Innovative Health’s recent FDA clearance to reprocess and market the PENTARAY mapping catheter has raised the stakes, technologically and economically for the hospital. At no time in the past has it been possible to reduce EP procedure costs by this much: More than 30% in device cost reduction per procedure, equivalent to thousands of dollars. Instead of supporting this opportunity for EP labs to solve the economic equation, dominant device manufacturers are doubling down on their efforts to limit healthcare cost reduction in order to bolster their profits. Biosense Webster’s division reported growth of 16% in the first half year of 2019, while many EP labs cannot provide curative EP procedures to a growing number of patients, because the economic equation doesn’t allow this. Following the PENTARAY clearance, Biosense Webster’s reps have escalated their bullying* of EP labs to not reprocess the most expensive (sensor-enabled) devices and use SterilMed, their wholly owned subsidiary, for their reprocessing needs; an option that costs EP labs thousands of dollars per case. But don’t take my word for it – here are the bare facts:
- Atrial Fibrillation (AFib) procedures are among the most expensive and fastest growing procedures in the United States. Treatment is expected to double between 2014 and 2024. EP procedures for AFib can cure the condition and serves as an alternative to often debilitating drug treatment. Hospitals offer AFib treatment to patients to the extent that it makes sense economically; they cannot provide procedures that produce an economic loss. Many hospitals in the United States do not offer EP procedures.
- Medical device costs in the most common Atrial Fibrillation procedure (Pulmonary Vein Isolation) is just over $10,000. Medicare reimbursement of this procedure is just over $18,000. So, medical device costs are almost 60% of reimbursement - before paying for nurses, technicians, electricity, depreciation of equipment, etc. By using reprocessed catheters, EP labs can reduce procedure device costs by more than $3,000, or more than 30%.
- Hospitals can only use reprocessed catheters from reprocessors that have received an FDA clearance (a 510(k) clearance) to reprocess the catheter. Per the FDA, “a 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device” (i.e. original manufacturer device). A reprocessor has to exhaustively demonstrate to FDA that after reprocessing, the catheter functions the same way. FDA would never clear a reprocessed device unless it is safe and unless specifications are the same as those of new devices.
FDA would never clear a reprocessed device unless it is safe and unless specifications are the same as those of new devices...No data has ever been published to demonstrate that reprocessed devices are different from or less safe than new devices.
- There is no reason for a clinician, an EP lab or a hospital to doubt the safety or functionality of reprocessed devices. No data has ever been published to demonstrate that reprocessed devices are different from or less safe than new devices.
- In the EP lab, Biosense Webster mapping technicians are supporting EP procedures with support of mapping technology. These mapping technicians are compensated in part through commission on devices sold to the hospital. In cases where reprocessed catheters are used, Biosense Webster STILL has substantial revenue from devices that cannot be reprocessed. For example, an ablation catheter alone costs $3,500+, while the combined reduced revenue from reprocessing all possible devices in the procedure is a lot less than this.
- In spite of this, Biosense Webster says their technicians will not support cases where reprocessed catheters (other than from SterilMed) are used. Specifically, Biosense Webster is saying that their technicians cannot know the specifications of reprocessed devices, and therefore cannot provide the support. An FDA clearance is only achieved when the reprocessor can demonstrate that the device is substantially equivalent, meaning the specifications are the same.
- Biosense Webster limitation to use of reprocessed devices is only about advanced, sensor-enabled catheters. This means they don’t interfere in the savings of $50 on $100 catheters. And it means that specifically diagnostic ultrasound catheters and mapping catheters are targeted. These (only these two catheters) have combined costs of more than $4,000 per procedure and potential savings of $2,000+ per procedure.
- EP labs that move from a restricted EP reprocessing program, saving $100,000 per year, adding diagnostic ultrasound catheters and mapping catheters usually means quadrupling their savings. That means going from $100,000 in savings to $400,000 in savings.
EP labs that move from a restricted EP reprocessing program, saving $100,000 per year, adding diagnostic ultrasound catheters and mapping catheters usually means quadrupling their savings.
- Over the last 2 years, Biosense Webster has replaced the LASSO mapping catheter with the PENTARAY catheter. Just over the past year, utilization of the LASSO catheter has gone from 30%+ to around 17% - the rest is PENTARAY utilization. When PENTARAY was introduced, not only did the price on the mapping catheter increase by around $500 (Biosense Webster routinely increase device prices by 10% or more per year, more so for new technologies), but until Innovative Health’s FDA clearance, EP labs went from saving 600$ on a $1,200 device to saving nothing on a $1,700 device. That’s a difference of $1,100 per procedure.
- Biosense Webster representatives are distributing letters that threaten to take away mapping support from EP procedures if reprocessed devices are used – except when they are from SterilMed, Biosense Webster’s own reprocessing division. Turning to SterilMed for reprocessing means
- Reduced savings, due to the fact that SterilMed does not offer to reprocess Biosense Webster’s own PENTARAY catheter: With SterilMed, EP labs will pay $1,700-$2,000 for their mapping catheters. With Innovative Health, EP labs will pay less than $1,200 for their mapping catheters. That is increased costs of $500 or more per procedure.
- EP labs that change from using reprocessed LASSOs to a SterilMed PENTARAY program loses savings of $500 per procedure PLUS the cost of changing to a more expensive catheter: A reprocessed Lasso costs around $650. A SterilMed program means mapping catheters are $1,700-$2,000. That is a difference of far more than $1,000.
- Reprocessing SoundStar, Biosense Webster’s diagnostic ultrasound catheter and Biosense Webster’s mapping catheter ALONE – only those two catheters – reduces medical device costs per case by $2,000 per procedure. There is nothing from a regulatory, patient safety or reasonable revenue perspective that would justify Biosense Webster’s resistance to allow hospitals to achieve these savings
- While some EP labs around the country are realizing 30% savings from reprocessing, the vast majority of labs are reluctant to use reprocessed ultrasound and mapping catheters, due to the efforts of Biosense Webster. The concerns driving this is NOT about patient safety or procedure efficacy, but about profit maximization.
- Labs reprocessing expensive catheters and optimizing their EP reprocessing program are well-functioning, advanced labs that combine an economic and a clinical perspective on AFib procedures.
*Bullying, definition by Merriam-Webster: Abuse and mistreatment of someone vulnerable by someone stronger, more powerful.
Check out our July Newsletter here and recently published stories in Healthcare Purchasing News here and here.