Optimizing Care: A Focus on Economic Impact
More than ever, the healthcare industry, including the medical device sector, is challenged to consider the economic impact of innovation and new technologies. At Hospi, our products seek not only to improve quality of life, but also to ease provider workflow and reduce cost.
Learn more from Hospi CEO, Igal Ladabaum, about how the company has embraced the economic implications of innovation to develop products that also help to reduce the cost of care. With its primary focus in the hospice and home health settings, Hospi is also developing innovative products to optimize care in other areas.
Interview with our Co-founder and CEO, Igal Ladabaum
What are some of the healthcare industry dynamics that affect Hospi today?
The healthcare industry in the United States is in a period of transformation. The developed world could go bankrupt if it is not able to control healthcare costs, especially given demographic trends. The idea that an incremental patient benefit at additional cost will be embraced by the healthcare system is dead. Significant additional cost will only be borne for breakthrough, evidence-based patient benefit, and in general the most successful initiatives in medical devices will be those that can reduce payer costs in aggregate. Hospi was founded to innovate practical medical devices that enhance patient comfort and wellbeing, ease caregiver burden, and reduce cost, so we think that present healthcare industry dynamics are wind in our sails.
Do you think the current socio-political focus on healthcare costs deters innovation in the medical device industry?
On the contrary, periods of significant change usually foster innovation. It is true that it is now more challenging to pursue capital-intensive medical device projects with uncertain outcomes. However, the pace of innovation is quickening to respond to the need to provide quality healthcare in a manner our society can afford.
Given the aging population and growth in Medicare spending, how might Hospi’s products reduce costs in this segment?
Hospi is inspired by a nursing perspective. It is from this vantage point, at a patient’s bedside, that it becomes clear that enabling a reduction in the acuity of care is often in the best interest of the patient and results in significant cost savings. Specifically in the Medicare segment, reducing hospital admissions and in-patient days of stay is critical. That is why we see a substantial shift of care from in patient hospitals to skilled nursing facilities, home health programs, and hospice agencies. Hospi’s products aim to provide some of the benefits of high acuity care in lower acuity settings, and to reduce healthcare related complications. For example, our first product, the Macy Catheter, allows for effective symptom control medication to be given when a patient is unable to swallow, without the need to resort to an IV, which is costly to administer and can lead to even more expensive complications.
Can you define the economic benefit expected from use of the Macy Catheter™?
The Macy Catheter is particularly relevant for use in hospice care during the last days of life. Near death, all patients lose the ability to swallow, and therefore maintaining adequate symptom control in a low acuity care setting can be very challenging. Even though over 97% of hospice patient days system-wide are routine care days (paid at approximately $160 per day), over 2% are high acuity in-patient or continuous care days (paid at approximately $700 per day, and even at this rate, the high acuity days are provided at a financial loss by the provider). The reason for this high acuity care is symptom management. CMS (i.e. Medicare) could save over $1 billion per year if the high acuity days could turn into routine days. We believe the Macy Catheter, by making the rectal route of administration practical, can be instrumental in achieving such cost reductions.
In the future, how might Hospi and its products help to address some of the economic challenges facing the hospice, home health, skilled nursing, palliative care, and in-patient hospital segments?
All of these segments (with the exception of emerging palliative care models) share a common trait in that the Medicare benefit is a defined, capitated amount. There is no incremental fee for service, so it is the efficient providers who thrive in these segments. But efficiency does not mean, of course, lowering costs by limiting patient care. It means making smart choices that are in the interest of the patient, and in so doing reduce costs. For example, the Macy Catheter makes the rectal route of medication administration practical. The cost of administering IV or subcutaneous medication can be two orders of magnitude higher than rectal administration of medication, and the difference does not even account for the high cost of a complication, such as infection. So, when medically appropriate, the use of the Macy Catheter instead of IV or subcutaneous administration leads to direct economic contribution to the healthcare provider. Other products achieving this goal include our LiquiPill™ system that can increase efficiencies in the care of patients with dysphasia, and an aseptic port for urinary catheters that streamlines irrigation and sampling workflow, and could reduce the incidence of catheter associated urinary tract infections.
How does your vision for Hospi help to minimize the economic burden of providing quality, patient-centric care?
There is a buzzword phrase in the manufacturing world called “cost of quality.” It refers to the concept that there are direct and indirect costs to shipping a defective product out the door (of course unknowingly), which, when properly accounted for, are usually much greater than people intuitively perceive. The same holds in healthcare. If at the patient bedside a nurse can more optimally “put the patient in the best condition,” to paraphrase Florence Nightingale, cost reductions ensue. Quality, patient-centric care simply costs less. For example, if by placing a Macy Catheter, a nurse is able to ensure that the patient will be properly medicated without the need for high acuity care or special return visits, costs are reduced. Hospi is dedicated to innovating these types of practical products that make a difference at the bedside.