With current medical devices and new innovations on the horizon, patients are experiencing highly effective health care outcomes and that’s predicted to only get better. Hospitals are using category strategies to know what’s happening in the industry right now and trying to forecast what new technology is going to be coming out.
“Category management works with business owners,” said Trent Gee, Intermountain Health senior director of category management. “We consider the business owners as being the clinic leads of the various different disciplines we have and also from the business side.”
For example, IT’s the business side, he said. “We work with IT on how we want to approach working with them on some variation that we have within our organization. That can be product equipment or services where we have duplicates that do the same thing and also reduce variation outcomes.”
Gee said they look at all of the products that are used in a procedure to see if they’re overutilizing something or underutilizing something that can help with changing the outcomes for the better. “We work on the contracting side with our suppliers. We look at every single product that is used in a procedure and want to make sure that it is being used appropriately like the supplier heads outlined.”
There are tools that show everything that was used within the procedure, said Gee. “We can look at the cost by the physician and their procedures and determine if there are similarities or differences and if there are any variations that we can go back to the clinical teams and present to see if there’s an opportunity to reduce costs and still have the same outcome or reduce costs and get a better outcome than we’re currently getting by making some adjustments on how we use those products.”
The biggest thing right now in health care is on the AI stream and that’s robotics procedures, he said. “They are designed to do certain procedures. We’ve got clinicians that want to explore using them in procedures that haven’t been approved yet. So what we’re doing is we’re looking at the outcomes we currently get on the procedures that have been approved to see if they are actually reducing the length of stay for the patients. Is the patient having better outcomes? Are they recovering quicker? Are there less infections or complications post-op? Are we really saving money in the long run? Some of these pieces of equipment — robotics — are in the millions of dollars.”
There have been a lot of improvements made in the AI space in health care. “We’re starting to see where the robot is actually guiding a procedure on a person and how instrumental it is for proper training for the physician to have, as well as making sure the staff is trained,” Gee said. “Again, making sure that the right patient can have the procedure done on them. The last thing you want to do is start a robotic procedure and then have something go wrong and have to actually open them up and finish the case, which adds more cost.”
The tariffs have been very challenging, said Gee. “All the suppliers we work with, the total was $700 million in increased cost that they approached us with but we don’t accept those. We work with them and negotiate to determine if these requests are real and valid. We ask them for a point of origin for all their materials so we know what the tariff is. We’ve worked to negotiate just over a $70 million increase instead of $700 million.”
Gee said probably the area they are most concerned about is Trump’s announcement of a 100 percent tariff on all pharmaceuticals made outside of the United States. “Some of those products are the only ones made for a certain disease and you pay what you pay. If that happens, we can see pharmaceutical prices go outrageously higher than they already are.”
A lot of pharmaceuticals are not made in the United States, he said. “The challenge with pharmaceuticals is we can’t buy those directly from the manufacturer like we can other products. The DEA is involved so you can only buy pharmaceuticals from a distributor that’s been approved by the DEA and FDA, which is different from products and equipment where I can go directly and negotiate on a product.”
Since the pandemic, there’s been more change in health care than in the previous 20 years, said Gee. You had a lot of caregivers get out of health care and left a lot of positions to fill. We’re slowly getting those filled back in. I’ve been with Intermountain for 30 years and the last six or seven years have probably had the most changes I’ve seen. It’s been very active and it keeps us on our toes.”
Procedures are constantly changing, he said. “Just in the cardiac world, we’re able to change a heart valve by going through the artery through the groin and doing it more laparoscopically with the scope versus cracking the chest open and having to replace the valve that way.”
So more and more candidates are being able to receive benefits of procedures that are less invasive, Gee said. “You’ll see that happen over time and see more robot procedures being done, whether it’s on the current platform that has been approved for or new procedures over time.”
There are a lot of efficiencies still out there to be looked at, whether it’s from a procedure to technology or just communicating better with the different parts of health care, said Gee. “Whether it’s the insurance provider, the manufacturer or the supply chain, the more we can communicate with the other side or the other team in the process, we’ll all know what’s happening. I think we can make better decisions and actually take more costs out of this fight. More collaboration and more communication can help drive down the cost of health care.”