Christopher J. Eagle, MD
Calgary Foothills Hospital and University of Calgary
Objectives:
In this presentation, I will discuss the difficulties of
assessing the actual cost of new technology, the limitations of
Quality Assurance in bringing new technology into practice, and
finally some methods which are useful in arguing with
administrators for new funds. As healthcare budgets decrease,
clinicians will increasingly be aware of the difference between
'best' care and 'affordable' care. We will have to document the
true benefits of new technology and to support those arguments
with financial data.
Anaesthesia is clearly technology oriented. Technology is more
than monitors or equipment; it is an entire process of delivering
care. Technology changes continuously and new technology
generally increases cost and capability simultaneously. An
example may be useful. My hospital introduced a patient
controlled epidural analgesia program (PCEA) for post-thoracotomy
patients two years ago. Introduction of this technology involved
multiple elements. First, education was required for nurses,
patients and physicians. Second, new equipment, pumps and
disposables, were needed. Third, new methods of care were
instituted and eventually lead to production of 'care maps.'
Fourth, new databases of activity and outcome were required.
Finally, additional support for financial control, critical
incident review and pharmacy was required.
What was the cost of this new program? Review of the budgets
of several departments showed that the only identifiable,
incremental cost was for the disposable equipment. The PCEA pumps
were obtained on open ended loan from a supplier. Education, care
delivery, pharmacy costs and outcome assessment were all covered
by diversion of pre-existing funds. To the administrator, it
might appear that this program was created for much less than its
true cost. In large institutions, incremental costs are difficult
to evaluate although the actual cost may appear to be very high.
The incremental cost is obscured by increased or simply altered
productivity.
From this example, it is clear that the incremental cost of
new technology can be difficult to establish. Further,
modifications in technology (in this case PCA to PCEA) are also
hard to assess. Three additional points need to be made. First,
not all costs are anticipated. In this case, additional time and
space was required in the pre-admission clinic for patient
education. Second, all the costs covered by diverted funds
represent a real and significant opportunity cost. When the
nursing staff were developing the care map, were they diverting
time from clinical care, administrative activities or something
else? What was the result of this diversion? Finally, some costs,
such as depreciation, are routinely not included in hospital
financial reports and are not part of the hospital budgeting
mechanism.
In the dilemma between cost and quality is there anything from
Quality Assurance that might be of benefit? Traditional Quality
Assurance, based on the Structure, Process and Outcome model,
provides good information about pre-existing, stable systems.
Deficiencies can be identified and potential solutions developed
and implemented. In dealing with new technology, Quality
Assurance lacks the methodology to deal with costing, choice of
options, or anticipation of additional downstream effects of
technology. In 1996, a series of articles appeared in the New
England Journal of Medicine concerning quality in healthcare.
These are an excellent source of information about the current
status of healthcare and quality. Unfortunately, little of the
information provided helps the clinician in dealing with new
technology.
So far we have seen that the cost-quality dilemma lacks strong argument on either side. Our knowledge of true costs is poor as is the quality assessment of new technology. Given this lack of information, how can clinicians make substantive arguments to administrators in order to gain the technology which appears to offer economical and effective improvements in care? The answer lies in providing information that concerns not only clinical, but also administrative issues.
There are four strategies which will prove effective in a
number of settings.
Strategy One: The Lawyer
The first strategy is legalistic and is dependent on the pronouncement of some higher authority. It is the simplest and most limited. Standards or guidelines from agencies such as the Canadian Anaesthetists' Society, Canadian Standards Association and other professional bodies can provide strong leverage toward the purchase of new equipment. This strategy is particularly effective at time of hospital accreditation. Its major disadvantage is that standards from these groups tend to lag clinical practice.
Strategy Two: The Accountant
The second strategy is based on financial analysis and is most applicable in private sector applications. The key point is to identify some potential savings arising from the use of the new technology. Once the savings have been identified, calculation of the 'net present value' of the savings give a value in today's dollars of the cost of the technology. The major weakness in this approach is the inability to accurately identify sources of savings. In the US, savings in insurance premiums can result from use of specific types of monitoring equipment and may present an attractive financial argument for purchase of new monitoring equipment.
Strategy Three: The Epidemiologist
The third strategy is based on the use of data from epidemiological or healthcare research. An example is provided in Orkin's editorial on pulse oximetry published in Anesthesiology in 1993. In brief, Orkin compared the number of patients needed to be treated with pulse oximetry in order to save a life, versus the number of patients with left main coronary occlusion needed to be treated with surgery in order to save a life. Using data from a pulse oximetry clinical trial, Orkin estimated that approximately 10,000 patients would need to be treated to save a life. Given a few assumptions, one can estimate that an investment of $4,000 in pulse oximetry will save a life. An investment of $120,000 is required to save a life with surgery for left main stenosis. At the level of risk quoted, pulse oximetry would appear to be cost effective. This type of information is best acquired from large epidemiological studies, which are difficult and expensive to perform. Lack of this type of information is the major limitation in its use. As with Strategy One, Strategy Three will tend to lag clinical practice.
Strategy Four: The Administrator
The final strategy is the one used by administrators and is the most broadly based. Factors associated with a new monitor such as cost, depreciation, anticipated life span, effectiveness of therapy, savings regulatory environment, service contracts, co-purchase agreements, bundled purchase agreements are all important. It is obviously based on the other strategies and may be the most effective since it is not dependent on a single source of information.
Conclusion:
The above strategies are arbitrary and based on experience. They are not scientifically formulated. Given the lack of precise information about cost or quality they may be a useful tool for clinicians. Simply put, we lack adequate tools to assess the cost or quality of care impact of new technology in clinical settings.