Pandemic sourcing checklist

Ten questions to screen potential healthcare supply sources … and avoid fraudulent brokers

Since COVID-19 invaded the United States, the healthcare supply chain has

faced a dramatic increase in demand for medical supplies.

This situation is ripe for abuse by fraudulent brokers – individuals or businesses armed with little knowledge of the healthcare industry and its stringent quality requirements – who dive into what they see as an opportunity-rich market. The goal of these brokers is to facilitate deals between sellers and buyers in the unofficial “gray market.” Brokers do not take ownership of products. Industry acceptable transportation controls are not guaranteed, increasing the risk for lost or damaged shipments. Brokers are focused on individual transactions, not long-term business relationships with either the buyer or the seller. A brokered transaction is ripe for price-gouging, especially in times of high demand.

The media has reported multiple accounts where during the COVID-19 pandemic, brokers have profiteered from delivering high-priced, substandard or counterfeit medical supplies, or simply disappeared with the money without making a delivery at all.

In contrast, established healthcare distributors typically serve as a single trusted source through which providers buy a full range of medical products critical to everyday operations. They are known to the nation’s hospitals, nursing homes, physician practices, home health organizations, and other healthcare providers.

Vetting a supplier is not a simple process. Even the Federal Emergency Management

Agency’s (FEMA) recent efforts to screen 1,000 new supply offers resulted in only a handful of viable purchases.

So how can you understand the difference between a fraudulent broker and a professional, qualified distributor?

The 10 questions below can help buyers spot warning signs before any payment is made. Reliable distributors will be able to provide rapid and verifiable responses to vetting questions, brokers will not. 1. Are you able to demonstrate proof of product registration with the Food and Drug

Administration (FDA)? 2. How long have you or your source manufactured medical supplies? 3. Can you provide current inventory levels and photographic proof of the current location of the inventory? 4. Can you offer references? 5. Can you provide a sample? 6. Can you provide a copy of your quality manual? 7. Can you provide the company’s

W-9 and/or business license? 8. Can you provide a financial snapshot, including a recent income statement? 9. Can you provide proof of 510(k) clearance? 10. Can you provide product cut sheets?

A request for advance payment should raise a bright red flag. There have been multiple reports in which the broker vanishes after receiving the funds they say are needed for the purchase. Do not be shy about requiring access to the physical items before paying for the shipment. It also will allow you to verify the quality of the supplies.

To meet the increased demand created by COVID-19, distributors have been working diligently to identify new PPE sources. Their goal is, as it always has been, to provide quality medical supplies quickly and efficiently to healthcare providers on the frontlines of this pandemic.

More information on sourcing offers for PPE from unknown sources can be found by visiting the Health Industry Distributors Association’s COVID-19 Resource Center, HIDA.org/coronavirus.

Purchasing departments said “prove it.”

With our Endocuff-assisted colonoscopy device, we took the challenge and we are glad we did

BY BETH WALL, DIRECTOR OF HEALTH ECONOMICS AND REIMBURSEMENT, RN, MS, OLYMPUS

“Prove it.” Hospital purchasing departments have good reason to ask medical

device companies to provide proof that investments into new technologies will make good sense. But what and how should medical device companies be presenting such proof to their potential customers?

At Olympus, we recently had an opportunity to show the economic value of an investment in our ENDOCUFF VISION (Endocuff) technology – and the response from hospitals and other stakeholders has encouraged us to pursue additional economic value research for other products from many of our medical business units.

What we set out to prove We knew from clinical data that our product, the Endocuff, improved adenoma

detection rate (ADR), one of the most important indicators for prevention of interval colorectal cancer (defined as cancer that recurs between colonoscopy screenings).

The Endocuff device attaches to the distal end of a colonoscope, with multiple flexible “arms” that fold within the product during intubation and forward movement and open out when drawn backward, thereby flattening the bowel folds and controlling the field of view. Olympus Endocuff received FDA 510(k) clearance in 2016 for the claim that the device results

in a statistically significant and clinically

relevant improvement in ADR, as com

pared with unassisted colonoscopy, due to

its design, which maximizes visualization

of the mucosa. For each 1% increase in

ADR, there is a 3% reduction in the risk

of interval colorectal cancer (CRC). 1 ADR

is shown through meta-analysis to be 14%

higher with Endocuff-assisted colonos

copy compared to standard colonoscopy

(29.8% vs. 25.8%). 2, 3, 4

But with all its clinical advantages, the Endocuff would still add a cost for each case, one that the healthcare provider or payor would have to absorb.

What our stakeholders needed, from payors to hospital purchasing departments to physicians who wanted to make a case for using Endocuff, is proof of return on investment. We had a strong theory, based on reasonable assumptions, that cost savings and health benefits could be reflected in terms of the patient’s ability to avoid CRC and the associated medical and cancer treatment costs. It was on us to make the case.

First, we engaged a third-party researcher We identified the researchers at Guidehouse, and a team led by Tiffany Yu, whose experience in evidence development across a variety of indications has been shown to inform reimbursement

and adoption discussions for payor and provider decision makers. We were interested in a partner with expertise in health economics and outcomes research (HEOR) and a proven record of rigorous research, as well as presentation experience at professional society conferences.

Second, we educated ourselves on the baseline: particularly WTP

The medical community’s work toward

a “willingness to pay” (WTP) model has

been a useful one. Between NICE, which

is based in the U.K., and the analysis of

health policy experts in the U.S., the thrust

of such analysis has been to review the im

pact of quality adjusted life years (QALY)

of patients with the use of the device.

In the case of Endocuff, facilities

understand that while there could be a

benefit to the device, it is not necessarily

one that is measurable with each indi

vidual patient, as in the cases of patients

with no adenoma detected. Given such

uncertainties, it is necessary to measure

the cost over the entire patient population

and analyze the benefits.

Over time, as reflected in meta-analysis 5 ,

the WTP per QALY threshold in the U.S. is at $50,000.

Third, we used economic modeling to assist in generating findings and the clinical study results were the starting point To hasten patient benefit, it is useful to rely on models. Yu had identified the Markov model, with its origins based in gaming theory, as an ideal tool for this analysis. It is important to note that the model used clinical trial data, based on real world evidence, for its extrapolations. Starting with the multiple clinical studies that had

We were interested in a partner with expertise in health economics and outcomes research (HEOR) and a proven record of rigorous research, as well as presentation experience at professional society conferences.

showed that use of Endocuff during colonoscopy resulted in higher ADR, she could then draw models over time.

This model was developed in compliance and accordance with international guidelines 6, 7, 8 that have been set to gauge

the effectiveness of new innovations applied to healthcare. The model built for this economic study looked at CRC screening, treatment and outcomes for the average screening patient, beginning at age 50 over a lifetime — and compared these to patients screened with Endocuff-assisted colonoscopy.

CRC screening patients were tracked through health states representing screening (no CRC diagnosis), CRC diagnosis, metastasis, remission and death. Probabilities of transitioning between health states were applied annually. Patient outcomes included CRC incidence, CRC-related death, life years and QALY.

Three stakeholder perspectives were evaluated: the device purchaser, the health plan, and the fully integrated accountable care organization (ACO) responsible for both device and medical costs. These perspectives were considered separately and together. Lifetime Endocuff device costs were considered for the device purchaser; and lifetime medical costs were considered for the health plan. The fully integrated ACO was assumed to be responsible for device and medical costs.

To view more on this article visit: www.jhconline.com/olympus-endocuff-vision-technology-proves-its-worth.html

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