A medical device trade group is taking aim at hospital buying groups, charging they don’t live up to why they were created—to save money buying supplies.
Buying groups, or cooperatives that buy medical devices, equipment and everyday supplies for hospitals, didn’t do any better saving money than hospitals could do themselves, according to a study by the Washington, D.C.-based Medical Device Manufacturers Association.
From 2001 to 2010, hospitals could have saved 10% buying supplies on their own instead of going through buying groups, the report contends.
The association argues that the fees some big medical products companies pay to buying groups negate savings for hospitals.
The fees are allowed under a law Congress passed in 1986. The report shows why the law should be repealed, according to the association.
“It is painfully clear that while hospitals and providers are trying to improve care and reduce costs for patients, the supplier-funded (buying group) model is costing the healthcare system billions,” association Chief Executive Mark Leahey said.
A repeal of the law would reduce American healthcare spending by up to $36 billion a year, according to the report.
The association represents more than 250 device makers, many of them smaller companies that have argued buying groups and their biggest suppliers keep the products of smaller device makers out of hospitals.
Members, including Irvine-based Masimo Corp., have been on the frontline of battles against buying groups. Masimo Chief Executive Joe Kiani is a group chairman of Medical Device Manufacturers Association.
In the last decade, Masimo’s attempts to get its pulse oximeters and other devices into hospitals drew the attention of the New York Times and brought rebukes for purchasing groups from lawmakers.
Masimo eventually ended up signing deals with several buying groups.
Not surprisingly, the Health Industry Group Purchasing Association, also based in Washington, D.C., blasted the critical report.
Buying groups save hospitals money, according to studies from the Government Accountability Office and the Federal Trade Commission.
“Because medical device manufacturers did not like what the Government Accountability Office found in its most recent analysis of the group purchasing industry, MDMA has chosen to disregard or manipulate the GAO report for its own purposes,” said Curtis Rooney, president of the group purchasing association, in a release.
“No amount of reckless MDMA propaganda can change the fact that the $200 billion medical device industry and its largest manufacturers are the only parties that stand to benefit from changing a working, competitive GPO market,” Rooney said.
Phase II for Ista’s Bepreve
Irvine-based Ista Pharmaceuticals Inc. said it expects to file a regulatory application and start second-phase clinical studies of its Bepreve drug before year’s end.
The company made its announcement after reporting what it called “positive preliminary results” from a study of Bepreve to treat symptoms associated with the inflammation of nasal passages caused by allergies.
Chief Executive Vince Anido has said that Ista, which has annual revenue of about $110 million, could eventually double its annual sales with Bepreve.
Wireless Healthcare
The Center for Health Care Management and Policy at the University of California, Irvine’s Paul Merage School of Business is set to present “Wireless Health: Transforming Healthcare with Technology” on Dec. 1 at the Beckman Center.
The program is designed to look at the effect of wireless technologies on the healthcare industry.
Conference organizers say that wireless technologies hold the potential to enable the healthcare system to “truly focus” on individual patients, as well as diagnosing and managing health on a remote basis.
UC Irvine professors Paul Feldstein and Vijay Gurbaxani are the moderators.
For more information, call (949) 824-1323. Registration: https://merage.uci.edu/registration.
Bits and Pieces:
In other UC Irvine news, the university recently opened a medical education simulation center. The facility features lifelike mannequins that can be programmed to mimic virtually any medical crisis a patient could experience. Simulation training allows medical students to practice communication during emergencies and correct medical errors prior to treating human patients … Tom Allen is the new chief executive of Aubrey Group, an Irvine engineering, product development and contract manufacturing company that specializes in medical and clinical diagnostic devices. Allen’s background includes a stint at Baxter International Inc. … Peter Bastone, chief executive of Mission Hospital, has been reappointed to the Orange County Board of Supervisors’ Emergency Medical Care Committee. The group provides advice to the supervisors and the Orange County Emergency Medical Services agency.
