The Challenge of Providing Optimal Healthcare at Acceptable Costs


Hospital organizations are always under enormous pressure to deliver quality care on tight finances. Adding further complexity to the decision-making process are the needs and opinions of numerous stakeholders - clinicians, patients, public health authorities, operation management, procurement and financial personnel. When adopting new and innovative technologies, clinical benefits are essential. However, carefully assessing patient outcomes on a wider and longer-term basis, including considerations with regard to reimbursement, is a challenge that falls to hospital organizations. What questions should be asked before making important decisions on the adoption of new and innovative medical technologies? Who should be involved? And how can providers of medical solutions ease the burden?

Ear, Nose, Throat, General Surgery, Gastroenterology, Urology, Gynecology, Pulmonology
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The challenge of providing optimal healthcare at acceptable costs
As healthcare technologies become more innovative and more effective they often become more expensive. Combine this with the effects of an ageing population, increased demand for services, and reduced state funding, and the pressures on healthcare budgets are enormous.

The overarching challenge for the healthcare sector is to try and achieve a balance between optimal care and acceptable costs. With numerous stakeholders such as hospital management, purchasing and procurement, clinicians, patients and even public health, each has its own individual challenges when it comes to balancing the books while providing high quality patient care and supporting improved outcomes. Reimbursement is just one factor in this interplay, and is an important consideration when it comes to adopting new and innovative technologies.

Figure 1. Different stakeholders have different opinions, wants and needs for consideration when it comes to adopting innovative technologies and how these can be reimbursed.

Working together to support improved healthcare outcomes
In every healthcare decision there are often various opinions and views to consider. Introducing new and innovative healthcare technologies, is one such example of a change that involves different stakeholders with varied wants and requirements, both from clinical and non-clinical groups.

Public health organizations are concerned with the health of a population as a whole, while patients, clinicians and hospital management will tend to focus on the benefits that a technology can bring to them individually and the hospital organization. Healthcare management, however, face different challenges as they consider the hospital or clinic in its entirety. Not only do they need to listen to the needs of individual clinicians, often acting in the best interest of their patients, but they must balance this with the overall needs of a healthcare facility as a whole. Budget must be allocated to different departments depending on need and priority, and so spending on a particular new technology, therapy or treatment cannot be thought of in isolation. A large part of the challenge for healthcare directors and management teams comes down to achieving an optimal balance between reaping the benefits that a new technology can bring (both clinically and non-clinically) versus maintaining the current standard of care. For example, what impact will spending a large portion of budget on an innovative paediatric technology have on the available funds for the treatment of the elderly? Or, is it better to prioritize a new treatment for meningitis, when current care options are sufficient, or divert these funds to invest in innovative cancer treatments?

In addition, the sometimes conflicting views of other stakeholders, such as procurement, need to also be considered at the management level. In the case of procurement, cost is key, and so for healthcare managers it can be a challenge to balance conflicting factors and influences while keeping patient care at the heart.

Reimbursement plays a key role at this level to ensure coverage of costs. However, reimbursement policies and processes are complex, with regulations and methods for reimbursement varying in different countries and influenced by different levels of state funding, healthcare centralization and decision-making powers. In fact, reimbursement often poses a barrier to the adoption of new healthcare technologies. As a result of the significant yet vastly complex nature of reimbursement, the healthcare industry is calling out for innovative ways to capture the potential impact of a new technology and combine this with a more fluid, dynamic and simple approach to reimbursement.

Considerations when adopting new and innovative healthcare technologies
When it comes to new technologies, healthcare providers – and in turn patients – are unsurprisingly keen to implement innovative solutions and treatments. There are some key questions that all stakeholders should ask when looking at adopting new solutions that can help with effective procurement, successful technology implementation and ensuring coverage of costs through reimbursement. Working together with medical technology manufacturers can also help simplify the process and therefore help support improved outcomes while still covering costs.

Does the technology meet a previously unmet and relevant clinical need?

When medical solution companies start researching and developing new products, their key aim is to develop a technology that is needed clinically. This very broad criteria could refer to the development of a totally new treatment or diagnostic tool, improvements to an existing technology to improve outcomes or achieve cost-savings that still maintain the standard of care. By the time a product comes to market, its intentions for meeting a previously unmet and relevant need should be clear.

