you have CE mark you can start selling and generate revenue,’ says Terry. While companies generally understand that significant revenue will be gated by reimbursement, which is in turn gated by efficacy data, heightened post-market regulatory requirements could translate into longer dwell times in ’limited launch’ (a.k.a. paltry revenue) mode than expected. For some product types, companies are often end up giving away lots of devices during this phase, further reducing early market revenues.

Increased Post-Market Expenses

The most obvious cost associated with post-market surveillance is study management; this expense can vary widely depending on the surveillance study size and device complexity. ’You want to do enough science to back up what you said in your dossier,’ advises Terry, ’and also see that the patients enrolled in the post-market study resemble those in the pre-market study.’ For example, a physician might be tempted to try a newly approved device in a ’train wreck’ patient for whom there are no other options, even if this is an off-label application with much lower efficacy prospects. ’Ensuring that appropriate patients are included in the post-market surveillance studies means that companies need to have people on the ground interacting with centers,’ says Terry.

Tougher Sales Channel Decisions

This need for tighter control in the early commercialization phase can also impact the decision of whether and when to go with direct sales representatives or sell through a distributor in Europe. ’A distributor will naturally want to sell as many devices as possible, whereas company management and the Notified Body all want the first tranche of patients to be done in a fairly controlled way,’ cautions Terry. Other post-market obligations, such as device traceability (another recall-inspired global initiative), must also be carefully considered in distributor relationships and contractual arrangements.

Despite heavier post-market burdens, regulatory consistency across Europe will likely benefit emerging med tech companies in the end. ’The current situation is confused,’ says Terry. ’Harmonization should improve transparency and establish a more level playing field for medical device companies.’ A major bridging of regulatory frameworks across the Atlantic, however, is likely a long way off. Terry and others agree that Europe will continue to take a more risk-based, safety-focused approach to device approvals for the foreseeable future. Getting insurance payment for new devices in Europe, or the US, is another matter entirely.

For more predictions and insights about the changing landscape for med tech in Europe, read this excellent article from FirstClinTech.

Read more: http://medcitynews.com/2013/01/europe-ups-the-post-market-ante-for-new-medical-devices/#ixzz2Kh76XYlR