For medical device makers, the hospital is the place to be.
Their size, number of patients and role in breaking in new medical gear makes hospitals critical to medical device makers. Sure, doctors’ offices and surgery centers are important. But hospitals are the big bang.
And they bring in devices several ways. For some products, they rely on buying groups that supply to hospitals across the country. Some hospitals set up their own panels to review devices. Still others are given cutting-edge devices for research, or raise money to buy a coveted item.
Mission Hospital in Mission Viejo, part of Orange-based St. Joseph Health System, relies on its parent as well as an internal panel for getting devices.
St. Joseph, which has 15 hospitals, supplies a lot to Mission, according to Peter Bastone, chief executive of the Mission Viejo hospital.
“That goes for everything from buying aspirins to buying a CT scanner,” he said. “When we go out and buy a large piece of radiology equipment, there may be four or five hospitals in our health system that are buying the same piece of equipment. So we’re able to go to a GE, Toshiba or a Siemens and say, ‘You know, we’re going to buy four or five from you, what kind of rate can you give us?'”
St. Joseph’s buying covers a lot of devices, including drugs, prosthetics and stents to treat blood vessel disease, Bastone said.
Then Mission has evaluation teams for specific device buys. Bastone said he created the Mission Innovation Institute, “where I have some professionals actually monitor significant changes” in devices, he said.
The hospital also has ties to the University of California, Irvine’s engineering school to keep up on nanotechnology.
Memorial Health Services, a Long Beach chain with four Orange County hospitals,Orange Coast Memorial Medical Center, Anaheim Memorial Medical Center and Saddleback Memorial Medical Center, which also has a San Clemente campus,gets devices several ways, said Ann Symonds, a senior vice president of purchasing.
The company uses buying groups and strikes local deals for devices, she said. Sometimes doctors who practice at Memorial hospitals push to bring in products.
Costs vs. Care
Hospitals and device makers sometimes are at odds over cost, particularly when a device maker gets the product into the hospital through a doctor. In those cases, price can be an afterthought.
“Stockholders (want to) maximize profits, while (we) want to control healthcare costs,” she said.
Doctors at UCI Medical Center, a teaching hospital in Orange, often get devices free for research.
“As the technology becomes developed and it gets whatever governmental approvals are required, we’ve got a good feel for much of that,” said Tim Smith, the hospital’s interim chief operating officer. “It’s just the nature of the university hospital.”
UCI also taps into the University HealthSystems Consortium, a group of some 90 university hospital operators that have a contract for buying some devices and other supplies through Novation, an Irving, Texas-based purchasing group.
“We use Novation, and we use it mostly once we’ve identified what we want,” Smith said. “We use it to get the best purchase price we can, using the buying power of the large group.”
Beside Novation, San Diego-based Premier Inc. and Cardinal Health Inc. of Columbus, Ohio, are other big hospital buying groups.
Mission Hospital uses Cardinal.
UCI Medical Center also has a technology committee to examine device buys, particularly large purchases for the operating room.
“For large purchases, we expect physicians to bring these ideas to a multidisciplinary committee to evaluate that idea,” Smith said.
UCI generally bases device buys on a combination of business and whether the item will provide quality healthcare for patients, Smith said. A device may not earn back a return on investment, though it still could be worth buying for healthcare needs.
When it comes to interacting with local device makers, it depends on what a doctor practices, Smith said.
“For us, some specialties have some real tie-ins locally just based on the nature of the field,” he said.
Eye care is one, he said. OC is a hub of the eye device industry, with companies such as Advanced Medical Optics Inc. of Santa Ana, Alcon Inc., a Nestl & #233; SA unit that employs nearly 500 people in Irvine, and IntraLase Corp., which Advanced Medical is buying in a deal set to close in coming weeks.
