Tuesday, May 09, 2006

Could the First Amendment Right Healthcare Costs?

"Pricing confidentiality has long been a standard practice" in the medical device industry, a spokesman for Guidant, now a division of Boston Scientific said. "Through negotiations, we are able to reach mutually beneficial terms best suited to each customer's (a.k.a., hospital system) individual needs and circumstances."

Can anyone find the little guy (the patient) in this negotiation? According to the Wall Street Journal this morning, the Emergency Care Research Instutute (ECRI) , a non-profit publisher, filed a lawsuit against Guidant claiming it has a First Amendment right to publish Guidant prices. ECRI’s legal team is composed of litigators from the Ralph Nader's public interest law firm Public Citizen and from Montgomery, McCracken, Walker & Rhoads, LLP, Philadelphia, PA. You can bet Medtronic, Cordis, St. Jude and others will be watching this one closely. The pressure to become transparent regarding prices in healthcare is finally upon us.

Most hospitals have invested heavily in the cardiovascular services product line - one of its most profitable - and recommendations from MedPac, the advisory board to the Center for Medicare and Medicaid Services (CMS) will include approximately a 7-15% reimbursement cut for implantable defibrillators, and up to 25% reduced reimbursement for cardiac stenting procedures. It is interesting to note that about 400 hospitals had previously shared their prices for these devices with ECRI. So it looks like the hospitals don't want to get stuck holding the bag.

Here's my prediction: If Guidant has to disclose prices (and they will), those prices will be hugely inflated.


1 comment:

Anonymous said...

Further detail is available on ECRI's website (www.ecri.org). There was also an article in the May 9 Philadelphia Inquirer on the topic (http://www.philly.com/mld/philly/business/14532472.htm).