Working Together to Turn Research Into Action

Working Together to Turn Research into ActionThe Integrated Healthcare Association (IHA), an Oakland-based nonprofit committed to improving the efficiency and quality of health care in California, is a key partner working with the new Berkeley Center for Health Technology (BCHT).


BCHT’s research—which draws upon real world data and can be used to influence decisions made by corporate, policy, and professional leaders—is a natural fit with IHA’s action-oriented, change-implementing activities. BHCT’s offices will be housed adjacent to IHA’s in downtown Oakland to facilitate cooperation between the two organizations.

One of IHA’s programs, Value Assessment and Purchasing of Medical Devices, presents a particularly promising opportunity for collaboration. The program will gather and analyze data on 14 high-volume and high-cost procedures performed in California hospitals each year and will include a series of roundtables addressing best purchasing practices. IHA is also piloting a “episode-of-care” payment method for these complex procedures, offering a single bundled payment for the physicians’ services, the hospital’s costs, the cost of the medical devices themselves, and the cost of rehabilitation care received by the patient after discharge from the hospital.

Already known for its work on physician pay-for-performance, IHA was looking for a project that would engage California hospitals, explains Tom Williams, IHA’s executive director (and a current doctoral candidate at the School). “By addressing the increasing financial burden placed upon hospitals by the dramatic uptake of wonderful but expensive new medical devices,” he says, “we get at a problem the hospitals care about deeply, and one that also affects health care affordability for everyone.”

“The project targets procedures involving what are called ‘physician preference items’— artificial knees, hips, spinal, and cardiac implants,” explains program director Weslie Kary, MPP, MPH ’06. “For each of these procedures, the device represents a very significant portion of the total cost of the procedure. Somewhere between 30 and 80 percent of the reimbursement that the hospital receives from the insurer for everything that happened to the patient can be consumed by the device cost.”

Because these devices are chosen by the physicians, it is especially challenging for hospitals to manage spending in this area. “The hospitals are placed between a rock and a hard place when reimbursement is fixed, as it is for a Medicare patient,” Kary says. “With commercial payers, hospitals are often successful in carving device cost out of their negotiated rates.
That’s why this topic also resonates with health plans—since their costs go up directly with device price increases. 

“It has been difficult for hospitals to obtain really reliable benchmark information so that they can compare how they are doing,” adds Kary. “They need help to build a comprehensive, external view of what is going on with implant costs.”

The program is the collective brainchild of hospital representatives on the IHA board of directors and James C. Robinson, PhD, MPH ’81, BCHT’s executive director and a long-time IHA board member. It is funded by a grant from the Blue Shield of California Foundation. BCHT will be involved with both the data analysis and best practice identification phases of the program, complementing IHA’s applied work. The center will have the academic wherewithal to understand the economic forces driving the market, and to identify and publish on best practices to address those forces in a constructive way.

“IHA brings the stakeholders to the table to talk about shared problems, understand best practices, try out new ideas—but we’re not in a position to conduct real-time rigorous academic analysis of what is going on,” says Kary. “That’s why BCHT’s work will be a very valuable adjunct to the project.” end of line

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