A longer-term perspective should also be considered, taking into account the total value delivered. For example, a new technology may support better access to treatment, increase efficiencies, and result in shorter hospital stays but may also impact on longer-term complication rates, have implications on future interventions, or affect patient outcomes and quality of life.

The PLASMA technology from Olympus represents a good example of a healthcare technology that combines the latest knowledge, experience and innovation to offer improved operational efficiencies as well as patient benefits. Using PLASMA+ for endourology, improvements in clinical outcomes reduce the overall cost of care, while maintaining or even increasing the quality of healthcare services available to the patient.

The recently published guidance and economic analysis from the National Institute for Health and Care Excellence (NICE) supports the case for adopting the PLASMA technology for bipolar transurethral resection (TURP) and hemostasis of the prostate1. Evidence shows that clinical outcomes with the use of PLASMA are comparable with monopolar TURP (mTURP) while serious adverse events are reduced. As a result, the length of hospital stays decreases resulting in considerable costs savings. This technology therefore offers equivalent clinical efficacy with an improved safety profile 2 .

Does the technology work, and is there clinical evidence to support this claim?

The best way to show that a new and innovative technology works is through relevant studies that are carried out in a properly controlled and ideally peer-reviewed manner. A medical solutions company should be able to clearly and unambiguously demonstrate the features and benefits of its new technology to healthcare providers using such studies.

In addition, post-marketing clinical follow up, including surveillance, survey, audit and registry data, plays a part in the reimbursement process, helping to ensure that procedural reimbursement is adopted in association with the value of a particular product. This is key to ensuring coverage of real-world costs.

Looking at the PLASMA technology from Olympus once more, this procedure-oriented, safe and efficient system utilizes underlying high-frequency technology that has been used and proven for years, successfully treating millions of patients. Clinical evidence shows that serious adverse events – including bleeding and TUR syndrome - are reduced or eliminated by using the PLASMA system compared with monopolar TURP (mTURP).

Is the technology affordable?

With healthcare budgets stretched more than ever, the affordability of a technology is important. While a main aim of a medical solutions company is to develop technologies to support better clinical outcomes, demonstrating cost effectiveness across a range of healthcare economies also forms a key part of the early research stages in product development pipelines. Looking ahead to when a product is used, manufacturers also evaluate reimbursement landscapes and different strategies for pricing and reimbursement in advance of technology development to help ensure affordability.

As well as clinical evidence, these economic plans form an important consideration point for management stakeholders, and to some degree, those involved in procurement. For example, economic evidence and cost modelling demonstrates that the initial equipment and higher consumable costs are offset by savings from a reduced average length of hospital stay and fewer complications upon adoption of the PLASMA+ system from Olympus. Cost modelling of eight scenarios estimates a cost saving of at least 24% in all cases (irrespective if Olympus user), with a potential of £847 per patient for existing Olympus users when the procedure is performed as a day case 3 .

How would the technology be introduced and its effectiveness monitored?

Implementing a new technology and monitoring its effectiveness will likely have cost implications of its own. Healthcare managers and medical equipment companies should account for this when evaluating a products’ cost-effectiveness, with any additional costs translating proportionately into improved clinical outcomes.

Figure 2. When bringing a new product to market, medical solutions manufacturers can help all stakeholders by demonstrating the clinical and economic value of their technologies.

Industry-healthcare partnerships can aid technology adoption and reimbursement planning

These questions contribute towards a framework for healthcare managers to help ensure the adoption of new technologies is beneficial at all levels – from patient outcomes to cost coverage. Crucially, effective collaboration between industry partners and healthcare teams can aid in navigating these questions and answers. The involvement of manufacturers, HCPs, insurance providers and policy makers, and healthcare purchasing managers on regional and national levels – from an early stage in the product development pipeline - helps to ensure compelling value propositions and good patient outcomes (Figure 2).


Proof of a new technology’s clinical benefit is critical but offering evidence of the economic value of systems and services beyond clinical outcomes is also important in removing reimbursement barriers to adoption. By continuously and effectively demonstrating the value of their systems and services, medical equipment manufacturers can address the needs of multiple healthcare stakeholders and their individual challenges. Helping secure the best solution for patients and budgets, industry and healthcare stakeholders must work together to help ensure successful patient access and coverage of costs through reimbursement.

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